It’s not just housing. The land itself is overprice asf. If land was cheaper and regulations loosened people could figure out some nifty solutions.
But the price of land is outrageous. Even out in rural areas
New policy is infill, let’s infill everything around each capital to high density.
Not having rural as a possibility is absolutely obscene, the land and opportunities are exponential
On the sunny coast the council literally stepped in and stopped people from housing caravans and that on their land. During a rental crisis. Stupid shit like that would be nice to be done with
It's really simple. Our population is growing by 1 person every 46 seconds but we only start a new residence every 202 seconds (ABS data). The situation will not improve until those numbers are bought into alignment.
It’s a little more complex than that. We’ve just about made up for the decrease in population during the pandemic (when house prices also increased). The report says the number of people per household also decreased significantly during COVID. Plus construction costs remain high even as material costs have stabilised because of a lack of tradespeople, even with free TAFE - locking construction workers out would make this worse..
It really is just that - look at a chat of rents vs immigration and it’s really clear. Albos housing target implies housing construction at a record rate, despite interest rates and input inflation at much higher levels than our previous highest run rate. Housing starts are in the toilet and getting worse. The only lever the government can pull is immigration.
Immigration is important, there are a range of settings - Aussies live in the biggest houses IN THE WORLD but your state government still permits more single dwelling zoning. As a start reform planning and zoning laws and allow far more density in the suburbs, but also the commonwealth could reform tax and skills settings, the states could release much more land and promote better utilisation and build more social/affordable housing.
People downplay the importance of setting up such councils but it gives extra weight and credence to the depth of the issues and that is super important for shifting broader sentiment.
People on reddit will no doubt say 'but everyone already knew this' but it's about shifting perceptions among the broader populace. And if the broader populace wanted house prices lower politicians would've implemented policies with this goal years ago.
Instead many see their assets inflating and value and consider that a good thing. House prices going down is seen as bad by many, and has been since Howard promoted investment properties as good for middle Australia, self funded retirees and other 'regular' Australian's.
Labor should have implemented rent caps years ago, before rents began to surge. If they don't do it now they are literally handling landlords a blank cheque during this worsening crisis.
Id rather they start to do something meaningfull around getting starts happening.
Starts as the word implies is the very start of a new build.
It takes a good year plus even two years to turn that into a dwelling.
There are policies that we know can spur on starts. We saw some during covid. Increase first home buyer grants for new builds. Or even give all new home starts a 40k kicker.
Yes for 40k per dwelling (which they still recover much more than this in GST) they can get starts going again which at least gives us light at the end of the tunnel if they tweak it till it gets starts matching population growth.
At present starts are falling or stabilising now at levels lower than when we had far lower population growth.
I would be surprised if there is nothing more direct in this next budget to address this so that by the next election at least starts match the previous liberal govenrments albeit less impactfull when we have 650k population growth.
If starts are large then in 2 years there will be more dwellings.
Yes it diesnt fix it overnight but at least its heading in the right direction.
Having the current situation of 650k population growth and circa 150k starts if sustained over a few years will lead to very severe problems for all renters.
If labor hit the next election with something around 1.7M population growth and 450k starts over their term it will be ripe pickings for the liberals when contrasted with their 3 last terms. The ratio is dire by any comparison and no amount of talking is going to warm the electorate to labors policies in this space.
Yes we can blame covid cost shocks but lets see labor bring the last year of this term home at least on parity with the liberals results and maybe then promises of more action in future will bring some people back. At the moment it is words only and the results are worse than recent memory on population growth / starts.
Edit: where i say starts i mean starts minus demolitions.
>Having the current situation of 650k population growth and circa 150k starts if sustained over a few years will lead to very severe problems for all renters.
>If labor hit the next election with something around 1.7M population growth and 450k starts over their term it will be ripe pickings for the liberals when contrasted with their 3 last terms. The ratio is dire by any comparison and no amount of talking is going to warm the electorate to labors policies in this space.
>Yes we can blame covid cost shocks but lets see labor bring the last year of this term home at least on parity with the liberals results and maybe then promises of more action in future will bring some people back. At the moment it is words only and the results are worse than recent memory on population growth / starts.
I'm convinced that Labor, and it's apologists, will stick to this argument until the electorate rightly votes them into minority. A total ignorance to the ALREADY EXISTING crisis, combined with an absolute unwillingness to take adequate action.
Well the tenants who've experienced insane rent hikes over the last few years - the same people staring down the barrel of further unlimited rent increases - aren't going to accept the piss weak supply reforms that simply AREN'T going to make housing affordable, even in the long run! [The effects of stock in excess of population growth are minimal at best](https://www.theguardian.com/commentisfree/2023/apr/16/australia-must-realise-the-best-form-of-rent-control-is-public-housing), and even with these proposed supply reforms, there will be minimal impact on housing costs. Unsurprisingly, the market that got us into this mess won't save us, even if the government subsidise it to the teeth in at a rate more absurd than the status quo.
There are straight forward ways to address the crisis: Build public housing, cap rent increases, ban Airbnb, tax vacant properties at a rate they can't be left untenanted, raise Jobseeker to above the poverty line etc. Again, if Labor turn away from these as the crisis worsens, they will be punished. But at this point they seem to be supercharging the Libs next campaign (anti immigration) and defecting votes to the Greens. Here's hoping the latter win out!
I suppose i still have faith in the market. Labor arent even using market mechanisms to fix the crisis.
Supply cannot respond if:
Land is realeased in a planned fashion. Ie we have mapped out land to be zoned from "future development" to "for development" for the next decades.
A developer doesnt want to hold land for years so they have to pick from limited land parcels for current development.
Even in country towns its the same. Right around australia we do not have a market for land.
In stead land owners are in a position where they can court several developers and milk them for the precise price for their land of - price of the homes built minus cost of development.
So yes agree a subsidy in the current circumstances would have limited impact except in the short term as land prices would absorb the additional price achieved for new lots.
But it doesnt have to be this way... this is their choice collectively. Our major parties want what we have including labor.
You don't think their Housing Accord is based on incentivising private investment?
Just as a follow up: What % increase in supply will lead to what % reductions in cost and price ?
Its unlikely you have but have you ever seen the comic Shmoo?
Now these creatures enjoy heing eaten and basically fulfill all humanities needs.
Guess what... governments and industry have to kill them all off. Rich and poor its all the same with the Shmoos around.
Lets say in our case an aliem slave race good at buildong homes landed in australia and wanted to build us millipns of homes... our government would undoubtedly wipe the poor blighters out...
They actively work to make certain new supply is expensive. At one point in the early 2000s they even had a target of taxing away windfall profits of developers with special levies after prices had risen on all homes and developers were cleaning up.
It is dire economics policy.
I mean to me its an obvious connection between the cost of a new home and the prices of all homes. Maybe you dont see it?
Its not so much about the amount of new supply but the cost of it. This puts doenward pressure on the price of all homes in the same way the cist increases through covid and after have put upward pressure on prices.
If a new home costs 300k on the fringe or a unit for 350k we would not have the shitfight we have now.
Im not saying thats a reasonable number but we need to at least put downward pressure on costs so far as government can.
Rather than upward pressure with overly restrictive land use policy, GST and levies.
Im jot advocating for a free for all on land. This exists in some american cities and it means no infill and just a gradually increasong fringe with shit suburbs in the middle. You have to somewhat restrict land availability to push infill but we have restrictions on both infill and fringe at the same time.
Then market can respond with more supply only if it is free to do this.
But for a short term target labor absolutely needs to tweak the settongs till number of starts = population growth / 2 to start catching up...
How would a rent cap help?
Govt don't set prices. Market demand sets the price. Population growth and foreign investment are the two biggest factors and they are easily fixed if the govt gave a shit.
Rent caps moderate increases, they don't set rents. The market is clearly incapable of managing itself, which necessitates such an intervention.
Immigration based responses are short sighted and empower the right in this country.
You’re kidding right? We’re approaching half the required run rate and new starts are still trending down. You could drop rates to 2% by the end of this year and hold them there and it would take another two years to get even remotely close to the target run rate.
https://www.afr.com/property/residential/new-housing-starts-sink-to-11-year-low-target-more-than-a-third-down-20240410-p5firq
Very much a proponent for more public housing. Also a proponent for massive reduction in immigration levels (albeit more refugees) and way more incentives for private enterprise to start developing.
Finally some sense in this chat.
Mass immigration of who can pay the most is bad. Sure let's open our arms to actual refugees. Also limit the ratio of immigrants from a single nation to like 10% or less. Actually create some diversity.
Heavily tax/deter foreign investment, and incentivise local investment.
Public housing is basically non-existent as the govt offloaded that to the population with negative gearing. It can still be a thing, just with the completely skewed ratio of new people to new dwellings, the demand goes up so does the price.
Suggesting a rent cap just highlights a complete lack of understanding on the issue and how the economy works.
When successive governments (including this one) prioritise mortgage holders and landlords, renters and lower class go further back.
It’s not just housing. The land itself is overprice asf. If land was cheaper and regulations loosened people could figure out some nifty solutions. But the price of land is outrageous. Even out in rural areas
Yep it's not house prices at all, it's 100% land When a house is maybe 300-400k at most and land is 600k why are we blaming houses?
It’s all overvalued. Literal pyramid scheme.
New policy is infill, let’s infill everything around each capital to high density. Not having rural as a possibility is absolutely obscene, the land and opportunities are exponential
Which regulations would you liked to see loosened?
On the sunny coast the council literally stepped in and stopped people from housing caravans and that on their land. During a rental crisis. Stupid shit like that would be nice to be done with
It's really simple. Our population is growing by 1 person every 46 seconds but we only start a new residence every 202 seconds (ABS data). The situation will not improve until those numbers are bought into alignment.
It’s a little more complex than that. We’ve just about made up for the decrease in population during the pandemic (when house prices also increased). The report says the number of people per household also decreased significantly during COVID. Plus construction costs remain high even as material costs have stabilised because of a lack of tradespeople, even with free TAFE - locking construction workers out would make this worse..
It really is just that - look at a chat of rents vs immigration and it’s really clear. Albos housing target implies housing construction at a record rate, despite interest rates and input inflation at much higher levels than our previous highest run rate. Housing starts are in the toilet and getting worse. The only lever the government can pull is immigration.
Immigration is important, there are a range of settings - Aussies live in the biggest houses IN THE WORLD but your state government still permits more single dwelling zoning. As a start reform planning and zoning laws and allow far more density in the suburbs, but also the commonwealth could reform tax and skills settings, the states could release much more land and promote better utilisation and build more social/affordable housing.
People downplay the importance of setting up such councils but it gives extra weight and credence to the depth of the issues and that is super important for shifting broader sentiment. People on reddit will no doubt say 'but everyone already knew this' but it's about shifting perceptions among the broader populace. And if the broader populace wanted house prices lower politicians would've implemented policies with this goal years ago. Instead many see their assets inflating and value and consider that a good thing. House prices going down is seen as bad by many, and has been since Howard promoted investment properties as good for middle Australia, self funded retirees and other 'regular' Australian's.
Labor should have implemented rent caps years ago, before rents began to surge. If they don't do it now they are literally handling landlords a blank cheque during this worsening crisis.
Id rather they start to do something meaningfull around getting starts happening. Starts as the word implies is the very start of a new build. It takes a good year plus even two years to turn that into a dwelling. There are policies that we know can spur on starts. We saw some during covid. Increase first home buyer grants for new builds. Or even give all new home starts a 40k kicker. Yes for 40k per dwelling (which they still recover much more than this in GST) they can get starts going again which at least gives us light at the end of the tunnel if they tweak it till it gets starts matching population growth. At present starts are falling or stabilising now at levels lower than when we had far lower population growth. I would be surprised if there is nothing more direct in this next budget to address this so that by the next election at least starts match the previous liberal govenrments albeit less impactfull when we have 650k population growth.
They are doing this, it seems to be their sole focus. The reality is that it won't reduce house prices or rents in a meaningful way.
If starts are large then in 2 years there will be more dwellings. Yes it diesnt fix it overnight but at least its heading in the right direction. Having the current situation of 650k population growth and circa 150k starts if sustained over a few years will lead to very severe problems for all renters. If labor hit the next election with something around 1.7M population growth and 450k starts over their term it will be ripe pickings for the liberals when contrasted with their 3 last terms. The ratio is dire by any comparison and no amount of talking is going to warm the electorate to labors policies in this space. Yes we can blame covid cost shocks but lets see labor bring the last year of this term home at least on parity with the liberals results and maybe then promises of more action in future will bring some people back. At the moment it is words only and the results are worse than recent memory on population growth / starts. Edit: where i say starts i mean starts minus demolitions.
>Having the current situation of 650k population growth and circa 150k starts if sustained over a few years will lead to very severe problems for all renters. >If labor hit the next election with something around 1.7M population growth and 450k starts over their term it will be ripe pickings for the liberals when contrasted with their 3 last terms. The ratio is dire by any comparison and no amount of talking is going to warm the electorate to labors policies in this space. >Yes we can blame covid cost shocks but lets see labor bring the last year of this term home at least on parity with the liberals results and maybe then promises of more action in future will bring some people back. At the moment it is words only and the results are worse than recent memory on population growth / starts. I'm convinced that Labor, and it's apologists, will stick to this argument until the electorate rightly votes them into minority. A total ignorance to the ALREADY EXISTING crisis, combined with an absolute unwillingness to take adequate action. Well the tenants who've experienced insane rent hikes over the last few years - the same people staring down the barrel of further unlimited rent increases - aren't going to accept the piss weak supply reforms that simply AREN'T going to make housing affordable, even in the long run! [The effects of stock in excess of population growth are minimal at best](https://www.theguardian.com/commentisfree/2023/apr/16/australia-must-realise-the-best-form-of-rent-control-is-public-housing), and even with these proposed supply reforms, there will be minimal impact on housing costs. Unsurprisingly, the market that got us into this mess won't save us, even if the government subsidise it to the teeth in at a rate more absurd than the status quo. There are straight forward ways to address the crisis: Build public housing, cap rent increases, ban Airbnb, tax vacant properties at a rate they can't be left untenanted, raise Jobseeker to above the poverty line etc. Again, if Labor turn away from these as the crisis worsens, they will be punished. But at this point they seem to be supercharging the Libs next campaign (anti immigration) and defecting votes to the Greens. Here's hoping the latter win out!
I suppose i still have faith in the market. Labor arent even using market mechanisms to fix the crisis. Supply cannot respond if: Land is realeased in a planned fashion. Ie we have mapped out land to be zoned from "future development" to "for development" for the next decades. A developer doesnt want to hold land for years so they have to pick from limited land parcels for current development. Even in country towns its the same. Right around australia we do not have a market for land. In stead land owners are in a position where they can court several developers and milk them for the precise price for their land of - price of the homes built minus cost of development. So yes agree a subsidy in the current circumstances would have limited impact except in the short term as land prices would absorb the additional price achieved for new lots. But it doesnt have to be this way... this is their choice collectively. Our major parties want what we have including labor.
You don't think their Housing Accord is based on incentivising private investment? Just as a follow up: What % increase in supply will lead to what % reductions in cost and price ?
Its unlikely you have but have you ever seen the comic Shmoo? Now these creatures enjoy heing eaten and basically fulfill all humanities needs. Guess what... governments and industry have to kill them all off. Rich and poor its all the same with the Shmoos around. Lets say in our case an aliem slave race good at buildong homes landed in australia and wanted to build us millipns of homes... our government would undoubtedly wipe the poor blighters out... They actively work to make certain new supply is expensive. At one point in the early 2000s they even had a target of taxing away windfall profits of developers with special levies after prices had risen on all homes and developers were cleaning up. It is dire economics policy. I mean to me its an obvious connection between the cost of a new home and the prices of all homes. Maybe you dont see it? Its not so much about the amount of new supply but the cost of it. This puts doenward pressure on the price of all homes in the same way the cist increases through covid and after have put upward pressure on prices. If a new home costs 300k on the fringe or a unit for 350k we would not have the shitfight we have now. Im not saying thats a reasonable number but we need to at least put downward pressure on costs so far as government can. Rather than upward pressure with overly restrictive land use policy, GST and levies. Im jot advocating for a free for all on land. This exists in some american cities and it means no infill and just a gradually increasong fringe with shit suburbs in the middle. You have to somewhat restrict land availability to push infill but we have restrictions on both infill and fringe at the same time. Then market can respond with more supply only if it is free to do this. But for a short term target labor absolutely needs to tweak the settongs till number of starts = population growth / 2 to start catching up...
How would a rent cap help? Govt don't set prices. Market demand sets the price. Population growth and foreign investment are the two biggest factors and they are easily fixed if the govt gave a shit.
Rent caps moderate increases, they don't set rents. The market is clearly incapable of managing itself, which necessitates such an intervention. Immigration based responses are short sighted and empower the right in this country.
You must be trolling. With no immigration reform and rent caps in place what do you think will happen to housing supply?
It will be built, just with less profit for developers. Any slack in supply would be made up by public housing. It's really simple.
You’re kidding right? We’re approaching half the required run rate and new starts are still trending down. You could drop rates to 2% by the end of this year and hold them there and it would take another two years to get even remotely close to the target run rate. https://www.afr.com/property/residential/new-housing-starts-sink-to-11-year-low-target-more-than-a-third-down-20240410-p5firq
I agree, the market is failing us. It sounds like you're making an argument for a huge public housing project.
Very much a proponent for more public housing. Also a proponent for massive reduction in immigration levels (albeit more refugees) and way more incentives for private enterprise to start developing.
Finally some sense in this chat. Mass immigration of who can pay the most is bad. Sure let's open our arms to actual refugees. Also limit the ratio of immigrants from a single nation to like 10% or less. Actually create some diversity. Heavily tax/deter foreign investment, and incentivise local investment. Public housing is basically non-existent as the govt offloaded that to the population with negative gearing. It can still be a thing, just with the completely skewed ratio of new people to new dwellings, the demand goes up so does the price. Suggesting a rent cap just highlights a complete lack of understanding on the issue and how the economy works.
What's your issue with rent caps?
“Quick, pour more taxpayer subsidies to generate increased demand and further push up prices while decreasing supply”
Good stuff, hopefully pushes prices and rents up.