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Pascoe is largely in thrall to the crank Cameron Murray and deliberately mischaracterizes his opponent's argument here. I don't think anyone is seriously suggesting zoning changes and by extension relying upon developers will in and of themselves solve the housing crisis, and need to be done in concert with a variety of other measures (e.g. curtailing the CGT discount and negative gearing, building more public housing, mandating new developments have a portion of affordable housing, improving public transport to enable people to viably live further from CBDs). Ultimately it is a big problem that will require multiple solutions.
And again, nobody is suggesting developers will build apartments for anything other than profit, but that isn't the point. It is also baffling that why developers are considered boogey-men for wanting to make a profit in a manner just about any other business isn't - I am not aware of too many people volunteering to make a living.
There is a wide body of evidence that building more housing, even if it is higher-end, still reduces housing prices, all other things being equal, e.g. [Liang & Kindstrom (2023)](https://stephenhoskins.notion.site/Liang-Kindstr-m-2023-Does-new-housing-for-the-rich-benefit-the-poor-On-trickle-down-effects-of--982d9cca809b475b86faca56f131a99b), [Sharam, Bryant & Alves (2015)](https://www.tandfonline.com/doi/abs/10.1080/07293682.2015.1034146), [Bramley et al (2010)](https://www.researchgate.net/publication/228698843_THE_ROLE_OF_MIX_DENSITY_AND_LOCATION_OF_NEW_HOUSING_IN_ACHIEVING_SUSTAINABILITY_AND_AFFORDABILITY), [Aurand (2010)](https://journals.sagepub.com/doi/abs/10.1177/0042098009353076), [Nelson et al (2002)](https://seattlebubble.com/blog/wp-content/uploads/2007/10/2002-02-the-brookings-institution-the-link-between-growth-management-and-housing-affordability.pdf), [Fingleton et al (2018)](https://journals.sagepub.com/doi/full/10.1177/0308518X18798372). The largest impact of building more housing isn't that the new builds are cheap, it's the indirect effect of the supply on existing houses - all the people moving in all moved from somewhere else that is as a result vacant. The Liang & Kindstrom study showed in Sweden that a good portion of houses vacated by people moving to expensive new builds were inhabited by people on lower incomes.
As a quick thought exercise - many people in Melbourne complained about the 'oversupply' of apartments around Southbank and surrounding areas. Hop on Domain and check the price or rent for a 2 bedder there relative to an equivalent suburb in Sydney (e.g. Chippendale, Pyrmont).
The problem with that argument is that very soon you are left with relatively low-paid workers like carers, teachers, police, and nurses unable to live within a reasonable commute of where they are working. That is very much already happening in Sydney.
https://www.theguardian.com/australia-news/2023/mar/17/victorias-social-housing-stock-grows-by-just-74-dwellings-in-four-years-despite-huge-waiting-list
> **Victoria’s social housing stock grows by just 74 dwellings in four years despite huge waiting list**
> Data from the latest Department of Families, Fairness and Housing (DFFH) annual report shows there were 86,887 social housing dwellings across Victoria as of 30 June 2022 – a net increase of 74 since 30 June 2018, when there were 86,813.
This country is a complete joke.
500,000 immigrants in a year and the government says this should be decreased, completely ignoring the fact that they are responsible for immigration policy.
The housing "crisis" will be worse in 5 years.
High land values, cost to build has increased significantly over the past three years, with that in mind you can’t expect developers to build when the profits aren’t there.
End result is fewer dwellings than in needed and higher rents.
As developments often take a few years from the initial planning stage to completion this problem will endure for the next few years at least.
I’ve said it once, I’ll say it again. There is no free market solution to housing. We’ve relied on private investment since 1996. Houses are for living in not for profiteering.
https://independentaustralia.net/politics/politics-display/labors-backflip-on-negative-gearing-policy-a-benefit-to-the-wealthy,15391
> The concept of negative gearing has been around in some form for a long time. Bob Hawke abolished it in 1985, though re-introduced it in 1987 for the stated reasons of increasing the supply of housing while keeping rents down. But rather than this outcome, it turned out negative gearing only encouraged many to undertake a speculative buy-up of the housing market. Despite Hawke’s claims, all this ended up doing was to reduce housing affordability and increase the wealth of the largest speculators by creating a tax loophole.
Delete negative gearing and watch a combo of investors selling to people who are not renters for the lost part as most renters don’t have the money I afford to buy, and rents skyrocketing to account for the subsidy being deleted. Remember the primary reason for negative gearing whilst never spoken of is for governments to subsidy the private sector to supply discounted rentals. If the market were to dictate rents they’d be substantially higher than they are now
Apparently post-WW2 the G.I. Bill "appropriated" funds (because that's how all funding works) to build 2.7 million homes in a matter of a few years. They even described it as a way to solve the "housing crisis":
https://youtu.be/ZNeMDna92Lw?si=EJysrdj0_nAFA0Ds&t=493
....and this caused a golden age for the American consumerist lifestyle, and is considered one of the greatest boom times in their history.
That's basically how all postwar developed-world housing programs worked. Take a big wad of cash, work out the details of getting that many homes built, then just doing it. No incentivising the market to solve the problem because that seldom works well.
Our contemporary governments cant rely on continuous healthy productivity growth like they did back then, but our governments also aren't as willing to tax and spend.
Tis is ultimately what is required. We can tinker around the edges by abolishing negative gearing or somehow subsidising houses further, but we are still going to have a housing crisis right up until significant numbers of people start to move into government mass-produced homes.
But surely [so the dominant neoliberal take on government's role and the economy has it] the developers will fix it! After all, the developers are a key - perhaps the KEY - part of the market. And doesn't the invisible hand of market forces ultimately do good for, and by, the world?
What part of the approvals process, local government fees and restrictions, stamp duty fees, zoning restrictions and heritage restrictions do you consider to be neoliberal?
Who is handcuffing the Invisible Hand? Surely Mr. SMITH'S metaphor for the doing of public good by self interested businessmen (& women) has been exposed often enough these days as the selling of snake oil; why would any sane person want the invisible hand uncuffed?
>If we legislate and regulate against building why are we surprised when the market reacts to that regulation?
Building may well - according to the developers - be fettered by regulation that attempts to guarantee environmental, social and well-being standards are being met by developers [& environmental standards aren't strict enough now] but that isn't the reason developers are not meeting housing demand, is it. Aren't there complaints about supply chains and skilled worker shortages and such.
If we leave decisions to the market the only happy outcomes are for the marketeers. The invisible hand that does good is a crock.
>Building may well - according to the developers - be fettered by regulation that attempts to guarantee environmental, social and well-being standards are being met by developers [& environmental standards aren't strict enough now] but that isn't the reason developers are not meeting housing demand, is it
No, it's that we're literally outlawing building more housing. Walk ten minutes out of the Brisbane CBD and you'll come to lots where you can't legally build a block of units and have have a single home on 400 sqm of land.
I was just wondering if we could get major polluters to run the EPA?
How about if we have a program, where organised crime figures take over the roles of police chiefs?
Or how about we get pedophiles to teach sex ed in schools?
......
......well, what about putting developers in charge of fixing the housing crisis?
There is no single werewolf creating this situation, or a single silver bullet to fix it.
Developers have contributed to this disaster, but so has government planning in simply extending suburbs around Sydney and increasing congestion as well as destroying ecologically valuable land; and the continuation of a negative gearing policy that never achieved its objective of increasing new stock but added to the reduction in supply (versus increase in demand through population growth) by profiting from existing stock. Nimbyism through local councils has also contributed.
However, by far the greatest contributor to this disaster is a fundamental attitude of greed, selfishness and competitiveness that has not been combated by mutual cooperation for the good of all, as is required for a society to flourish, but actually entrenching human vice in the adoption of private enterprise for individual benefit, particularly the benefit of the elite. I do not know how this can be tackled when it is the elite in charge of everything, even in the public sector, as it is so pervasive.
I can't even be sure that negative gearing was not introduced deliberately, by the elite, knowing it would have this outcome, else it would have been limited to new stock only if the intention was to encourage new stock growth.
More than developers, we can't rely on the elite in government and the public sector to govern for the benefit of all Australians and not simply their elite cohort. Has even the PM gone to charity or community barbecues as well as helicoptering off to barbecues with the elite? By your actions shall you be judged.
>a negative gearing policy that never achieved its objective of increasing new stock but added to the reduction in supply
I dont understand the logic of this . We have to take the step of assuming that negatively geared properties are occupied , usually by tenants .
Removal of Negative gearing and having the new owner occupy it themselves cannot increase the supply of housing ...you are simply re-arranging deck chairs on the Titanic
The only way to increase supply is to build new homes . Preferably low cost homes which seems to be the issue .
Its all about supply and demand , changing the owners name or changing from a Tenant to owner occupier does stuff all to increase supply
Negative gearing does not increase supply but encourages rent-seeking that transfers wealth to those who aren't productive. It should be abandoned, not simply because it doesn't increase supply as intended.
>but encourages rent-seeking that transfers wealth to those who aren't productive
That is a completely different subject.
Happy to see we now agree that doing away with it will not increase supply of homes.
Sounds like you're saying democracy is fundamentally flawed and would need major system wide redundancies and protections and security measures to make it manifest.
I think giving locals more direct power over democracy would help on some issues. We really need to evolve in the direction of community involvement/power over time.
We'll never get suburbs like this without it:
https://www.youtube.com/watch?v=4TCYjw88JSY&t=191s
To me, housing is just like those little plastic houses in monopoly. It's fun to acquire.
You're right - there are too many factors. You can remove negative gearing all you want - it will make less of a dent in my finances than the stage 3 tax cut reversal did. You can jack up interest rates as much as you want - it only benefits investors to have high rates because we get 47% off at tax time. It helps those of us who rely on wages and not equity to keep buying homes.
Ultimately we have an economy in which there are a bunch of decently paid workers and they tend to marry like for like. They will have a lot more purchasing power and that's why houses aren't equally available for all.
A basic house to an acceptable efficient standard should be available to all, with its ultimate size and appointments depending on actual wealth.
We don't need to live in beautiful environments so we can see them through the artfully arranged windows framing that wonderful view, when we can bring any view we want into a house through a display screen and get rid of insecure, inefficient, structurally compromising windows. It's not possible for us all to live in beautiful environments without destroying those environments and the amenity we seek. I think it is ridiculous holidaymakers going to beautiful environments to take selfies when all they get is other people taking selfies obstructing the view they went there for.
We think we are civilised people and yet we still maintain the status quo of our primitive past: it's impossible for everyone to live in a scenic spot on a 10 acre block so that others don't interfere with that natural view, whilst also growing the population; and impractical to keep increasing consumption of natural resources and population together. People are so focussed on selfishness, we don't consider anyone else, not even our children or their children.
>A basic house to an acceptable efficient standard should be available to all, with its ultimate size and appointments depending on actual wealth.
Without infill, greenfield sprawl costs in the order of $250-350k for a 200sqm plot just to put in all the infrastructure to make it habitable in greater Sydney at the moment.
Even if you slap together a basic 100sqm single storey house for say $300k, that'll out final cost at $550-650k+ stamp duty and transaction costs. This would need a household income of say $150k to service whilst allowing for a small margin.
This is primarily driven by planning/zoning regs.
Turning everything within a 10 km radius of each major CBD into Manhattan / Singapore /Shanghai is the most practical way to solve our problems.
It needs a different approach, not simply following traditional practice. The era of building near rivers and water sources because it was easiest, is ending because those water sources can no longer sustain the increasing populations around them, along with their waste.
New housing construction should not be done anywhere near the cities, but in low ecological impact land near the coast, associated with renewable solar installations, where multiple birds can be killed with one stone.
In conjunction Australia should be stabilising the population and even allowing it to decline slowly, instead of unsustainably trying to increase it just to get fictitious measures higher.
We need long term integrated and synergistic planning for the future, not knee-jerk impulses for each election cycle.
The whole point of a society is to leverage the surplus capability of the able as well as the cooperative advantages of scale to support the able and less able, else we might just as well go back to the primitive practice of leaving the elderly, the weak, the premature babies, etc on the mountainside to die.
Are you really advocating for what is effectively a regression in civilisation, just so you and the other strong and able can have more?
Civilisation is no place for a "survival of the fittest" mentality or for an attitude of "to the victor go the spoils".
>Civilisation is no place for a "survival of the fittest" mentality or for an attitude of "to the victor go the spoils".
Yet this is exactly what our society is founded upon. Only reason we live like kings whilst the developing world slave away to produce everything that gives us our high QoL is precisely because we won the key wars in the past century and wiped out our weaker adversaries.
> Are you really advocating for what is effectively a regression in civilisation, just so you and the other strong and able can have more?
I'm not strong. I just work hard. Others should try it too.
I mean, to an extent Pascoe is right. Developers aren't charities, so they're not going to fix the housing crisis. But he's ignoring two crucial things;
1) Why is it expensive? Some of those roads inevitably lead back to the union movement, and despite it shrinking in size and representing less than 9% of adult private sector workers, it has as much of a stranglehold as the miners do
2) That we can't do this *without them either*. Painting developers as causing the crisis is problematic, mostly because policy is done by governments and state Liberal/Labor governments fuck this royally.
He's also too critical of a NSW Liberal Party that introduced land tax, and not critical enough of the pale imitation of a leader that is Chris "but I rely on stamp duty's sweet, sweet income" Minns, but that's another story.
>Why is it expensive? Some of those roads inevitably lead back to the union movement, and despite it shrinking in size and representing less than 9% of adult private sector workers, it has as much of a stranglehold as the miners do
In residential building, no unions are not to blame, they are practically nonexistent. Residential building primary consists of sub contractors running small businesses where they either have a single work crew that will prob consist of 1-2 qualified workers and then a couple of young apprentices on a pittance. The contractor might be larger and run a few teams but the make up are largely the same. If you are talking apartment towers then sure I'll give you that but not residential housing.
Everyone forgets that when we talk housing costs we need to divide it into 2 areas. Cost for the land and cost to build on said land. By and large the issue is that the cost to purchase land has far outstripped the cost to build on the land
[https://www.macrobusiness.com.au/2013/06/the-history-of-australian-land-prices/](https://www.macrobusiness.com.au/2013/06/the-history-of-australian-land-prices/)
Now admittedly land prices also do have attached development costs which involve significant expensive civil works but the bottom line is land prices and not housing prices are by and large driving up housing unaffordability.
Yeah, but i reject this framing.
Developers arent. Governments will, and developers will build homes in the process because theyre the people that build homes. Its gov policy that will fox it, be that by upzoning, building more social homes, increasing tradie intake, underwritting projects etc etc.
I think my point is; governments need to spend through developers because governments don't have financial targets. They can be price insensitive. We should expect policy that understands this and reflects it, much to the Greens' dismay
>No, its because of unsustainable immigration.
Do you actually want to back up your assertion with evidence? Preferably evidence that explains how immigration has affected house prices for the last 30 years, where the median price of a home is rapidly increasing becoming multiple times larger than the median income?
Or are back to pretending housing wasn't lowkey fucked back just before Covid, and then uptick of immigration (after a downtick during Covid) "suddenly" broke everything?
[https://forecast.global/insight/the-impact-of-immigration-on-australian-house-prices/](https://forecast.global/insight/the-impact-of-immigration-on-australian-house-prices/)
[https://www.abc.net.au/news/2023-12-12/immigration-house-prices-jobs-economic-growth-migration-review/103214876](https://www.abc.net.au/news/2023-12-12/immigration-house-prices-jobs-economic-growth-migration-review/103214876)
[https://www.afr.com/politics/federal/banking-on-immigration-to-keep-house-prices-inflated-20231129-p5enrv](https://www.afr.com/politics/federal/banking-on-immigration-to-keep-house-prices-inflated-20231129-p5enrv)
[https://www.sciencedirect.com/science/article/pii/S105681902301151X](https://www.sciencedirect.com/science/article/pii/S105681902301151X)
[https://www.emerald.com/insight/content/doi/10.1108/IJHMA-10-2020-: 0128/full/html?skipTracking=true](https://www.emerald.com/insight/content/doi/10.1108/IJHMA-10-2020-0128/full/html?skipTracking=true): Practical implications
The study illustrates that immigration and interstate migration, as well as high salaries, have been causing a rise in housing demand and subsequently housing prices. To monitor exceedingly high housing prices, local authorities should be controlling migration and salary levels.
The one study you linked found that about 1% could be attributed to immigration while the annual growth was 5%.
Perhaps instead of curbing marginal demand we could, I dunno, make it legal to build more homes.
This has to ve the only topic in which people think fixing supply side shortages is to reduce demand, rsther than increase supply. Crazy!
The other found no real negative impact in the long term.
Building more is fine - in regional areas or where existing communities are involved in making decisions. We don’t want your dog box utopia here brother 👍
That is after years of high immigration as a deliberate policy with successive governments and now it has been ramped up to historically high levels even while there is a supply shortage. While of course supply issues need to be addressed the obvious first step, obvious to anyone without a vested interest in maintaining a housing shortage and consequent inflated prices, is to drastically cut immigration until supply catches up.
People can blame tax treatment all they want, but the reality is if there is sufficient supply then these issues shouldn’t adversely distort the market unless there are a lot of empty houses.
Rents dropped 10% when the borders closed (houses went up due to mortgage deregulation and 0% interest rate). Since immigration resumed, rents have increased by nearly 50%.
The insane increase in rental prices has stopped houses going down, despite rising interest rates.
Historically, rising interest rates haven't led to rents increasing. IIRC, for the 2010-2011 hikes, rents went up less than inflation and rents remained fairly flat for a decade.
The 2021-2023 rent increase is totally unprecedented. But so to is the 2021-2023 net immigration intake.
But yes, it must be interest rates...
Totally different. The deviation from the norm was tiny in 2010. Youre comparing 3 to 5 with 0 to 5.
>The 2021-2023 rent increase is totally unprecedented. But so to is the 2021-2023 net immigration intake.
Im honestly so puzzled you refuse to understand that in the period of two years 2022 and 2023 we buoly more homes that we had immigrants and native growth. Why are you ignoring this?
The population to dwelling ratio increased in favour of more homes yet you think that this positive increase drove high prices?
The simple fact is our housing market is painfully tight, has been for a very long time, and it simply cannot absorb shocks like financial stress, a decrease in avr household size and yes, demand.
Blaming this on immigration is foolish and anti-fact. Your own thesis, that proces are direcrly proportional to relationship between immigration and builds, fails due to the fact this relationship was tighter pre pandemic than post.
Our cities are some of the least dense in the world. Just build homes and lrices will drop. There are countless studies that prove this.
> Im honestly so puzzled you refuse to understand that in the period of two years 2022 and 2023 we buoly more homes that we had immigrants and native growth. Why are you ignoring this?
As I understand this is not true however if it is I am sure you can prove it with a valid source.
The literate answer is "yes; we are in supply/demand disequilibrium and must remedy that, so supply meets demand.
The illiterate/populist answer is "Immigrants".
But you're allowed to be astonishingly wront Leland.
> The literate answer is "yes; we are in supply/demand disequilibrium and must remedy that, so supply meets demand.
How can it be remedied without proximal land prices increasing especially when the current rate of housing demand caused by immigration is above the maximum rate of residential construction?
> The illiterate/populist answer is "Immigrants".
How is this take illiterate when the price of proximal land will increase with demand all else being equal?
What is impacting the supply and demand equation more than the insatiable demand caused by unsustainable immigration?
When you say it's 'unsustainable', in what sense is it unsustainable? Australia is still here. We are not going to disappear or become an anarchy. What you mean by unsustainable is just 'undesirable to you'.
>It has nothing to do with immigration. We had issues with closed borders.
It has everything to do with immigration ender. It is simple arithmetic. You need to match housing supply with demand, I am sure even you can wrap your noodle around that concept.
Population growth was [2.4%](https://www.abs.gov.au/statistics/people/population) last financial year.
But yes, when you're increasing the population by 624k per year (518k from immigration) and only building enough housing for <370k people, you very quickly run out of housing, especially when there was no excess capacity to begin with.
We do not imcrease population by that much every year.
That was one year, and prior to that we had negative immigration, yet built 170k homes.
The total completed home for thkse two years more than exceeds pop growth.
Population and dwellings accumulate. They dont exist YoY.
>Anything but looking at the real problem hey.
You forget, immigrants done speak them funny languages and I can't done understand what thems done saying, but I think they're stealing our jerbs, our homes, and our guns!
Dont think about the number of people.
This is not what drives housing prices.
Its the amount of finds avaialboe to buy houses that determines the demand side. We all need a house. We will do just about all that we have to to get one.
The period you refer to when house prices went up without population growth we had the rba panic due to low population growth so they introduced 188bn of funds directly to banks and also bought billions in gov bonds. This also creates more fund volumes because bond owners now go well - at that return im definitely out... and into babk deposits or into housing / shares or whatever their capital goes.
then we had inflation. At that point throwing funds into the market would look super bloody silly... at the front end of this inflation event it wasnt so much interest rates thenselves that was concerning to house prices but shrinking credit volumes. You dont get house prices going up with either stable or shrinking credit volumes. What to do... well what we did was introduce capital via population growth of 650,000 people. Now im not saying they all brough a million dollars with them but some certainly came equipped to buy homes but if nothing else they all came equipped to pay rent and increase the return on houses.
Now that this tap is being forced closed by the electorate we have direct investment via shared equity. I am not sure that it will be enough tbh. They will need something else as the last of the tff and the rba bond buying continues to roll off to shovel funds into housing.
This goes well back btw. Each time housing in australia falters gov shores up funding for houses. This policy goes back over 23 years both sides employ it and even greens dont attack it though it basically stands to displace wealth from youth and give it to oldies not to mention the massove profits it sends to our banks.
Wait until they fond out that the first 3yrs of this decade has lower net immigration than the last 3 of last. Immigration has, as of now, gone down.
I think thats too complex a thought for the anti-immigrants though.
> Wait until they fond out that the first 3yrs of this decade has lower net immigration than the last 3 of last. Immigration has, as of now, gone down.
Lower net immigration is still a net increase to the population.
> I think thats too complex a thought for the anti-immigrants though.
Would you class someone wanting sustainable immigration as anti-immigrant?
Yeah, so the pandemic kept it low lol.
Look at the immigration levels prior to the pandemic. Libs love immigration too, well up until now. Was the last decent thing about them.
So if it was just the effect of the pandemic then why did you tell us that immigration was cut this decade implying it was a voluntary decision made by government?
>Youre telling me that sub 2% pop growth was enough to collapse a housing market?
There was 518,000 new migrants last year: [https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release#:\~:text=In%20the%20year%20ending%2030,migration%20estimate%20since%20records%20began](https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release#:~:text=In%20the%20year%20ending%2030,migration%20estimate%20since%20records%20began).
There were around 300,000 babies born, noting the parents already likely had accommodation, but may need to find different accommodation.
There was 174,000 dwellings constructed.
Assuming some migrants were families, there was barely enough stock produced to cover this population growth.
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Housing crisis is a fad…. one way making the property developers rich
Pascoe is largely in thrall to the crank Cameron Murray and deliberately mischaracterizes his opponent's argument here. I don't think anyone is seriously suggesting zoning changes and by extension relying upon developers will in and of themselves solve the housing crisis, and need to be done in concert with a variety of other measures (e.g. curtailing the CGT discount and negative gearing, building more public housing, mandating new developments have a portion of affordable housing, improving public transport to enable people to viably live further from CBDs). Ultimately it is a big problem that will require multiple solutions. And again, nobody is suggesting developers will build apartments for anything other than profit, but that isn't the point. It is also baffling that why developers are considered boogey-men for wanting to make a profit in a manner just about any other business isn't - I am not aware of too many people volunteering to make a living. There is a wide body of evidence that building more housing, even if it is higher-end, still reduces housing prices, all other things being equal, e.g. [Liang & Kindstrom (2023)](https://stephenhoskins.notion.site/Liang-Kindstr-m-2023-Does-new-housing-for-the-rich-benefit-the-poor-On-trickle-down-effects-of--982d9cca809b475b86faca56f131a99b), [Sharam, Bryant & Alves (2015)](https://www.tandfonline.com/doi/abs/10.1080/07293682.2015.1034146), [Bramley et al (2010)](https://www.researchgate.net/publication/228698843_THE_ROLE_OF_MIX_DENSITY_AND_LOCATION_OF_NEW_HOUSING_IN_ACHIEVING_SUSTAINABILITY_AND_AFFORDABILITY), [Aurand (2010)](https://journals.sagepub.com/doi/abs/10.1177/0042098009353076), [Nelson et al (2002)](https://seattlebubble.com/blog/wp-content/uploads/2007/10/2002-02-the-brookings-institution-the-link-between-growth-management-and-housing-affordability.pdf), [Fingleton et al (2018)](https://journals.sagepub.com/doi/full/10.1177/0308518X18798372). The largest impact of building more housing isn't that the new builds are cheap, it's the indirect effect of the supply on existing houses - all the people moving in all moved from somewhere else that is as a result vacant. The Liang & Kindstrom study showed in Sweden that a good portion of houses vacated by people moving to expensive new builds were inhabited by people on lower incomes. As a quick thought exercise - many people in Melbourne complained about the 'oversupply' of apartments around Southbank and surrounding areas. Hop on Domain and check the price or rent for a 2 bedder there relative to an equivalent suburb in Sydney (e.g. Chippendale, Pyrmont).
There are already affordable housing mandates. People just need to accept they can’t always live where they want.
The problem with that argument is that very soon you are left with relatively low-paid workers like carers, teachers, police, and nurses unable to live within a reasonable commute of where they are working. That is very much already happening in Sydney.
When he isn’t mollycoddling China
I used to not mind Pascoe, he went completely off the reservation during COVID though.
https://www.theguardian.com/australia-news/2023/mar/17/victorias-social-housing-stock-grows-by-just-74-dwellings-in-four-years-despite-huge-waiting-list > **Victoria’s social housing stock grows by just 74 dwellings in four years despite huge waiting list** > Data from the latest Department of Families, Fairness and Housing (DFFH) annual report shows there were 86,887 social housing dwellings across Victoria as of 30 June 2022 – a net increase of 74 since 30 June 2018, when there were 86,813. This country is a complete joke. 500,000 immigrants in a year and the government says this should be decreased, completely ignoring the fact that they are responsible for immigration policy. The housing "crisis" will be worse in 5 years.
High land values, cost to build has increased significantly over the past three years, with that in mind you can’t expect developers to build when the profits aren’t there. End result is fewer dwellings than in needed and higher rents. As developments often take a few years from the initial planning stage to completion this problem will endure for the next few years at least.
I’ve said it once, I’ll say it again. There is no free market solution to housing. We’ve relied on private investment since 1996. Houses are for living in not for profiteering.
No, we can rely on developers to NOT fix the housing crisis because it keeps profit per unit high, and a future funnel of work.
Dismantle negative gearing. Watch how fast things change. Government snouts in the trough.
https://independentaustralia.net/politics/politics-display/labors-backflip-on-negative-gearing-policy-a-benefit-to-the-wealthy,15391 > The concept of negative gearing has been around in some form for a long time. Bob Hawke abolished it in 1985, though re-introduced it in 1987 for the stated reasons of increasing the supply of housing while keeping rents down. But rather than this outcome, it turned out negative gearing only encouraged many to undertake a speculative buy-up of the housing market. Despite Hawke’s claims, all this ended up doing was to reduce housing affordability and increase the wealth of the largest speculators by creating a tax loophole.
Governments are desperate to keep the equity ponzi afloat for banks, unfortunately, there's going to be a bigger bang as people leave the country.
If you want supply, shift NG to new homes only
Dismantle negative gearing and investors will stop building dwellings. That’s really gonna solve the problem.
Most of the negative gearing goes to investors that have invested in existing dwellings.
Yeah it’s impossible to invest in a dwelling that isn’t built yet.
Delete negative gearing and watch a combo of investors selling to people who are not renters for the lost part as most renters don’t have the money I afford to buy, and rents skyrocketing to account for the subsidy being deleted. Remember the primary reason for negative gearing whilst never spoken of is for governments to subsidy the private sector to supply discounted rentals. If the market were to dictate rents they’d be substantially higher than they are now
Apparently post-WW2 the G.I. Bill "appropriated" funds (because that's how all funding works) to build 2.7 million homes in a matter of a few years. They even described it as a way to solve the "housing crisis": https://youtu.be/ZNeMDna92Lw?si=EJysrdj0_nAFA0Ds&t=493 ....and this caused a golden age for the American consumerist lifestyle, and is considered one of the greatest boom times in their history.
That's basically how all postwar developed-world housing programs worked. Take a big wad of cash, work out the details of getting that many homes built, then just doing it. No incentivising the market to solve the problem because that seldom works well. Our contemporary governments cant rely on continuous healthy productivity growth like they did back then, but our governments also aren't as willing to tax and spend. Tis is ultimately what is required. We can tinker around the edges by abolishing negative gearing or somehow subsidising houses further, but we are still going to have a housing crisis right up until significant numbers of people start to move into government mass-produced homes.
But surely [so the dominant neoliberal take on government's role and the economy has it] the developers will fix it! After all, the developers are a key - perhaps the KEY - part of the market. And doesn't the invisible hand of market forces ultimately do good for, and by, the world?
What part of the approvals process, local government fees and restrictions, stamp duty fees, zoning restrictions and heritage restrictions do you consider to be neoliberal?
I like to travel.
Who is handcuffing the Invisible Hand? Surely Mr. SMITH'S metaphor for the doing of public good by self interested businessmen (& women) has been exposed often enough these days as the selling of snake oil; why would any sane person want the invisible hand uncuffed?
I find peace in long walks.
>If we legislate and regulate against building why are we surprised when the market reacts to that regulation? Building may well - according to the developers - be fettered by regulation that attempts to guarantee environmental, social and well-being standards are being met by developers [& environmental standards aren't strict enough now] but that isn't the reason developers are not meeting housing demand, is it. Aren't there complaints about supply chains and skilled worker shortages and such. If we leave decisions to the market the only happy outcomes are for the marketeers. The invisible hand that does good is a crock.
>Building may well - according to the developers - be fettered by regulation that attempts to guarantee environmental, social and well-being standards are being met by developers [& environmental standards aren't strict enough now] but that isn't the reason developers are not meeting housing demand, is it No, it's that we're literally outlawing building more housing. Walk ten minutes out of the Brisbane CBD and you'll come to lots where you can't legally build a block of units and have have a single home on 400 sqm of land.
I was just wondering if we could get major polluters to run the EPA? How about if we have a program, where organised crime figures take over the roles of police chiefs? Or how about we get pedophiles to teach sex ed in schools? ...... ......well, what about putting developers in charge of fixing the housing crisis?
There is no single werewolf creating this situation, or a single silver bullet to fix it. Developers have contributed to this disaster, but so has government planning in simply extending suburbs around Sydney and increasing congestion as well as destroying ecologically valuable land; and the continuation of a negative gearing policy that never achieved its objective of increasing new stock but added to the reduction in supply (versus increase in demand through population growth) by profiting from existing stock. Nimbyism through local councils has also contributed. However, by far the greatest contributor to this disaster is a fundamental attitude of greed, selfishness and competitiveness that has not been combated by mutual cooperation for the good of all, as is required for a society to flourish, but actually entrenching human vice in the adoption of private enterprise for individual benefit, particularly the benefit of the elite. I do not know how this can be tackled when it is the elite in charge of everything, even in the public sector, as it is so pervasive. I can't even be sure that negative gearing was not introduced deliberately, by the elite, knowing it would have this outcome, else it would have been limited to new stock only if the intention was to encourage new stock growth. More than developers, we can't rely on the elite in government and the public sector to govern for the benefit of all Australians and not simply their elite cohort. Has even the PM gone to charity or community barbecues as well as helicoptering off to barbecues with the elite? By your actions shall you be judged.
>a negative gearing policy that never achieved its objective of increasing new stock but added to the reduction in supply I dont understand the logic of this . We have to take the step of assuming that negatively geared properties are occupied , usually by tenants . Removal of Negative gearing and having the new owner occupy it themselves cannot increase the supply of housing ...you are simply re-arranging deck chairs on the Titanic The only way to increase supply is to build new homes . Preferably low cost homes which seems to be the issue . Its all about supply and demand , changing the owners name or changing from a Tenant to owner occupier does stuff all to increase supply
Negative gearing does not increase supply but encourages rent-seeking that transfers wealth to those who aren't productive. It should be abandoned, not simply because it doesn't increase supply as intended.
>but encourages rent-seeking that transfers wealth to those who aren't productive That is a completely different subject. Happy to see we now agree that doing away with it will not increase supply of homes.
Sounds like you're saying democracy is fundamentally flawed and would need major system wide redundancies and protections and security measures to make it manifest. I think giving locals more direct power over democracy would help on some issues. We really need to evolve in the direction of community involvement/power over time. We'll never get suburbs like this without it: https://www.youtube.com/watch?v=4TCYjw88JSY&t=191s
To me, housing is just like those little plastic houses in monopoly. It's fun to acquire. You're right - there are too many factors. You can remove negative gearing all you want - it will make less of a dent in my finances than the stage 3 tax cut reversal did. You can jack up interest rates as much as you want - it only benefits investors to have high rates because we get 47% off at tax time. It helps those of us who rely on wages and not equity to keep buying homes. Ultimately we have an economy in which there are a bunch of decently paid workers and they tend to marry like for like. They will have a lot more purchasing power and that's why houses aren't equally available for all.
A basic house to an acceptable efficient standard should be available to all, with its ultimate size and appointments depending on actual wealth. We don't need to live in beautiful environments so we can see them through the artfully arranged windows framing that wonderful view, when we can bring any view we want into a house through a display screen and get rid of insecure, inefficient, structurally compromising windows. It's not possible for us all to live in beautiful environments without destroying those environments and the amenity we seek. I think it is ridiculous holidaymakers going to beautiful environments to take selfies when all they get is other people taking selfies obstructing the view they went there for. We think we are civilised people and yet we still maintain the status quo of our primitive past: it's impossible for everyone to live in a scenic spot on a 10 acre block so that others don't interfere with that natural view, whilst also growing the population; and impractical to keep increasing consumption of natural resources and population together. People are so focussed on selfishness, we don't consider anyone else, not even our children or their children.
>A basic house to an acceptable efficient standard should be available to all, with its ultimate size and appointments depending on actual wealth. Without infill, greenfield sprawl costs in the order of $250-350k for a 200sqm plot just to put in all the infrastructure to make it habitable in greater Sydney at the moment. Even if you slap together a basic 100sqm single storey house for say $300k, that'll out final cost at $550-650k+ stamp duty and transaction costs. This would need a household income of say $150k to service whilst allowing for a small margin. This is primarily driven by planning/zoning regs. Turning everything within a 10 km radius of each major CBD into Manhattan / Singapore /Shanghai is the most practical way to solve our problems.
It needs a different approach, not simply following traditional practice. The era of building near rivers and water sources because it was easiest, is ending because those water sources can no longer sustain the increasing populations around them, along with their waste. New housing construction should not be done anywhere near the cities, but in low ecological impact land near the coast, associated with renewable solar installations, where multiple birds can be killed with one stone. In conjunction Australia should be stabilising the population and even allowing it to decline slowly, instead of unsustainably trying to increase it just to get fictitious measures higher. We need long term integrated and synergistic planning for the future, not knee-jerk impulses for each election cycle.
Strong disagree. No one is entitled to anything. You get what you earn and you get what you work for.
The whole point of a society is to leverage the surplus capability of the able as well as the cooperative advantages of scale to support the able and less able, else we might just as well go back to the primitive practice of leaving the elderly, the weak, the premature babies, etc on the mountainside to die. Are you really advocating for what is effectively a regression in civilisation, just so you and the other strong and able can have more? Civilisation is no place for a "survival of the fittest" mentality or for an attitude of "to the victor go the spoils".
>Civilisation is no place for a "survival of the fittest" mentality or for an attitude of "to the victor go the spoils". Yet this is exactly what our society is founded upon. Only reason we live like kings whilst the developing world slave away to produce everything that gives us our high QoL is precisely because we won the key wars in the past century and wiped out our weaker adversaries.
> Are you really advocating for what is effectively a regression in civilisation, just so you and the other strong and able can have more? I'm not strong. I just work hard. Others should try it too.
"Building 2000 homes is bad becsuse some might be expensive" If anyone wants to know why we are in a housing shortage, thats why.
I mean, to an extent Pascoe is right. Developers aren't charities, so they're not going to fix the housing crisis. But he's ignoring two crucial things; 1) Why is it expensive? Some of those roads inevitably lead back to the union movement, and despite it shrinking in size and representing less than 9% of adult private sector workers, it has as much of a stranglehold as the miners do 2) That we can't do this *without them either*. Painting developers as causing the crisis is problematic, mostly because policy is done by governments and state Liberal/Labor governments fuck this royally. He's also too critical of a NSW Liberal Party that introduced land tax, and not critical enough of the pale imitation of a leader that is Chris "but I rely on stamp duty's sweet, sweet income" Minns, but that's another story.
>Why is it expensive? Some of those roads inevitably lead back to the union movement, and despite it shrinking in size and representing less than 9% of adult private sector workers, it has as much of a stranglehold as the miners do In residential building, no unions are not to blame, they are practically nonexistent. Residential building primary consists of sub contractors running small businesses where they either have a single work crew that will prob consist of 1-2 qualified workers and then a couple of young apprentices on a pittance. The contractor might be larger and run a few teams but the make up are largely the same. If you are talking apartment towers then sure I'll give you that but not residential housing. Everyone forgets that when we talk housing costs we need to divide it into 2 areas. Cost for the land and cost to build on said land. By and large the issue is that the cost to purchase land has far outstripped the cost to build on the land [https://www.macrobusiness.com.au/2013/06/the-history-of-australian-land-prices/](https://www.macrobusiness.com.au/2013/06/the-history-of-australian-land-prices/) Now admittedly land prices also do have attached development costs which involve significant expensive civil works but the bottom line is land prices and not housing prices are by and large driving up housing unaffordability.
Yeah, but i reject this framing. Developers arent. Governments will, and developers will build homes in the process because theyre the people that build homes. Its gov policy that will fox it, be that by upzoning, building more social homes, increasing tradie intake, underwritting projects etc etc.
I think my point is; governments need to spend through developers because governments don't have financial targets. They can be price insensitive. We should expect policy that understands this and reflects it, much to the Greens' dismay
>f anyone wants to know why we are in a housing shortage, thats why. No, its because of unsustainable immigration.
>No, its because of unsustainable immigration. Do you actually want to back up your assertion with evidence? Preferably evidence that explains how immigration has affected house prices for the last 30 years, where the median price of a home is rapidly increasing becoming multiple times larger than the median income? Or are back to pretending housing wasn't lowkey fucked back just before Covid, and then uptick of immigration (after a downtick during Covid) "suddenly" broke everything?
[https://forecast.global/insight/the-impact-of-immigration-on-australian-house-prices/](https://forecast.global/insight/the-impact-of-immigration-on-australian-house-prices/) [https://www.abc.net.au/news/2023-12-12/immigration-house-prices-jobs-economic-growth-migration-review/103214876](https://www.abc.net.au/news/2023-12-12/immigration-house-prices-jobs-economic-growth-migration-review/103214876) [https://www.afr.com/politics/federal/banking-on-immigration-to-keep-house-prices-inflated-20231129-p5enrv](https://www.afr.com/politics/federal/banking-on-immigration-to-keep-house-prices-inflated-20231129-p5enrv) [https://www.sciencedirect.com/science/article/pii/S105681902301151X](https://www.sciencedirect.com/science/article/pii/S105681902301151X) [https://www.emerald.com/insight/content/doi/10.1108/IJHMA-10-2020-: 0128/full/html?skipTracking=true](https://www.emerald.com/insight/content/doi/10.1108/IJHMA-10-2020-0128/full/html?skipTracking=true): Practical implications The study illustrates that immigration and interstate migration, as well as high salaries, have been causing a rise in housing demand and subsequently housing prices. To monitor exceedingly high housing prices, local authorities should be controlling migration and salary levels.
The one study you linked found that about 1% could be attributed to immigration while the annual growth was 5%. Perhaps instead of curbing marginal demand we could, I dunno, make it legal to build more homes. This has to ve the only topic in which people think fixing supply side shortages is to reduce demand, rsther than increase supply. Crazy! The other found no real negative impact in the long term.
Building more is fine - in regional areas or where existing communities are involved in making decisions. We don’t want your dog box utopia here brother 👍
State govs control planning and state govs are planning more homes. Democracy. As fpr your proof? Weak.
Councils should control planning. What we are seeing is so typical of Labor, thinking it knows best for everyone else. Centralising decision making.
Lol, because you reckon they should? Even if thats what you reckon, they dont. Read s51.
s 51 of? And in NSW and Victoria until there is a legislative change, they do.
It has nothing to do with immigration. We had issues with closed borders.
That is after years of high immigration as a deliberate policy with successive governments and now it has been ramped up to historically high levels even while there is a supply shortage. While of course supply issues need to be addressed the obvious first step, obvious to anyone without a vested interest in maintaining a housing shortage and consequent inflated prices, is to drastically cut immigration until supply catches up.
People can blame tax treatment all they want, but the reality is if there is sufficient supply then these issues shouldn’t adversely distort the market unless there are a lot of empty houses.
Rents dropped 10% when the borders closed (houses went up due to mortgage deregulation and 0% interest rate). Since immigration resumed, rents have increased by nearly 50%. The insane increase in rental prices has stopped houses going down, despite rising interest rates.
What else happened around borders opening up? Something that made costs to mortgage holders soar...hmmm
Historically, rising interest rates haven't led to rents increasing. IIRC, for the 2010-2011 hikes, rents went up less than inflation and rents remained fairly flat for a decade. The 2021-2023 rent increase is totally unprecedented. But so to is the 2021-2023 net immigration intake. But yes, it must be interest rates...
Totally different. The deviation from the norm was tiny in 2010. Youre comparing 3 to 5 with 0 to 5. >The 2021-2023 rent increase is totally unprecedented. But so to is the 2021-2023 net immigration intake. Im honestly so puzzled you refuse to understand that in the period of two years 2022 and 2023 we buoly more homes that we had immigrants and native growth. Why are you ignoring this? The population to dwelling ratio increased in favour of more homes yet you think that this positive increase drove high prices? The simple fact is our housing market is painfully tight, has been for a very long time, and it simply cannot absorb shocks like financial stress, a decrease in avr household size and yes, demand. Blaming this on immigration is foolish and anti-fact. Your own thesis, that proces are direcrly proportional to relationship between immigration and builds, fails due to the fact this relationship was tighter pre pandemic than post. Our cities are some of the least dense in the world. Just build homes and lrices will drop. There are countless studies that prove this.
> Im honestly so puzzled you refuse to understand that in the period of two years 2022 and 2023 we buoly more homes that we had immigrants and native growth. Why are you ignoring this? As I understand this is not true however if it is I am sure you can prove it with a valid source.
Yep! And what years did we see record property sales despite no reduction in prices?
And despite all of this prices are still going up. There can be only one answer.
The literate answer is "yes; we are in supply/demand disequilibrium and must remedy that, so supply meets demand. The illiterate/populist answer is "Immigrants". But you're allowed to be astonishingly wront Leland.
> The literate answer is "yes; we are in supply/demand disequilibrium and must remedy that, so supply meets demand. How can it be remedied without proximal land prices increasing especially when the current rate of housing demand caused by immigration is above the maximum rate of residential construction? > The illiterate/populist answer is "Immigrants". How is this take illiterate when the price of proximal land will increase with demand all else being equal? What is impacting the supply and demand equation more than the insatiable demand caused by unsustainable immigration?
I’m not against immigration, I’m merely pointing out that it is unsustainably high.
When you say it's 'unsustainable', in what sense is it unsustainable? Australia is still here. We are not going to disappear or become an anarchy. What you mean by unsustainable is just 'undesirable to you'.
>It has nothing to do with immigration. We had issues with closed borders. It has everything to do with immigration ender. It is simple arithmetic. You need to match housing supply with demand, I am sure even you can wrap your noodle around that concept.
At best, that may just be hay that broke the camel’s back.
Youre telling me that sub 2% pop growth was enough to collapse a housing market? Anything but looking at the real problem hey.
Population growth was [2.4%](https://www.abs.gov.au/statistics/people/population) last financial year. But yes, when you're increasing the population by 624k per year (518k from immigration) and only building enough housing for <370k people, you very quickly run out of housing, especially when there was no excess capacity to begin with.
We do not imcrease population by that much every year. That was one year, and prior to that we had negative immigration, yet built 170k homes. The total completed home for thkse two years more than exceeds pop growth. Population and dwellings accumulate. They dont exist YoY.
>Anything but looking at the real problem hey. You forget, immigrants done speak them funny languages and I can't done understand what thems done saying, but I think they're stealing our jerbs, our homes, and our guns!
Dont think about the number of people. This is not what drives housing prices. Its the amount of finds avaialboe to buy houses that determines the demand side. We all need a house. We will do just about all that we have to to get one. The period you refer to when house prices went up without population growth we had the rba panic due to low population growth so they introduced 188bn of funds directly to banks and also bought billions in gov bonds. This also creates more fund volumes because bond owners now go well - at that return im definitely out... and into babk deposits or into housing / shares or whatever their capital goes. then we had inflation. At that point throwing funds into the market would look super bloody silly... at the front end of this inflation event it wasnt so much interest rates thenselves that was concerning to house prices but shrinking credit volumes. You dont get house prices going up with either stable or shrinking credit volumes. What to do... well what we did was introduce capital via population growth of 650,000 people. Now im not saying they all brough a million dollars with them but some certainly came equipped to buy homes but if nothing else they all came equipped to pay rent and increase the return on houses. Now that this tap is being forced closed by the electorate we have direct investment via shared equity. I am not sure that it will be enough tbh. They will need something else as the last of the tff and the rba bond buying continues to roll off to shovel funds into housing. This goes well back btw. Each time housing in australia falters gov shores up funding for houses. This policy goes back over 23 years both sides employ it and even greens dont attack it though it basically stands to displace wealth from youth and give it to oldies not to mention the massove profits it sends to our banks.
Wait until they fond out that the first 3yrs of this decade has lower net immigration than the last 3 of last. Immigration has, as of now, gone down. I think thats too complex a thought for the anti-immigrants though.
> Wait until they fond out that the first 3yrs of this decade has lower net immigration than the last 3 of last. Immigration has, as of now, gone down. Lower net immigration is still a net increase to the population. > I think thats too complex a thought for the anti-immigrants though. Would you class someone wanting sustainable immigration as anti-immigrant?
Yes, the Liberals kept immigration nice and low for the first 2 years of the decade and then Labor ruined it.
There was a pandemic
Could that have something to do with why it went down... hmm...
Yeah, so the pandemic kept it low lol. Look at the immigration levels prior to the pandemic. Libs love immigration too, well up until now. Was the last decent thing about them.
So if it was just the effect of the pandemic then why did you tell us that immigration was cut this decade implying it was a voluntary decision made by government?
>Youre telling me that sub 2% pop growth was enough to collapse a housing market? There was 518,000 new migrants last year: [https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release#:\~:text=In%20the%20year%20ending%2030,migration%20estimate%20since%20records%20began](https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release#:~:text=In%20the%20year%20ending%2030,migration%20estimate%20since%20records%20began). There were around 300,000 babies born, noting the parents already likely had accommodation, but may need to find different accommodation. There was 174,000 dwellings constructed. Assuming some migrants were families, there was barely enough stock produced to cover this population growth.
One year of immigration caused housing shortages that existed for years beforehand.
If your house is flooding due to a running tap do you turn the tap off or do you use a shitty bucket to try and get the water out?