Australia’s property boom making the nation poorer

[themickey]

National cabinet sets new housing target and touts 'better deal for renters'
Posted 1 hour ago

National cabinet announces plans to boost housing.

The prime minister has touted a "better deal for renters" and a blueprint to boost housing supply following a meeting with state and territory leaders in Brisbane this afternoon.

National cabinet set a new target to build 1.2 million new homes over five years from July next year. The new target is an additional 200,000 homes above the National Housing Accord target agreed by states and territories last year.

"All governments recognise the best way to ensure that more Australians have a safe and affordable place to call home is to boost housing supply," Prime Minister Anthony Albanese said in a press conference.

Housing was the number one priority on the agenda for the prime minister and the premiers, amid rising rents and a shortage of housing during a cost-of-living crisis.

Mr Albanese said the jurisdictions would move towards national consistency on banning no-cause evictions, limiting rent increases to once per year, and phasing in minimal rental standards.

Those measures are already in place across much of the country, but in Western Australia, for example, rent can be increased every six months.

"We're not in a position to flick the switch and just change eight pieces of legislation across states and territories immediately," Mr Albanese said.

Mr Albanese said the rental measures would "make a tangible impact for the almost one-third of Australians who rent", but they are unlikely to appease the Greens, who were pushing the government to go further.

 

[VicBee]

‘Waterfall effect’: Recession looms as more businesses face collapse

By Sarah Danckert August 16, 2023
https://www.smh.com.au/business/the...businesses-face-collapse-20230816-p5dwvi.html

Australia is expected to tip into a recession in the next 12 months, driving up the rate of insolvencies in businesses as they struggle to cope with increasing costs.

Up to 70 per cent of insolvency practitioners, lawyers, managers and corporate debt restructuring specialists believe there will be a recession over the next 12 months. As many as 90 per cent of the insolvency sector experts surveyed believe the economy will tip into a recession in the next two years.

Higher rent, power costs and other inflationary concerns could send more businesses to the wall in the next 12 months.Credit: Ben Symons

The figures come from an annual survey conducted by KordaMentha and Turnaround Management Association (TMA) of 115 professionals linked to the restructuring sector. The survey also found that sentiment about the economy was now worse than it had been for the five years it has been running.

The TMA covers the advisory groups that usually work on larger corporate collapses and the law firms and debt market professionals that assist them.

Increased interest rates and ongoing concerns about costs – such as building materials, rents, transport and power costs – are driving the dour outlook for the economy, according to the survey.

Another concern is the increased enforcement activity of the Australian Taxation Office, which provided a two-year grace period to businesses that had failed to pay their taxes during the COVID pandemic.

Corporate insolvencies jumped 62 per cent in the year to June to the highest level since 2018-2019. According to figures released by the corporate watchdog, 7943 companies appointed administrators, liquidators or receivers in 2022-2023.

There are also growing signs that company directors, particularly small business leaders, are going broke. A separate report from the Australian Financial Security Authority found that personal bankruptcies had dramatically increased in May, jumping to 1031 from 769 the month prior.

“The [Australian Tax Office] have been proactively reducing their arrears for some time now, and we expect this trend to continue and the ATO to be more proactive in the market,” said Sebastian Hams, a restructuring partner at KordaMentha.

Part of the change in outlook has been caused by increased interest rates, the survey found, but there is also the overhang of COVID where many businesses received support from the government and the ATO amnesty. As a result, turnaround specialists surveyed believe many businesses are not prepared for such a severe economic downturn.

‘Construction was the first industry to be affected, unable to pass on rising costs due to fixed-price contracts. We are now seeing other industries affected [...] It’s trickling through the economy.’

KordaMentha’s James Wagg
“During and post COVID we had supply chain issues, which affected costs for manufacturing,” said James Wagg, KordaMentha executive director of performance improvement.

“Now rising interest rates and inflation with resulting cost increases are causing a drop in discretionary spending and profitability. So many borrowers have been forced to the secondary, more expensive money market,” Wagg said.

Against this backdrop, relatively healthy businesses are shrinking their business or winding back their growth aspirations. Several thousand staff have already lost their jobs in Australia’s nascent start-up scene following a series of collapses of the profitless, growth-driven businesses including food-focused delivery services Milkrun (since resurrected by Woolworths) and Providoor.
Those collapses followed a run of corporate failures in the economically battered building sector, hitting companies including Porter Davis, Mahercorp and Toplace.

Wagg said the tightening of the economic outlook was causing a waterfall effect for businesses.

“Construction was the first industry to be affected, unable to pass on rising costs due to fixed-price contracts. We are now seeing other industries affected, like retail impacted by increased cost of living and reduced consumer spending.

“The next are likely to be services industries such as health as government funding fails to keep up with increasing costs. It’s trickling through the economy.”

Recession will certainly end inflation... Everything is too expensive in Australia. I was in Melbourne and Sydney a few months back and you can see luxury everywhere, comparable to driving around the hills of the Silicon Valley (for Melbourne) where properties ooze money. Sydney's coastal properties have always been expensive but there's always someone with more money willing to buy.

As I've said before, the government should be run like in Singapore, where key sectors of the economy are government owned but privately managed companies which profits go to the national retirement fund and rainy day savings. Australians are sitting on piles of mineral resources that should belong to all Australians, not just the shareholders and executives.

 

[themickey]

The prime minister has touted a "better deal for renters" and a blueprint to boost housing supply following a meeting with state and territory leaders in Brisbane this afternoon.
National cabinet set a new target to build 1.2 million new homes over five years from July next year.

More political nonsense and smoke screens.

Build as many houses as you like, it doesn't solve the underlying problem, that investors will outbid genuine homeowners, hence it doesn't halt price increases.
It also doesn't fix the problem, renters and other taxpayers subsidise the rich investors who game the system conveniently structured this way by the government, by having taxpayers pay their expenses and depreciation, also it reduces how much tax investors need pay on their income.
Housing is one of the best ways investors reap a dividend from other taxpayers.

 

[themickey]

As I've said before, the government should be run like in Singapore,

100% correct.
Singapore have a long term, well thought out and fair housing plan now decades old.
Way too difficult for dumb Australian politicians to comprehend.

What Australian politicians are best at, fighting, squabbling, point scoring, vote stacking, pork barrelling, lining their pockets and anything else other than getting the job done.

 

[themickey]

Real estate agents, second-hand shop staff don cameras as cost of living tension rises
ABC Tropical North / By Lillian Watkins Posted 11 hours ago
https://www.abc.net.au/news/2023-08...-cameras-as-rental-crisis-continues/102717398

Some workers only switch their cameras on if a situation appears to be growing heated.(ABC Tropical North: Lillian Watkins)

Real estate agents are resorting to wearing cameras at house inspections as the rental shortage leads to more conflict between agents and members of the public.

Key points:

• A Queensland government agency says there are statewide reports of real estate agents wearing cameras, but the practice is not yet common
• The issue of hostility towards workers is not limited to the property sector — a tip shop in Mackay has also issued body-worn cameras
• A human behaviour expert says it is natural for people under pressure to express anger

Queensland property office manager and sales agent Adele Crocker decided to fit her staff with the cameras after one of her agents was locked inside a house by a tenant during a routine inspection last year.

"Since then we've seen several altercations with tenants," she said.

Ms Crocker said she had noticed an increase in agitation as rental property availability declined.

She felt overwhelmed looking at the thousand properties she was expected to rent out when she began her career in real estate eight years ago.

Ms Crocker says the rental board in the Mackay agency where she works now has barely 100 properties available.

Adele Crocker says it is distressing not to be able to help people desperately looking for a place to live.(ABC Tropical North: Lillian Watkins)

Mackay's rental vacancy rate in June was 0.8 per cent, according to the latest Real Estate Institute of Queensland residential vacancy report, and most regional centres reported extremely tight markets.

"For us, not to be able to help [people to find a place to live] is obviously very heartbreaking," Ms Crocker said.

"But it's a true testament as to what's actually going on with the housing crisis.

"It is making people frustrated and angry.

"It does take its toll on the staff and it's awful to think that we're being abused for just doing our job."

The cameras have helped reduce instances of abuse, but Ms Crocker says the presence of the devices can trigger some people.(ABC Tropical North: Lillian Watkins)

Privacy and protection
Residential Tenancies Authority principal project officer Sam Galer said real estate agents wearing cameras had been reported around Queensland, but was not yet common.

He said the legislation governing rentals did not prohibit the use of cameras but advised real estate agents to provide written notice to tenants and to gain consent.

Criminal lawyer Bill Potts said taking video footage was a balance of a tenant's right to privacy and an agent's right to protect themselves.

"If a picture is worth 1,000 words, a video recording may well be worth an entire civil case," he said.

"Under the Privacy Act in Queensland, ordinary citizens, the police – literally anybody – can wear a body worn camera in a public place where there is no expectation of privacy."

Mr Potts said consent was not needed to film in public, but that changed if a person was recorded in an area where there was an "expectation of privacy", such as a bedroom, bathroom and, in some circumstances, a home.

But he said real estate agents could switch on body-worn cameras if it appeared a tenant was becoming violent.


YouTube Sheila Madsen says staff have been verbally abused at the tip shop where she works.
Tip shop abuse 'full on'
Cost of living tensions have also flowed into the second-hand goods market, leading to sales assistants at Mackay's tip shop being issued body-worn cameras.

"We haven't had anyone physically hurt, thank God," sales assistant Sheila Madsen said.

"[It is mostly people] yelling and screaming profanities while they're walking down the driveway.

"It gets a bit full on.

"The amount of abuse … you wouldn't expect it, but I think it's everywhere these days."

Cameras have helped to reduce conflict at Mackay's Incredable Tip Shop, Ms Madsen says.(Supplied: Mackay Incredable Tip Shop)

Ms Madsen, who has worked at the tip shop for six years, says the amount of abuse has increased since the pandemic and the ensuing rise in the cost of the living.

She said staff were screamed at several times a day, mostly due to pricing disputes.

Earlier this year Ms Madsen's manager decided to issue staff with body-worn cameras in case situations escalated.

Ms Madsen estimated the cameras have decreased abuse by about 70 per cent.

Earlier this year, several major retailers introduced body-worn cameras in department stores across the country in a bid to reduce rising rates of abusive behaviour from customers.

Feeling 'a sense of threat'
University of Queensland senior lecturer and specialist in human behaviour and decision-making Michael Noetel said it was not surprising that tensions were rising during tough times in Australia.

"Whenever we feel a sense of threat or insecurity, often we'll do a whole lot of different things to try to manage that … like getting angry or aggressive," he said.

Dr Noetel said it was easy to unleash on strangers not providing "what you need to survive".

He said it was useful for people becoming stressed or angry to remind themselves that the other party was just trying to do their job and faced their own pressures.

"The other thing that works is expressing vulnerability instead of rage," Dr Noetel said.

"When we get angry at someone, their instinct is to get angry back and not give us what we want.

"When people see our softer side or hear how things are hard for us, they often want to help."

Ms Crocker said incidents between tenants and agents had decreased since cameras were introduced at 360 Property Management.

But she said some people became agitated because of the presence of the devices.

Ms Crocker said the cameras were used purely for security purposes.

"We decided it was time to start wearing cameras, not only for our safety, but for the tenants as well, to make sure that they can see that everything is above board when we do our inspections," she said.

"If there is an incident, we have footage to back that up."

 

[themickey]

National cabinet set a new target to build 1.2 million new homes over five years from July next year.

So that's not 5 years but 6 years, as usual deviousness from government.

Australian Property
Australia requires 500,000 homes in four years just for migrants

Leith van Onselen Thursday, 22 June 2023
https://www.macrobusiness.com.au/20...500000-homes-in-four-years-just-for-migrants/

Earlier this week, I estimated that Australia needs to supply 329 new homes every day over the five years to 2026-27 just to keep pace with the record 1.5 million net overseas migration (NOM) projected in the federal budget.

Source: 2023 federal budget

On Thursday, Domain released its own forecasts on the number of dwelling needed to keep pace with Australia’s record NOM:

According to Domain, Australia will require 497,984 additional homes over the four years to 2025-26 just to house the 1,235,000 net overseas migrants projected to arrive over the same four year period.

This means Australia will need 341 new homes every day for four years!

“Population growth from overseas migration places greater and more immediate pressure on housing demand than natural increase – as they often need to rent or buy upon arrival. Whereas natural population increase results in a more gradual housing pressure”, Domain notes in its report.

“Net overseas migration is estimated to be at a record high over the current financial year and next – we estimate almost 300,000 additional dwellings will be needed”.

“Typically, overseas migrants rent on arrival, but, with a tight rental market Australia-wide, we may see some arrivals transition to home ownership sooner as they seek more stable housing alternatives”.

“The rise of migrant numbers will also make rentals seem like a better investment option, and the shift to home buying from migrants will exert upward pressure on property prices, particularly in the current under-supplied market conditions”.

“Population growth will be a substantial factor pushing property prices higher, particularly with the Albanese government’s momentum in lifting temporary and permanent visa grants to alleviate skills shortages”.

“Given the recent and ongoing changes to the migration program, around guaranteeing permanent residency to temporary skilled workers, overhauling the system to allow faster visa processing times for all visa classes, and net overseas migration forecast at 1.5 million migrants over the next five years, population pressures will significantly drive housing demand”, Domain concludes.

The probability that Australia will achieve these housing supply requirements are miniscule given construction rates are declining amid widespread builder failures and soaring materials and financing costs:

Treasury secretary Steven Kennedy told this month’s Senate Estimates hearing that the downturn in dwelling approvals is forecast to continue until 2025, with investment in new dwellings expected to decline by 2.5% this year and a further 3.5% in 2023‑24 and 1.5% in 2024‑25.

It is also worth remembering that Australia needs to build more than the above supply targets to account for homes lost through demolition.

Adding a projected 1,194 people per day (primarily through immigration) when dwelling construction rates are falling means Australia’s housing crisis will worsen, resulting in escalating rents and rising homelessness.

Running an extreme immigration policy into a housing crisis is pure policy madness.

Anthony Albanese has kicked vulnerable households to the streets and should be ashamed of himself.

 

[themickey]

Running an extreme immigration policy into a housing crisis is pure policy madness.
Anthony Albanese has kicked vulnerable households to the streets and should be ashamed of himself.

The truth is, government want house prices to rise, but they pretend otherwise.
The fact that protecting the rich is more important than housing citizens is obvious.

 

[themickey]

Politics Federal Property market
Housing plan will save renters $32 billion over a decade: Grattan

By Shane Wright August 18, 2023

Rents could be up to 8 per cent lower, saving renters $32 billion in payments to landlords and real estate agents over the next decade, as Prime Minister Anthony Albanese sets up another fight with the Greens over national housing policy.

Independent analysis by the centrist Grattan Institute think tank shows upward pressure on rents will be reduced if states and territories deliver an extra 200,000 new homes on top of an initial target of 1 million.

The federal government’s $3.5 billion plan to boost housing supply would reduce rents by 8 per cent over the next decade, says the Grattan Institute.Credit: Peter Rae

Premiers and chief ministers on Wednesday backed a suite of proposals from Albanese at national cabinet to massively boost housing supply between 2024 and 2029, and improve renters’ rights.

Under the $3 billion New Home Bonus, states and territories will get about $15,000 in federal funding for every dwelling built above the earlier 1 million target, with the aim of adding 200,000.

A separate $500 million competitive fund, called the Housing Support Program, is available to councils and states to encourage more construction near transport hubs and employment centres, a concept vocally backed by most premiers.

Grattan’s economic policy program director Brendan Coates said the $3.5 billion in incentive payments would make it worthwhile for states to get enough new homes built that it would put downward pressure on the rental market.
He said if the plan was implemented in full, the 200,000 extra homes could reduce rents by 4 per cent, saving renters $8 billion by 2029. Over the coming decade, the extra supply of dwellings would keep rents 8 per cent lower, saving renters $32 billion.

“It’s a good plan, but now it needs to be delivered. The devil will be in the detail of the incentives framework, to make sure the states are only being rewarded for getting homes built that wouldn’t otherwise have been built,” he said.
“And the federal government still has work to do to ensure we can find the skilled workers needed to build these extra houses, including by streamlining pathways to skilled migration.”

At the Labor Party’s national conference on Thursday, Albanese announced the promised Help to Buy scheme – under which the government will take an equity stake in a new home for low and middle-income earners – would start next year.

The nationwide housing supply crisis and how to solve it has dominated today's national cabinet meeting.

The states will have to pass their own legislation for the scheme – based on existing state-based programs – which the federal government says will help up to 40,000 households over coming years.

Albanese admitted the housing market was hurting buyers and renters.

“The simple truth is, it’s harder these days, harder for so many more Australians, harder for people who need public or community housing, harder for renters and harder for first homebuyers. The fundamental answer to all of this, of course, is supply, building more homes,” he said.

“A home is the foundation on which you build everything else, there is nothing that lets you reach higher than a solid floor under your feet. Nothing like a roof over your head to give you the sense that the sky is the limit.”

But Opposition Leader Peter Dutton was sceptical that all 1.2 million homes would be built.

“Increasing it to 1.2 million might sound good, and the prime minister might be talking a big game, but the prime minister never delivers,” he told reporters in Western Sydney.

“And as we’ve seen in relation to other issues, he just doesn’t get across the detail. He makes the announcement, but there’s no delivery.”

The Greens, which have held up the government’s $10 billion Housing Australia Future Fund in the Senate with demands for a national rent freeze and more spending on affordable housing, said Labor had sold out millions of people by not freezing and then capping rents.

Party leader Adam Bandt labelled the Help to Buy program the “Hard to Get” scheme while accusing the government of doing the bidding of the property sector.

“Rent controls and rent freezes work for renters,” Bandt said.

“Maybe the property developers and property moguls, who get billions of dollars of handouts from the state and federal governments, might not like it so much, but it works for renters and a third of the country who rent is who we’re going to fight for.”

Bandt dismissed warnings that rent freezes and caps would put upward pressure on rents and reduce incentives for landlords to supply more properties, and said the government needed to spend more on public housing.

But property organisations and community groups backed the government’s proposals.

Master Builders of Australia chief executive Denita Wawn said the incentive payments should help bring more dwellings into the property market.

“This now provides the incentive that we’ve been seeking from the federal government to put significant pressure on the state and territory governments to get their houses in order ... around planning and developer charges and so forth that has been restricting housing supply,” she said.

 

[themickey]

But Opposition Leader Peter Dutton was sceptical that all 1.2 million homes would be built.
“Increasing it to 1.2 million might sound good, and the prime minister might be talking a big game, but the prime minister never delivers,” he told reporters in Western Sydney.
“And as we’ve seen in relation to other issues, he just doesn’t get across the detail. He makes the announcement, but there’s no delivery.”

There's no delivery because of continual government incompetence, corruption, greed.
Government will do everything to deflect that they are the problem!

 

[themickey]

Real Estate in many states in Australia allow for 6 monthly rent increases.
What industry anywhere gives 6 monthly wage increases?
Nowhere!
But for real estate who have been given by government the blessing to screw renters.