Australia’s property boom making the nation poorer

[themickey]

Retail

Philip Lowe has suggested Australians need to ‘economise’ on housing given the rental crisis. Photograph: Mike Bowers/The Guardian
OpinionRenting

Philip Lowe wants us in share houses to fix the rental crisis. We can’t accept this as normal
Maiy Azize
https://www.theguardian.com/comment...e-rental-crisis-we-cant-accept-this-as-normal

With young people staying at home longer than ever, it’s no surprise the Reserve Bank governor’s comments went down like a lead balloon

In the middle of Australia’s worst ever housing crisis, more pain is in store for renters. The Reserve Bank governor, Philip Lowe, says rents will keep going up, coming off the back of years of huge increases.

If you’re worried you won’t be able to keep up with more rent surges, Lowe has some advice. Young people should live with their parents for longer. Working people should keep share housing. Professionals shouldn’t expect to live on their own.

If you need proof of Australia’s warped housing system, look no further than these comments. I wasn’t surprised they went down like a lead balloon with young people. They are already living at home for longer than any previous generation. Working people are share housing for decades, not years. People on low incomes are stuck in overcrowded homes with no stability.

Stories like these are climbing the age and income ladder. A recent Everybody’s Home report shows essential workers with full-time jobs can’t afford to rent a unit on their own without getting into severe rental stress. Teachers, nurses, and other essential workers we looked at would have to spend around two-thirds of their income just to make the rent on a typical unit. Every region in the country is affected, with the average worker being left with as little as $20 a day for food, bills, and transport.

If these workers are doing it tough on full-time wages, spare a thought for those in casual jobs or who are out of work altogether. They can get stuck in a limbo that becomes permanent, couch surfing with friends and family for years at a time.

When I did the interview rounds to promote our research, I got two kinds of reactions. Most journalists, readers, and talkback listeners were appalled by what we found. Many had their own stories of rental stress, telling me they were putting off having children because they couldn’t afford it, or that they weren’t asking for home repairs because they couldn’t get their landlord offside.

Others reacted the same way as Lowe. Why do these people need their own unit? Shouldn’t they keep share housing until they can afford to move out? Surely some have partners who can help them make the rent?

What they don’t understand is that workers are already staying in boarding homes and share houses into their 40s. Women in industries such as aged care and childcare are relying on their partners to get by. People are making tough choices to keep a roof over their head.

It is a farce that we accept any of this as normal. Instead of stopping people from hoarding houses and profiting from the rental crisis, those in power are gaslighting the system’s losers for daring to want a decent home.

There is nothing radical about a teacher or a firefighter wanting to rent a unit. There is nothing radical about women in caring industries wanting financial independence. There is nothing radical about businesses wanting to hire staff without having to house them – something that more businesses are being forced to do as rents soar and governments sit on their hands.

The truth is that governments have outsourced their responsibility to tackle the housing crisis to the rest of us. If we’re fighting among ourselves about when a hospitality worker should expect to move out of their parents’ home or how a delivery driver should budget to survive on $20 a day, we aren’t looking at the huge shortfall in social housing. We aren’t thinking about the billions in taxpayer handouts for investors. We aren’t focusing on how much more could be done to fix it.

People shouldn’t have to abandon their expectation of a decent home. It should be the government’s responsibility to make sure we have the decent, affordable homes that Australians need. It’s time to shake off our rock-bottom expectations and demand the homes we deserve.

Maiy Azize is the spokesperson for Everybody’s Home, a national campaign representing housing, homelessness and welfare organisations, and a former Greens adviser. She is also the deputy director of Anglicare Australia

 

[themickey]

The next housing nonsense we'll get from government will be the build to rent fiasco.
Multinational / foreign / Chinese companies building and owning multi story 1,2 & 3 bedroom units to house the Australian slaves.

No backyards, just cramped multi story slums.
What that will do is constrain housing development further whereby owning a house and backyard will become a luxury which means even higher prices.

Never mind that Australia has more spare land than you can poke a stick at, no, government idiots here will drive their population into slums slavery and call it "a good solution".

I seriously wonder if the Australian politicians are in the pockets of Chinese CCP with their behaviour and that's where they get their instructions from.

 

[themickey]

.....The truth is that governments have outsourced their responsibility to tackle the housing crisis to the rest of us. If we’re fighting among ourselves about when a hospitality worker should expect to move out of their parents’ home or how a delivery driver should budget to survive on $20 a day, we aren’t looking at the huge shortfall in social housing. We aren’t thinking about the billions in taxpayer handouts for investors. We aren’t focusing on how much more could be done to fix it.
People shouldn’t have to abandon their expectation of a decent home. It should be the government’s responsibility to make sure we have the decent, affordable homes that Australians need. It’s time to shake off our rock-bottom expectations and demand the homes we deserve.

The government have fucked up big time but are ducking and weaving, they refuse to accept responsibilty.

If politicians were employees in a large company, they would have been sacked long ago and told not to come back due to their continual incompetence and apparent corruption.

 

[themickey]

Big four hiring ex-MPs, department heads a ‘conflict-of-interest risk’
Samantha Hutchinson National reporter Jun 1, 2023
https://www.afr.com/policy/tax-and-...s-a-conflict-of-interest-risk-20230519-p5d9qi

The practice of major consultancies, including embattled big four firm PwC, hiring former MPs and top ranking public servants to their senior ranks has been singled out by integrity groups and unions as a major conflict-of-interest risk.

As the PwC tax leaks scandal sends shockwaves around the accounting firm’s global partnership, governance and integrity groups and unions are calling for tougher post-separation exclusion periods to stop MPs and department heads from taking jobs in the firms they handed work to.

Former PwC managing partner Tom Seymour. Michael Quelch

Attorney-General Mark Dreyfus on Thursday morning said the firm must be “fully accountable” for its “deeply troubling” conduct, while former prime minister Malcolm Turnbull warned PwC faces “existential consequences” over the leaks. Mr Turnbull also said he was “absolutely” unaware of the tax leaks scandal when he led the Coalition government five years ago.

Health Department secretary Brendan Murphy told a senate hearing later in the morning that the firm would not get any new work until the investigation is resolved, but said existing contracts with the firm would be allowed to continue.

The comments follow Reserve Bank governor Philip Lowe expressing similar sentiments and criticism of the firm by Prime Minister Anthony Albanese and Treasurer Jim Chalmers.

As scrutiny of the firm grows, governance experts have taken aim at what is a widespread practice throughout the accounting industry of hiring ex-MPs and senior department staff.

The practice assists the firm in growing its pipeline of government work but also presents risks to the government and taxpayer by entrenching a department’s reliance on external consultants, as well as raising potential confidentiality issues.

“There are risks around this really sensitive knowledge that moves into the private sector and what is effectively a very unaccountable organisational arrangement in terms of a partnership,” University of Sydney finance and accounting professor Jane Andrew told The Australian Financial Review.

Integrity expert and former counsel assisting the NSW corruption watchdog, Geoffrey Watson, SC, explained why former top government executives were so valuable to so-called big four accounting firms.

“The consultancies know these [former executives] are very experienced and skilful and that they are very valuable to government, which makes them immediately attractive to the firm which can charge them back to government,” barrister Mr Watson said.

“That helps the firms win more work. They’ve also got the connections and can open all sorts of doors ... think about it, they’re walking straight back into their friends’ and former colleagues’ offices.”

The Centre for Public Integrity has called for an end to what it describes as the “revolving door” of government staff and MPs into consultancies, and is pushing for tougher post-separation employment provisions as well as the publication of ministerial diaries.

The Victorian public sector union has called for a three-year moratorium to be imposed on former top ranking public servants taking roles with consultancies they contracted work to during their time in the public sector.

While former MPs are slapped with an 18-month ban on lobbying in a sector which they had contact with in their former portfolio, no such exclusions exist for public servants.

Labor senator Deborah O’Neill – who is spearheading a probe on the flow of government information through consultancies after the PwC tax leaks issue – is open to the concept of stronger exclusion periods, both for MPs and public servants.

“It’s an idea that is worth consideration,” she said. “I am sure that better protection of Australia’s confidential information is on everyone’s radar.”

The most recent audit results published by the Australian Public Service on hiring practices showed the Commonwealth paid $21 billion for external labour – such as consultants and contractors – in 2021-2022, and the cost is rising.

As government and parliamentary post-employment benefits have dwindled over time, more senior public sector executives and MPs have moved into the private sector.

There is no suggestion that these individuals have engaged in the kind of conduct that was raised by the recent PwC scandal; rather that they are part of the “revolving door” of former politicians and public sector executives moving into the private sector.

PwC’s top ranks include NSW’s former top-ranked public servant, Tim Reardon, as well as the state’s former police commissioner, Mick Fuller, and former federal cities minister Jamie Briggs.

Former Victorian department head Simon Phemister was just appointed partner in its Melbourne office, where he joined his former departmental secretary Alex Kamenev, who worked under Mr Phemister in three former departments. Former Australian Signals Directorate executive Jane Quodling became a partner in 2022.

Former Australian Federal Police commissioner Andrew Colvin is now a partner at Deloitte, while rival consultancy KPMG counts former politicos on staff including Anna Bligh’s former chief adviser and NBN executive Mike Kaiser and former Gillard and Rudd government trade minister Craig Emerson.

EY includes former NSW transport secretary Rod Staples as a partner and at one point counted former federal defence minister Christopher Pyne as a consultant in its defence practice.

EY government practice partner Tony Canavan served as co-ordinator general in Victoria’s Department of Premier and Cabinet under the Brumby government. He works alongside Dean Yates who is a former Victorian transport department secretary and special adviser on infrastructure to the Department of Premier and Cabinet.

With Tom McIlroy, Lois Maskiell

 

[semperfrosty]

"Australia’s property boom making the nation poorer"

Two years now this thread has been running and this housing mess started long before this thread.
In that time, what has the Australian government done?

Nothing! Zilch. Zero. Haven't lifted a finger!
They're either blind, stupid, corrupt, incompetent, in bed with the rich, or they are ok with rising prices as it increases their tax take and has other benefits and never mind the business conflict.

Everything the government attempted at this point in time has only worsened the issue.

I see it everywhere now,an ever widening gap between rich and poor.

Bernard Arnault,taking number one place in Forbes speaks volumes.

This at a time when people were/are at the very brink.

To address your statement more directly though,I think that theyre enjoying the boom as much as the rest of us.They will show their 'compassion' via programs for the 'less fortunate' and again the gap increases.

Off topic,perhaps real democracy needs to be governed by the highly educated but paid at a nations median wage? That would really separate those with a calling from those there to exploit! haha

 

[themickey]

https://www.abc.net.au/news/2023-06...-gathering-pace-proptrack-corelogic/102415292

Rosemary paid $35k for a modest Sydney home. When it went to auction 45 years later, she thought she 'was going to faint'

National property price rebound gathering pace despite interest rate rises, with Sydney leading the recovery
By business reporter Stephanie Chalmers and Rhiana Whitson
Posted Wed 31 May 2023

Sydney has led the housing market recovery, with prices up 3 per cent from their November low, according to PropTrack.(Four Corners)

The house price recovery gathered pace in May, with Sydney continuing to lead a broad recovery, as the number of properties listed for sale fell further.

Key points:

• CoreLogic's national Home Value Index rose by 1.2 per cent in May
• Around 1,800 fewer homes were listed for sale in capital cities than at the end of April
• Data from PropTrack also shows prices rising at their fastest quarterly pace since early 2022

The latest CoreLogic national Home Value Index rose by 1.2 per cent last month, its third straight monthly rise.

Sydney prices were up 1.8 per cent in the month, the biggest gain since September 2021, and up 4.8 per cent from January's low — the equivalent of a near-$50,000 increase in the median dwelling value.

Brisbane and Perth posted the next largest gains, up 1.4 per cent and 1.3 per cent respectively, while all other capital cities also experienced accelerated growth in the month.

"There are several main factors driving this — we think it is largely the demand from returning overseas migration … met with that higher demand, we've not seen very high volumes of supply," CoreLogic's head of Australian research Eliza Owen told The Business.

"In fact, inventory levels are still well below where they would usually be this time of year.

"There are also other factors at play such as a really tight rental market, this might be prompting some renters to instead buy if they can afford it, as well as investors potentially looking back to the market as rental income and yields rise as well."

Supply is certainly tight, with the number of homes advertised for sale falling further in May, with fresh listings 13.1 per cent below the five-year average.

CoreLogic said there were around 1,800 fewer homes listed in capital cities than at the end of April.

Appearing before Senate Estimates on Thursday Reserve Bank governor Philip Lowe said housing supply was one of the biggest challenges facing the country.

"Population growth is strong and housing stress is real. We need to address this; it's been an issue for a long time," Mr Lowe said.

Regional prices rising but not as fast as capitals
Regional home values increased, but at a more modest pace — up by half a per cent in May.

"Although regional home values are trending higher, the rate of gain hasn't kept pace with the capitals," CoreLogic's research director Tim Lawless said.

"Over the past three months, growth in the combined capitals index was more than triple the pace of growth seen across the combined regionals."

Data from the PropTrack monitoring service, owned by REA Group, similarly showed a strengthening recovery.

PropTrack's monthly house price index rose 0.3 per cent in May, leaving house prices more than 1 per cent higher in the past three months — the fastest quarterly price growth since the March quarter 2022.

"The decision by the Reserve Bank to lift the cash rate in May has not deterred the current home price rebound," report author Eleanor Creagh wrote.

"The rise in prices seen so far this year gathered pace in May, broadening and accelerating across markets."

According to the PropTrack report, auction activity has improved and clearance rates remain "firm".

"Although they are at or close to peak levels, interest rates may still rise further and the economy is also expected to slow — these factors may weigh on home prices in the months ahead, " Ms Creagh noted.

"However, the continued tightness in the labour market, stronger housing demand and the limited supply environment are likely to support an ongoing recovery."

Premium housing leading the rebound
In Sydney, CoreLogic data shows it's the most expensive houses, in the top quarter of the market, seeing the fastest recovery.

Values in the upper quartile have increased 5.6 per cent in the past three months, compared to 2.6 per cent across the more affordable segments of the market.

"Buyers targeting the premium sector of the market are still buying at well below peak prices," Mr Lawless said.

Despite the rebound, prices in Sydney's upper quartile remain nearly 12 per cent below their January 2022 peak — or more than $200,000 lower.

More broadly, capital city values remain well below their recent peaks, with Perth the only city where dwelling values have returned to record highs.

Highs and lows as property market heats up

Rosemary Walker says she "never in a million years" expected to sell her two-bedroom home in inner-city Sydney for almost $2.5 million.(ABC News: Dan Irvine )

Just before sunset in the nation's biggest property market, would-be buyers gathered.
After a slow start, a two-bedroom home in Sydney's inner-eastern suburbs went under the hammer for almost $2.5 million.

The owner, Rosemary Walker, was thrilled — she bought it for $35,600 in1978.

"I really thought I was going to faint, but fortunately I did have my medicine … my bubbles," joked Ms Walker, referring to her celebratory glass of sparkling wine.

The 85-year-old has decided to sell up and enjoy a quieter life in regional New South Wales.

"I've lived in this house for 45 years and it is a big wrench leaving it behind," she said.

"And it's been a wonderful [home] because of its location and neighbourhood. It has suited me very well.

But the dreaded date of birth has come into play, and I can no longer handle a house on my own."

Did she ever expect to fetch such a price?

"Never in a million years, no," she laughed.

Sydney's housing market has continued to gather momentum as supply remains limited.(ABC News: Daniel Irvine )

Real estate agent Mark Daley said the market was strong because of low supply.

"The stock is so tight that [when] anything comes up, and if it is a good property in a good area like this is, it just goes incredibly well," Mr Daley said.

In Adelaide, investors are swooping in, and it is taking an emotional toll on buyers looking for a home.

A female bidder became visibly upset when it was clear she was going to be outbid for a home.

The deceased estate eventually went for $785,000 to an investor on the phone from New York.

"She plans to do a full renovation, so she'll gut it, renovate it and then rent it out," her cousin said.

Real estate agents say Adelaide simply does not have enough homes to meet the demand for them.(ABC News: Viki Ntafillis)

Real estate agent Hamish Mill said his main buyers were people coming from overseas.

Mr Mill said there simply were not enough houses to meet the demand.

"The downturn is over, the market is going up," Mr Mill said.

"75,000 people are going to come into Adelaide over the next two years. That's 30,000 houses. There are not many at the moment."

 

[themickey]

....In Adelaide, investors are swooping in, and it is taking an emotional toll on buyers looking for a home.
A female bidder became visibly upset when it was clear she was going to be outbid for a home.
The deceased estate eventually went for $785,000 to an investor on the phone from New York.
"She plans to do a full renovation, so she'll gut it, renovate it and then rent it out," her cousin said...

Oh, the government can't see a problem with that....?

.....Appearing before Senate Estimates on Thursday Reserve Bank governor Philip Lowe said housing supply was one of the biggest challenges facing the country.
"Population growth is strong and housing stress is real. We need to address this; it's been an issue for a long time," Mr Lowe said.

No, the issue is you Australian idiots who sit on your hands year on year out, talking and squabbling and doing nothing other than getting paid to state the obvious several years too late.

 

[themickey]

For housing to be affordable, prices must go down, not up. Here’s how it could happen
Matt Grudnoff
https://www.theguardian.com/comment...must-go-down-not-up-heres-how-it-could-happen

Labor’s housing policies risk being as ineffectual as the Coalition’s. The real solutions aren’t complicated – but they need political will

In 2003, the former PM John Howard said “I don’t get people stopping me in the street and saying, ‘John you’re outrageous, under your government the value of my house has increased’.”

But here’s an economic reality that no Australian politician wants to admit: for housing to be affordable, house prices need to go down, not up.

Fast forward to the 2023 budget and a growing number of voters don’t or will never own a home – and for them rising prices and rents are the problem.

Home ownership rates are falling. Interest repayments are rising. More people are being priced out of even renting. We hear of people living in cars, caravans and tents. So with the budget imminent, many are wondering: what is the government planning to do about the housing crisis?

We regularly hear announcements of policies that claim to make housing more affordable, particularly around budget time and elections. So why aren’t they working?

It’s because housing policy has for years been more about appearing to do anything rather than actually doing something; any policy that would make housing more affordable means either decreasing property prices or stopping them from growing for an extended period of time. In Australian politics, that’s the equivalent of shooting Bambi.

Instead, the political response has been to create policies that won’t make any real difference, but that politicians can refer to whenever a distressed constituent asks what they are doing.

We had former treasurer Joe Hockey’s advice to first home buyers to “get a good job that pays good money” and we ended before the 2022 election with Scott Morrison announcing that the Coalition would allow first-home buyers to access their super to buy a house – a policy that would simply drive up house prices. No wonder people under 40 have deserted them.

But after the heckling Anthony Albanese got in Hobart after announcing $240m for a stadium rather than more money for housing, it’s possible economic reality is overtaking political talking points. There is real danger for Labor that their current crop of housing policies are as ineffective as their predecessors.

So, what can be done that will actually fix the problem? The economic policy solutions are not complicated, but they do take political will.

Stop incentivising investors
The federal government needs to stop incentivising cashed-up investors with tax breaks to outbid first home buyers and push up house prices, by limiting negative gearing to new housing and getting rid of the capital gains tax discount.

Tax concessions for people with houses, to help them outbid people without houses, is exacerbating the crisis. Homes should be about shelter and security – not about tax-effective ways to build investor’s wealth......

 

[themickey]

Imagine the following scenario:
You are a manager of a company - ie an employed manager, not the owner.
Imagine every time you and other cohorts within the business had problems due largely to your collective incompetence and negligence, you then personally profited from it.

If blind Freddy can see the issues and you're not rectifying the situation, it's obvious there is a conflict of interest.

If you're enriched personally due to deliberate business inefficiencies, the obvious human nature reaction would be secret satisfaction and a hope for continuation of the status quo.

That's the situation we have with politics and the Reserve Bank and housing.
The fat cat employed managers who with their bulging superannuation funds and private family trusts and ownership of several houses may outwardly display concern in front of media cameras, but they're certainly not incentivized to do anything about it.

Should the economy seriously have shit hit the fan, these guys will simply retire, put their feet up and say "It's not my problem anymore, you look after it".

 

[semperfrosty]

Imagine the following scenario:
You are a manager of a company - ie an employed manager, not the owner.
Imagine every time you and other cohorts within the business had problems due largely to your collective incompetence and negligence, you then personally profited from it.

If blind Freddy can see the issues and you're not rectifying the situation, it's obvious there is a conflict of interest.

If you're enriched personally due to deliberate business inefficiencies, the obvious human nature reaction would be secret satisfaction and a hope for continuation of the status quo.

That's the situation we have with politics and the Reserve Bank and housing.
The fat cat employed managers who with their bulging superannuation funds and private family trusts and ownership of several houses may outwardly display concern in front of media cameras, but they're certainly not incentivized to do anything about it.

Should the economy seriously have shit hit the fan, these guys will simply retire, put their feet up and say "It's not my problem anymore, you look after it".

I'm not fully understanding your stance Mick.

I get that its mainly a dig at Government mismanagement but are you sayin that you'd happily be worse off if it meant a fairer playing field for all?

No judgement from me if thats the case,just trying to get where youre coming from.