Australia’s housing "affordability" crisis.
Australia's home ownership rate has barely changed over the past 50 years.
So where’s all this housing affordability crisis talk coming from?
From "Money Markets" Newsletter:
"From the government-homeowner tag team, of course. Landowners are calling all the shots. And they have their government foot soldiers supporting them every step of the way. Together, they keep the affordability crisis in the spotlight for their mutual benefit.
Before you dismiss this as quackery, we direct your attention to a recent ANU poll. The survey looked at the changing attitudes Australians have towards housing. One question in particular piqued our interest.
‘Are you concerned or not concerned about being able to afford to buy housing during your lifetime [among non-homeowners only]?’
36% of respondents were very concerned. 31.8% were somewhat concerned. 14.3% were not very concerned. And 14% were not concerned at all. Which means, of the 30% of Aussie households renting, two in three are concerned about affordability.
All told, it tells us that 22% of Australians worry about housing affordability.
Does that suggest a crisis? We can’t say for sure. But we know it doesn’t justify the amount of airtime this issue gets in the mainstream. Not unless the real beneficiaries of the public spotlight are in fact homeowners."
How Melbourne homeowners will shortly benefit from the "affordability crisis"
The Victorian Government has attempted to help first home buyers enter the market, but introducing new schemes to provide deposits (no interest, no repayment s required) increased first home owner grants, and scrapping all stamp duty among other measures.
While well meaning, these measure are likely to have consequences.
For whatever else it does, homeowner grants, help with deposits and no stamp duty does ONE THING: It raises demand in the market. The quicker buyers can save up for a deposit, the faster they’ll enter the market. That in turn supports property prices. And protects the nearly 70% of Australians who ALREADY own their own home.
Make no mistake: the Government won’t touch housing affordability, because doing so would put pressure on home values. Don’t expect that to change.
Again from "Money Markets" Newsletter: "It (the Government)may harp on about housing affordability in public. But it’s doing little to suppress price growth.
That’s why our advice to those looking to the government for a quick-fix is to stop barking up the wrong tree. In fact, stop expecting the government to fix anything.
Because the ratio of property prices to household income is going up, not down. Those concerned about affordability want to see their wages catch up to prices. Yet with wages growing at record lows, that can only happen as a result of falling property prices. For this to happen, demand would have to taper off. And we’ve seen already that the government isn’t ever going to allow that. Not when the landowning majority is calling all the shots.
Never lose sight of the big picture. It’s in the interest of both homeowners and the government for housing to remain expensive and unaffordable."