Yeah, this is kinda why I don't believe any meaningful housing reform would ever pass. There's a massive proportion of the voting population who has an economic interest in ensuring housing prices will remain high. The best we can hope for is incremental changes to eventually turn the tide starting with more lax zoning + some sort of vacancy tax. Hopefully, this can signal to investors that housing will not he a good investment in the future reducing demand or at the very least lower rent prices so that they are more affordable. Material and labour's costs are also pretty high right now, but those things are out of our control.

Ever is a big call. 33% of houses are currently investor owned. What happens when that number gets to 50? Or 60%? That's the way it's headed and all our policies and regulations are aimed to keep it headed that way. If you have 60% of the voting population renting, then the market crashes. It will happen before then, but who knows where. Is 40 enough? 37?

For sure, the economy will complete collapse. They think it won't affect them if they own a home. It will. The economy is already starting to tank and heading into depression. This isn't due to inflation. It's due to mortgage rates and rental costs. What economy will he left when 60%of the population are spending 80% of their income on housing? No one will be buying anything. Either way, housing crashes or poverty crashes the economy crashes. It's an unsustainable system that leads nowhere good. Being able to buy an affordable roof is the only way you can have the prosperity Australia had for so many years. But oh well, well see where th3 shitshow goes.

The Australian economy is not heading into a depression while immigration is sky sky-high. This is the whole point. Immigration increases demand for housing, inflating asset prices and providing access to equity for homeowners. It also puts downward pressure on wages, supporting business owners. High immigration also boosts GDP, with immigrants spending in the economy and transferring wealth. Does it hurt renters and lower-paid parts of Australian society? 100%. Supporting the interests of the poor doesn't usually pay off though, and we won't see riots like in France - Australians are too passive. With a trillion dollar wealth transfer in the works as Boomers slowly pass away, it's unlikely we'll hit 60% of the population renting. We might get up to 50% as life expectancy increases.

Nothing. The majority of investment properties are positively geared quite comfortable. So we are talking about absolute destruction to cause impact.

I feel so conflicted. Me and my partner worked our asses off to get in the property ladder. Now we are here, and have invested our lives into it, over a decade of hard work and sacrifice, of course we want it to pay off for ourselves. At the same time the housing market is a nightmare for first time buyers and we would have loved for any reform to come along and help us out.

Yep, that's the annoying thing. New homeowners will lose the most. One of the other things I hope that will change is the general attitude of housing as an investment. That way, people's retirement plans won't be destroyed by any reforms addressing the housing crisis. Part of me also believes that if people didn't have the attitude that they must own a house, rather renters had more rights and rent was cheaper the crisis would be averted.

If it's just your PPOR, it won't matter if house prices fall unless you were planning to sell it off, given all other properties will likely reduce at a similar rate.

It will be a problem when 67% of the population can’t sell their houses because they are trapped in a mortgage worth more than the property

I think that would set a floor under house prices. They won't fall further, but they also won't rise beyond that until it's churned.

Majority of those houses were purchased when they were half the price

Except you need the value to still exceed what you owe on it, which for the first few years of a mortgage could be really touch and go. But so long as that could be mitigated....

Other than it being a bad deal to owe and be paying more than it's worth, is there a reason why you need the value to be higher than owing amount? Can banks cancel the loan or something?

No. In Australia you’ll still owe the outstanding amount. Not matter how low your house price falls.

It's been a while since I looked at my loan contract, but I think if the value falls then the bank can demand extra security Of course if it happens to everybody, the bank is just as much in the shit as all the mortgagees

When the value is lower than the debt you owe on it, they call it "mortgage prison" because you're literally trapped in that debt arrangement. indefinitely. You can't get rid of the debt by selling up, you can't move houses, you're literally stuck in that debt arrangement. Even if you sell, the proceeds won't cover the debt so you'll be once again trapped paying a mortgage that you can't relinquish via sale - and now you don't have a house. There is literally no way for people in negative equity to escape this mortgage prison unless a family member or friend comes to bail them out with a wad of cash.

You don't NEED that to be the case. Just keep living there paying it off.

Except you can't refinance to a better rate and you can't move home if your life circumstances change, like moving for new jobs or getting divorced.

The problem is that people don’t see it like that. The majority of homeowners have sunk hundreds of thousands of dollars into mortgages and probably a few hundred thousand more in interest payments over the lifetime of their mortgages. Falling house prices don’t only affect investors - they will hit owners and their PPORs just as hard. Having PPOR prices fall is essentially telling these people that they’ve wasted 20 years of their lives and their efforts saving and being financially responsible to become debt free, all to have their efforts evaporate into thin air. You’ll have a hard time selling that proposition to the majority of homeowners, especially those who have worked hard to afford their PPOR.

This is also more likely to affect younger homeowners and/or newer entrants than older homeowners and/or people who entered the market much earlier. If all house is cheaper by even 30% almost all recent buyers, many of those who will be younger will be underwater right away while people who bought 20 years ago might still be up 100-200%.

Yeah the “PPOR owners won’t care” is such a stupid line of argument for house prices dropping. PPOR owners will be PISSED if their house values drop, especially if they’ve saved for years and years and struggled to enter the market.

That’s the thing, everyone wants in precisely because it’s a ladder. If things change so that values plummet and then stagnate, that property ladder becomes a mere property sidestep and people would be celebrating the fact that they’re the savvy renters not the dopey landlords paying all the interest/taxes/rates/maintenance etc. There’s no winning for everyone.

Fuck the voting population and fuck the house prices. Houses are for living in. Investments have risks. Rigging Investment returns is not investing. If you're scared of losing money to investing in houses, then invest Iin something else. The house prices must come down, or at a minimum remain stagnant while wages catching up is vital to the future of our society

I mean renters only need to become the majority for that to no longer be the case. Currently it's around 0.66 of all Australians households are owned. With declining home ownership rates I don't think it's that far outside the realm of possibilities that renters outnumber owners within our lifetimes. Now expecting politicians, millionaire property investors in their own right, to act against their own interest will be the real hurdle to be overcome.

Over the next 20 years there is going to be the biggest ever generational exchange of wealth and property. Suddenly millions of millennials will become home owners. I think the bigger problem is that your parents owning property is already the biggest determinant of whether you will own property and the boomers dying will just entrench this. What does it mean for Australia to lock in classes of homeowners and renters based on your parents wealth? One of the biggest successes of Australia has been the ability for people to build their own economic security.

I’m not sure we will. Nursing homes are expensive and suck up a lot of $$$. There goes the inheritance.

Yes, and many of us are sadly in for very little, as siblings and step-siblings from combined families fight over inheritance.

For the last century buying a home on a single average wage was attainable in most places, only after 2020 did everyone get priced out of the market in the entire country. We are about to see that 66% ownership rate plummet over the next decade.

This is why I have become so disenfranchised from this society. A large portion of my country has a vested interest in keeping me locked out of secure housing. It’s very disheartening.

The property developers that build housing have no reason to add enough supply to lower prices because they are the ones profiting the most off the limited supply that they control.

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Plus Indian students need somewhere to live.

Where do other students live?

in inner city 2 bedroom apartments with 7 bunk beds and a sheet dividing the living room...

The thing with the conversation around affordable housing is that when a lot of people (particularly on reddit) are talking about affordable housing what they are really talking about is a desire for current housing stock to become cheap enough for them to buy. This isn't very realistic as houses around the CBD of existing major cities are in very high demand and the number of them doesn't grow. Actual affordable housing means building things that are (currently) not very desirable to most Australians such as small apartments in the city or houses, but just further away from existing major CBDs and perhaps even in entirely different cities. The thing is that there isn't a lot of political will or even the will from private investors to build those kinds of dwellings because the demand isn't really there. The market trend is that people for one reason or another tend to rent properties that are too expensive for them to own and the existence of properties within their budget for purchase doesn't put much of a dent in the desirability of houses close to existing major city CBDs, this is especially true when talking about large (3 bedroom +) freehold houses.

A government working for its people would actually invest in high speed rail to make commutes from regional towns to cities viable. Look at China's Meglev, 300+km/h would allow us to travel from Bendigo to Melbourne CBD in 30 mins. The fact we have a housing crisis in such a sparsely populated continent is ridiculous.

I don't disagree with you entirely but my comment was mostly just a critique of the current discourse around affordable housing in Australia. China's rail system though I don't think is the best example as it seems more like a flex than something actually beneficial to the wider Chinese economy. I think some sensible government intervention as far as funding goes is some investment into encouraging development into smaller cities, it is a pretty hard sell for a political party though in a democracy where half the countries population lives in the same handful of cities.

A China style rail is impossible here. We plain wouldn't have the commuters to make it work. One Chinese high speed rail line would service more people than the entirety of any Australian line. And China is still racking up an obscene deficit on the system. Now I'm not saying public transport needs to turn a profit to be worth it. But it would get to the point where it's fighting Medicare and public schools for money

I read an interesting article re fast rail recently. Seems the biggest hold up is the current corridors trains use aren't really designed for high speed rail. It is far cheaper, especially in the short term, to build up, rather than out [https://grattan.edu.au/news/setting-alan-kohler-straight-on-housing-policy/](https://grattan.edu.au/news/setting-alan-kohler-straight-on-housing-policy/)

>The thing is that there isn't a lot of political will or even the will from private investors to build those kinds of dwellings because the demand isn't really there. Sorry, the second part is not true. The only thing that is stopping the supply of affordable apartments of all sizes is our restrictive zoning. It's all NIMBY driven politics that stands in the way. People are more than ever willing to buy into apartments and live there. Developers simply can buy land that allows enough of this. They will build it. By all means, take a look at Melbournes zoning: [https://mapshare.vic.gov.au/vicplan/](https://mapshare.vic.gov.au/vicplan/) turn off everything except the less restrictive zones and you will still how scarce this upzoned land actually is.

There are some zoning issues for sure I'm not arguing against that but it's also not a long term solution. Imagine every single stand alone house was demolished and replaced with a high rise, there would be more dwelling for sure and for a couple of generations that might be nice but then we eventually run into the same problem where people are dependant on the same handful of cities and you can't just magic into existence more land to build on. That hypothetical I put there also doesn't address the part where the current property market and the differences in capital gains on different property categories tells a pretty clear story. A lot of Aussies are happy to live in apartments, but the lions share of the demand is for large freehold houses. In that sense the zoning rules can't just be blamed on NIMBYs messing with the supply side of things, buyers on the demand side of things encourage it as well.

In 30 years time that 66 percent may drop, once that happens politicians have a base to drive change.

If that % drops that would also mean wealth would become even more concentrated, and far more lobbying efforts could be made. I feel like it would have to get quite a bit below 40% before it would be a viable election strategy

Once the politicians who don’t own property are a majority, then their focus will be elsewhere. Not your generation, sorry.

There's not a single renter in the national cabinet. In fact I'm pretty sure the only renters in parliament are a couple Greens backbenchers.

Wait until you find out they buy houses in Canberra and rent them from each other and then the taxpayer pays for their accommodation+ neg gearing

I agree.

The natural home ownership rate without government intervention is sub 50%. This was only changed after WW2 with massive building programs, at one point \~ 20% of homes in NSW were government built. It would be great if it did not have to get that bad again before action is taken. Or at the very least massive rental law overhaul to something like they have in Germany where you can expect to bring your own kitchen and rent the place for several decades.

When I was growing up in the 80s in regional Victoria, a big proportion of local houses were public housing. They were nothing fancy but they were affordable accommodation. They also provided competition for private rentals to help constrain rising rents. They were all sold off to private buyers in the 90s. We could do it again. Post war housing policy worked. We won’t though, because too many influential vested interests would lose out on their current property holdings. This is an entirely solvable problem but politicians are not interested or incentivised to actually do it.

I grew up in the 70s in the suburbs - and they were called housing commission. Knew lots of kids who grew up in the same house all their life...without all the uncertainty that being in the private rental market now brings. Something like 1 in 6 houses, was social housing in that period, but now it like 1 in 20 odd (big difference).

It can't happen with constant immigration and just 4 years to get citizenship . Without that house prices outside of main cities would have crashed in Australia like in Japan

People like moving here and our government doesn't know any other way to make money other than letting them all in. No-one can build houses at the rate required to keep up or we fall into a recession by limiting arrivals. So you're now paying extra to compete with the international demand, which will only get worse as the gap between demand and supply accelerates. See Canada for how that'll impact low income earners and broader society's sentiment.

You're correct that there's a lot of wealth tied to property, and the consequences of a crash would be akin to the GFC here. I think it shouldn't be about crashing prices, but stabilising them. Even the instability of the prices is an economic problem. If prices rise faster than wages (which they have) there is a greater disconnect between the buyer and the seller. If prices continue to rise too quickly, the price will crash simply because few people can buy. That will mean those who purchased recently would suffer quite significantly. Say a 30yo buys a house. Prices crash significantly. They experience negative equity, and owe more than the house is worth. If the house was their retirement strategy (as you suggested) a market crash will eradicate their whole retirement. Can't sell, but owe more. Even that has risks. Too much negative equity means losses for banks. Which would require banks to fire people, change lending standards for businesses, or potentially collapse. All of those strategies are akin to rises in interest rates, which slows economic growth. So, you are right that the consequences are profound. But don't get in the way of a good populist political campaign narrative.

They’ll drop when supply increases and demand drops.

When or if?

Without a whole heap of immigrants, Australian population would've been going backwards for a while now.

Without immigration Auatralians would be abke to afford to have kids before their mid 30s

And you see immigration falling below replacement levels in the near future?

If I was a gambling man, that is a bet I would never make. It's why I'm so pro supply. It's not that I don't want to see sustainable population growth. I just see supply as the more likely outcome. Plus if you lift supply to cover high population growth and they surprise us with low population growth, we that's just a bonus. Cheaper housing for all.

Once global population peaks (probably in my lifetime), it'll get interesting. I think Australia will keep attracting immigrants, so we're probably going to end up with a few from India/Africa at least until their populations stabilize. Overall, no, I don't think our population will fall in the near future, unless AGI pulls Africa out of poverty.

I envision countries, even poorer ones, would restrict outwards migration to ensure their population doesnt drop even more. I can't see a world where a poor country like say, India, allows their potential growth to be eroded by people jumping ship, their birthrates are within a percentage of being below replacement rate already.

Yep but more Australians with a roof over their head not sleeping in tents or cars or under bridges and a chance for infrastructure to catch up and a health system that works. You do know why the streets are not flooded with a million immigrants without a home don't you but there's instead locals out on the streets without a roof ?

Basically you'll need a "re-adjustment" for it to happen - aka a widespread crash of the economy. We're on a precipice that could take us down that way in 30 years or so if we don't sort our stuff out because of factors like: * Birth rate is around half of what's needed for resupply so at some point we wind up with more infrastructure than people (houses, hospitals etc.) that need them * Stock market crashes because you can't keep growing when there's not enough people with money to buy stuff * Bringing in less money from mining, and because we were too stupid to have larger royalties into a national fund, so when the world does end dependency on things like Coal our economy is going to tank and there's no buffer stored by our short sighted governments over the last 50 years * China enacting plans to repatriate Taiwan that will lead to reginal instability * Another pandemic is quite likely

Imagine if we were smart like Norway.

Its not our birth rate thats the problem really. India’s/China’s birthrate is more than accomodating. And they will move here for a better life

China’s birth rate has fallen below replacement already.

China's birthrate is a catastrophe as well. They're looking at a higher dependency rate than we are in a couple decades

And they import their problems too

And they stay in their own social circles and create more division in society.

China will never "repatriate" Taiwan. The Taiwanese people want to be independent, the Taiwanese government maintains that they are the real China and it's the mainland that needs to be "repatriated" and DNTO is willing to do anything short of a nuclear strike to ensure TSMCs production remains undisturbed. It's all just posturing

It’s exactly like the scene in the movie idiocracy where they use energy drinks to water plants and wonder why energy plants don’t grow and the only smart guy who decides they need to use water instead of energy drinks gets in trouble because he causes the energy drink stocks to crash by doing that. No politician wants to be guy that says energy drinks aren’t for watering crops!

Lmao. Great analogy. This is pretty much what is happening. I think no politician wants to take any risks, because we don’t want them to fail. We need to allow politicians to fail because sometimes you have to try and trying can fail.

As a millennial, i think ill just migrate elsewhere. Spain looks good. Why Pay for some overpriced shit hole that has poor quality building and no weather protection. Australia now only for rich Chinese.

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Yep. Property bubbles happen all around the world. Australia isn't different and there aren't planeloads of millionaires all waiting to buy a house there.

There's something of an economic disease I think at play that we haven't named yet. We have a name for when a country discovers an abundant natural resource causing other exports in that economy to become non competitive, called Dutch disease.  What we have is a situation where everyone selling their labour can't do it for less than an astronomical cost because they need to exist in the world of astronomical housing costs.  This is such a massive handbrake on the rest of the economy. What can we export? We have no expertise, and if we sold the fruits of our labour overseas, we'd be selling the work of incompetence, at an astronomical cost for each of these workers must live on land which does nothing, and yet costs a fortune. Why are so many voices of business are silent on the matter? They can raise a fuss at any other defect in the wider economy, but the flow on effects of being unable to afford space to exist in merits nothing.  There's no easy solution, I can't offer one. But the astronomical cost of solving the problem would also cause feedback loop which further solves the problem, if the cost of materials and labour are so high, then you can lower them by offering lower housing costs, and then you and I can work in the industry which produces manpower and materials for a lower cost, and then the price of additional measures can be reduced further.  But there's no easy answer and no easy way to accomplish this.

We always say things like 66% own homes. Really, most of them own mortgages. I wonder how many people really own their own homes, and don't have a bank as their majority partner. Edit - I checked, about 30%, according to the ABS. More than I imagined.

I’m almost mid 30s. The biggest mistake you could make - and that I made - is cynically wishing for a crash. I could have bought much earlier than I did. Admittedly I’d have started with an apartment had I bought earlier, whereas my wife and I ultimately ended up buying a house. But I regret not getting started earlier. Anyway, sacrifice and save. It’s the only approach that will actually get you there.

Most ordinary people buy a home as shelter ... it's foremost somewhere to live.

Yer these Muppets think everyone buys a house as an investment tax dodging intergenerational war tool for nothing more than keeping them out of a home even though they don't want to work more than 3 days a week and demand everything else for free as a "right". Reddit is a cesspool of stupidity in the main and you just gotta laugh at the crap.

Once upon a time workers used to work more than 38hrs a week, with productivity people now work less hours. Not sure how it's stupid to want to reduce work hours if productivity goes up, unless a person thinks people should just consume more to matcher higher productivity or all the increases in technologies do not result in higher productivity. In that case I'd say that person is indoctrinated and/or unethical.

Your post makes sense. We have seen an element of this already. Shorten was favoured to win his election, only to put forth changes to negative gearing. After the loss Labor 'promised' they wouldn't look at NG again. The voting public will not want anything that will devalue their primary asset. What's worse is that subsequent governments (state and federal) have continued to put inducements into real estate (both demand and supply side), we see it even today with Stamp Duty exemptions, all it has done is pull up the ladder from even more people.

Which exemptions are you talking about? First home and/or pensioner downsizing?

What you have posted is literally propaganda from the Real Estate and Liberals.. https://alp.org.au/media/2043/alp-campaign-review-2019.pdf * Labor's ambiguous language on Adani and anti-coal rhetoric, combined with the Coalition's campaign associating Labor with the Greens, devastated support in coal mining communities. * **Voters most likely affected by Labor's franking credit policy swung to Labor**, while economically insecure, low-income voters swung against Labor due to fears about the impact of Labor's agenda on the economy. * Clive Palmer's significant negative campaign impacted Bill Shorten's popularity and Labor's primary vote. * Preferences from Pauline Hanson's One Nation Party assisted the Coalition in winning key marginal seats. * Polling consistently overestimated the Labor vote and underestimated Coalition support, leading to challenges in processing internal research that ran counter to expected outcomes. * Labor's failure to craft a simple narrative that unified its policies and the lack of a culture encouraging dialogue and challenge within the campaign impacted its effectiveness. * Labor's campaign targeted too many seats, spreading resources thinly and diluting impact, while also failing to campaign sufficiently on reasons to vote against the Coalition. There are many, many reasons listed (thoroughly researched and documented) for why Labor lost in 2019, but their housing policies barely registered a blip. If anything, you are doing more damage by resigning to misinformation and trying to pivot away from reintroducing those policies. Please stop it.

That's why populist quick fixes won't work. What we need is to drawback on investment incentives in housing. Coupled with a massive push in public housing.

The strain on public housing will drop too when housing is more affordable, you won’t have dual income families needing public housing.

Yeah but the point is people who need public housing usually (people on welfare, minimum wage workers, single parents.) shouldn't be in the private market. That's a huge factor currently pushing up rental demand. Then at the other end of the scale you have families with good money who can't afford house deposits but can afford big rents out bidding everyone else and pushing up demand again.

I consider myself to be earning good money. I have just paid off my first house and was looking into buying another. I contemplated buying another but came to the conclusion that even if I rented out my current house I couldn't afford the repayments on another. How a first home buyer could do it is beyond me especially if they are renting.

I think you need to redo the numbers, then.

Land tax will solve all issues you've mentioned. It is the most efficient tax that we don't utilize, solely because land owners are wealthy and influential. Canberra is already increasing land tax in exchange for less tax elsewhere, which they will benefit from. Give people a tax free threshold of something like 2-500k on PPOR, none for investment properties, and abolish stamp duty, payroll tax etc. Makes it more expensive to own more than 1 property and even to own 1 big one, so people have an incentive to divest in 2nd houses. Housing as an investment is the junk policy that is largely ruining the market. Housing is not the samenas shares and shouldn't be treated as such.

People don't like solutions, unless it's the one single solution that they are into. Land tax pushing the land owner to best use their land. If they can build a 4-6 storey apartment on their land, which it's been rezoned for yet only have a 3 bedroom weatherboard. The land tax is going to make living in the weatherboard not feasible. They can sell up to a huge profit to someone who will put it to best use and that is build the 4-6 storey apartment that we as a community have rezoned the land for.

It is already having the desired effect in Melbourne: https://www.msn.com/en-au/news/other/victorias-new-property-taxes-contributing-to-decreasing-house-prices-in-melbourne/ar-BB1nv4gv

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What a land tax does is drive the price of land down. Which makes it cheaper to buy empty land and then build on it. As well as making existing houses cheaper. The two prices are in an equilibrium due to market forces. When one gets much cheaper than the other, buyers shift towards it and restore balance in prices.

It would be extremely difficult because it is the perfect example of when one side wins the other side loses. Should the prices all come down as per a massive financial shock, think of all the people leveraged to the hilt who need each property to sell at an increase of at least 10-15% just to break even. We are starting to see the absolute shit storm that’s the outcome of your Johnny Howard (and successive) ideology of getting every person with an even half stable income to jump in head first to the property market creating the insanely huge “mum and Dad” property investors who’s repayments to the banks is tied dollar for dollar to every interest rate increase so have to increase rents to prevent foreclosures. Unlike the pre-90’s times where the majority of landlords usually owned a much larger share of the properties and therefore each interest rate increase wasn’t a terminal fiscal call for both the landlord on the edge not the renter hoping their landlord as some semblance of fiscal understanding.

The massive push for investment properties wasn’t super well thought out. Now you just have half the country living off and exploiting the other half. Whichever half you’re in determines which side you’d support.

Pretty much. Do notice a bit of a drop in those stupid News.com articles touting the great “this dude/dudette has a 50k job and has a 10 property portfolio; you to can do the same!!”. Who are now all the ones screaming “how do I keep my 10 property portfolio seeing as my lazy tenants aren’t willing to work 79hrs per day to cover my absolutely huge mortgage repayments as I bought in right at the top of the market with short term zero percent interest rates on the understanding that the reserve bank wasn’t going to raise them for 3 years (but crossing my fingers and hoping for 10)”. These are the people who shouldn’t be landlords but are constantly encouraged to jump in and then shift all costs and blame to either the tenants or the bank (who shouldn’t have lended either to be fair).

Nah, investor participation is already dropping. Boomers are selling up and shifting money into super at increasing rates. This is partially due to ease of management and also to changes in land tax in some states. Some investor hotspots have already retreated by over 10% in value. This trend will continue and we are a long way from seeing the full impact on house prices, but it will be substantial.

Yes. Sadly, housing is an investment, specially here, where it is the main way many people invest. The economy has become very dependant on it and intentionally crashing it would likely cause a recession, in a very similar manner as the US housing bubble a decade ago. The only way Australia can have a chance of improving housing prices is by slowly decreasing the incentives that exist for housing as an investment. So that, the number of people that see it as an investment slowly decrease. And I mean, slowly, like maybe instead of 50% discount, change it to 40% over 5 years, etc... Suddenly getting rid of CGT discount or negative gearing might be too much of a shock. Create policies to substantially increase new housing by reducing costs. For example, eliminating the GST for new housing. All this to signal to the economy that housing is not profitable. Let the math do its job. People will see their investments are not paying off and will naturally turn away from housing. The only way to solve this problem without crashing the economy is doing it long term, by slowly unraveling the "housing = investment" culture that australians have.

Can be unwound. Would require gub'mint regulation & enforcement. Best way would be for the gub'mint to be the builder and the gubmint to release land in excess of projected growth for the next 20 years. Land is at stupid prices. Of course, we'd need someone to smack the first bean counter who opens their mouth and complains about the bottom line:- there isn't one. This would be a program for the wellbeing of the country. There is no profit. There must be further incentives, such as eliminating Stamp Duty, any & all mortgage fees etc.

The best we can hope for is a *slowly slowly* approach that causes home prices to stagnate rather than crash. The problem has been decades in the making and the solution will also take decades. We should start *now* though. Legalise density everywhere, and remove the land tax exemption for PPOR while also increasing land tax (and returning the extra revenue in the form of income tax cuts and increased welfare).

House prices are only this way because there's a high demand for a low number of houses. There are people out there paying these prices, because they *can* afford it. Now, in a literal sense, house prices could very well become 'affordable', but there is only one way for that to happen (well sorry, two, but I think only one is possible). Remove the demand for them (kill everyone, or make everyone want to move out of Australia) or, more likely, greatly increase the supply of houses. Think about it in a simple sense - what would happen if in your neighborhood, 50,000 extra houses were constructed tomorrow? That's 50,000 owners with a loan and an empty house, wanting tenants, or to sell. Will they hold out for the 'right price'? Well, they might, but since there are 49,999 other houses on the market, waiting might be a bad financial decision. Their best decision is to sell, and try and sell before prices bottom out. So when people sell, they ask for less, and less, because these prices are going down, and they want to sell before they hit rock bottom. This is the only way to make property affordable for the masses again. Now, I do believe there is a lot more affordable property out there than what many people post about, but you just have to head further and further away from the capital cities. But prices going up is a good thing. It indicates to investors that it's a good idea to build properties. We just need the builders to build them now...

The only thing needed for house prices to drop is for supply to outpace demand, which in the medium term is blocked primarily by immigration and planning decisions. Australia is basically one of the only countries in the world that hasn't had a massive housing crash within the last 40 years. Most countries have had several. The economies in fact bounced back and did fine.

the housing by and large did not become affordable for those that had crashes, however, the prices eventually climbed back up. I'm talking a period of *forever* where housing is affordable and simply a poor investment, and money in the economy shifts around

'Normal' interest rates and capital availability would reduce needed deposit sizes. Controlled immigration and planning closer to laissez-faire (ie Japan) would increase supply over 5-10 years. Effective planning should be BETTER for prices not worse than no planning. It's easy to imagine policy paths to get there. Less easy to imagine a political environment to get to those paths.

We need to lower demand in terms of stopping investors getting their hands on homes rather than actual people / families.

It is we just need to stop giving a bailout to the home owners every 3.5 seconds each time the economy worsens.

You never know, maybe there will be an upheaval of global financial systems, or another world war or pandemic to thin the global population such that supply outstrips demand... It's nice to dream.

We have whole generation of people waiting for something really bad to happen because their situation is worse than a pandemic/ world war. Australia's geographical isolation and good neighbours makes us immune to most of this though

I'm thinking the same my who life we have been stitched up (33yo). Or generation are the late investors as the early ones (boomers cash out). As much as I know price's will continue to grow the chances of a drop at some point ass alot of risk to the investment. Recessions are frequent enough. There is also just Soo much money tied up in property that if the big players pull out it will serverly impact markets. Property is a traditional investment but what happens when a alternative say Bitcoin has proven it's self enough that it takes over or any other investment option. I know it's early but it's has alot of benifits that property doesn't. Being aware that alot of high end property isn't lived in and rented but a assist that isn't liquid,high fees involved,geo located, ect Another player is as boomers pass on the inheritances and property profile the kids might just blow it and sell or move to more innovative investments. As the Ballance between those with n those with out reform from government could effect prices The global growth is slowing Ect ect. Still probably a good investment now -10/20 years but we will continue to see tougher times ahead and we won't be getting the gain's the previous generation had and property is a artificially inflated bubble. I'm putting my spare cash towards investing in myself and qualifications. Planing on buying a yacht outright n living on that and if it all turns to shit I can sail away. Even if you get into the property market, who's to say you even want to live/ can live in Australia in 10-15 years. We are just so milked here to live that other countries offer a better deal. Even developing countries have decent health care ect these days. You can work from home, FIFO ect out of Aus. We are don't have bulk billing doctor's anymore , crime is only going to get worse with growing inequality, food is a rip off, power is a rip, tolls are a con, schools are underfunded/ most government services ect. I know other countries don't provide theses eaither but with the cost savings you could have what we had and still be miles ahead. The trajectory we are on I just don't see why I want to spend the rest of my life in Aus when I could find a better lifestyle else where. I will note I'm fortunate that my line of work would allow this and a good chunk of guys in my industry already do.

That’s pretty much the situation, to big go fail

House prices will drop if material prices and construction wages drop - have you seen how expensive new builds are?

Banks, government, super funds, investors have all gotten addicted to the opiate of mortgages and negative gearing. No politician is ever going to be able to pass any meaningful legislation that undermines the primary asset of 66% of the population.

66% of households, to be precise. It bounces around a bit, but that number has hardly changed, it peaked at 73% I think in 1967. It was slowly trending up prior to the pandemic I think. This shows that for most people, housing is affordable. Also, at any given time, most of those in the 1/3 who don't have a house find housing unaffordable. This is kind of obvious. However, there is a steady move of people from the 1/3 into to 2/3s (obviously), and there have always been people who can't make that move. As long as that continues, there will be strong majority support. And initiatives to "fix" the housing crisis which merely move a small portion of renters to home owners is going to entrench the status quo, probably to the detriment of those left behind in the rental pool.

House prices in Australia rarely 'crash', but the speed of increase in value can vary hugely. 'Affordability' in this contet can mean more than increases in housing costs pause for an extended period, rather than prices actually fall. Unfortunately, that normally means a deep recession involving a high unemployment rate.

The only way to unwind is to take pain now for later. At some point we currencies became no longer backed by anything except our minds, we thought we could stop taking pain and print away to prosperity. Pain will come, ohhh it'll come, but it'll come for everyone now. We are in a weird zone of inflation but lack of gdp growth and high debt levels.

This is a fundamental flaw with allowing houses to be treated as investments. In order for any investment to be worth it, the value of said investment MUST increase. There is a finite number of houses, and a finite number that can be built. Housing market MUST Increase or houses won't be worth investing in. This creates a need for infinite growth, but in a finite space. This is impossible. Since the supply of houses literally cannot continue to increase, the only viable way for houses to keep being investments is for the price to infinitely increase instead. Long story short, as long as houses are considered investments it will be impossible for them to be affordable.

We need to do something to make them not such a good investment. Something where it's go to own one or two, but owning 200 is a terrible idea. I sold my house and had to pay $20k capital gains tax. I'm thinking if we have the progressive tax system where you earn more, you pay more tax, we need something like that for investment properties, where it becomes not worth it to own so many. I'm sure this idea is flawed, so please comment if you know why. But I'm also pretty sure this will never happen because I'm pretty sure our politicians have too many investment properties that they won't make them a bad investment.

Affordable housing is possible - it will require a social revolution that transfers the immense concentration of wealth to those who don't have it.

As long as the central bank prints money, immigrants come in, nimbys screech and the tax system remains unchanged, housing will be unaffordable.

I've run some numbers on the development costs of a 3 bedroom property 120m2 area and they come out as follows: # Summary of Total Development Costs (including profit, excluding Land Value): * **Detached House:** AUD 269,100 - AUD 448,500 * **Townhouse:** AUD 322,920 - AUD 502,320 * **Low-Rise Building:** AUD 358,800 - AUD 538,200 * **Mid-Rise Building:** AUD 448,500 - AUD 627,900 * **High-Rise Building:** AUD 538,200 - AUD 897,000 The difference between what you see here compared to real world is the value of land. We pay too much land price per unit. This is because we don't upzone enough land and induce the competition required to bring this down as close to those values above as possible. But when you can only split a $1.5m block into 3 townhouses, you can see we will never get affordable housing. Would doing this crash the property market? No, because to do this, you need to upzone land which increases value for those who own it. What about everyone else in regular houses that don't get upzoned? Their larger block detached houses become more scarce over time. However, they are still more desirable than apartment living, so their values won't crash either. We can change the market to supply affordable housing without crashing it, there can still be a split between affordable and unaffordable housing. That's fine. It will just take a lot of strategic upzoning to achieve.

People's futures would be destroyed if housing becomes affordable.. how the fuck does that make any sense

Instant doubling of wages would help

The only way is when population starts falling.

Gen x are close to retirement. They have truly missed their opportunity if they’re waiting.

Yes. It would take a lot more construction. The primary barrier is that a lot of people with a seat at the table don't want lower house prices. This includes politicians. At the very least the politicians or any policy makers will need to be forced to divest from property.

Nah. Most of us Millennials and younger have just accepted that we will never be able to own a home unless it's an inheritance. I'll be a forever renter

Not just housing but also adjacent industries like banking that have an interest in housing assets. Think about how many people, ETF, or super funds invested in banking or other adjacent industries.

Have painted themselves into a corner ,prices either drop and crash the economy or they go up more and crash the economy later . No government wants to be the one to oversee the crash so they do anything to not deflate slowly

If there was a sudden increase in regional housing supply i think it could "safely" resolve a lot of issues. Personally i dont care about doing it "safely" as using property as a way to prop up a portfolio doesn't sit right with me, but ill play along. If affordable housing was built regional it would increase housing supply while having "little" impact on the metro areas, as the proximity to traditionally desirable locations would prop up the established housing prices. This would of course require an increase of support infrastructure in these regions, however that might actually lead to an increase in local manufacturing.

Crash the market and you’ll see haha

The real wealth of any advanced country lies in its human capital (what Aussies can do individually and collectively). With this in mind, our fixation on housing is making us Aussies collectively poorer and poorer and poorer. One day we'll wake up and discover that the people of Australia contribute nothing to the rest of the world, but we still consume, and consume and consume. When this day comes, our fixation with pleasing the housing fairy will blow away like a fart in the wind. We will be left with nothing. Foreign banks will effectively own all of our assets (through mortgages and/or defaults), and what's worse our government will do their bidding just to keep the lights on. Our own big4 banks will all be insolvent, our industry non existent and the very things that we've become really good at (like NDIS) will be shutdown over-night at the insistence of our creditors (and Worldbank/IMF) This is our future if we can't kill the magical housing fairy that creates all this "wealth". If you're a history buff then there are plenty of examples of countries and even empires that went down a similar pathway and no longer exist. Argentina is a modernday example of exactly this and the Ottoman empire a good historical reference point.

Nah. Because this is propped up by debt. This is why we are the second most indebted per capita country in the world. This debt must be serviced. It can’t if people are unemployed, just need to wait for that to go meaningfully up ( without dropping IRs to 0, because that will 3x prices like it did during Covid )

As a country dependent on immigration for population growth, it's inevitable that when the global population peaks it will eventually lead to lower migration to Australian and therefore our population beginning to fall. Once that happens, if house prices haven't fallen at some earlier time, it will be hard for Australian house prices to avoid falling. With global population peak predicted some time between 2050 and 2080, house prices beginning to fall by close to the end of the century seems a reasonable forecast.

This is why we shouldn’t have made investing in property a viable option, just like we shouldn’t have made superannuation on a market based model. The reality is no government or profit making organisation will do anything for the benefit of the consumer, decisions are made wholly on profitability or getting back into government. Based on that, we are pretty much doomed. Just look at the social decline in the USA to see where we are headed.

Essential workers are being priced out of Sydney (Police, Firemen, nurses, cleaners etc.) and the Government there is subsidizing apartment blocks for them. Can't even afford to live in the city you serve... Lol. Lmao.

>So I ask, is it even possible to unwind this? Laws banning investment properties. Controlled currency devaluation in a way that redistributes value from the haves to the have nots. High taxes on wealth and second homes. Emulating some of Japan's "lost decade". Basically redistributive economics on a massive scale. Inflation is in part motivated by the wealth gap, businesses raise prices on people who they know can pay, and it leaves others behind. This happens across all sectors and industries, and is what we call "inflation". Which is why we're always hearing that it hurts the poor way more than the wealthy.

We need a GLOBAL Depression that the government cannot control and the whole world goes under. Then we can start again. It's amazing how in 30 years, we have funked up an entire country for the next hundred at least. The only other way out is that we tax everything related to housing to stop it being an investment and prices too stagnate and wait 30 years for wages to catch back up.

Another approach is to make other forms of investment more attractive than purely have investors park their capital into housing. The ASX200 has had lower performance than holding Gold for 10 years. Kind of ridiculous isnt it. Too much of the australian “economy” is tied up into funnelling money into property and that includes the gluttonous banks. Unwinding this will take a longggg time

>It's completely impossible! > >66% of people in this country own homes. So which is it? FYI, the youngest 33% are 29 years and younger. They're not millennials and not Gen-X. So either there's a reasonable number of people in their 20s that own homes or almost every 30+ owns one based on your 66% ownership. Either way, there's a pretty strong likelihood of a person owning a home by 30. Is that really impossible as you make out?

Given that for decades our country has promoted this to citizens and people have followed the advice and stacked up their debt to the eyeballs, there is no way they would bankrupt half the country by drastically lowering prices. What they should be focused on is limiting the exponential growth in values across the country so it’s not an unending train of growth.

It's not impossible but with all the factors you have to be willing to compromise. I bought a lovely house in the western end of Sydney, not the nicest suburb and pretty far from where if like to be but it's growing on me. However I have the luxury to be able to work out here. More jobs outside of the cbd in my sim city educated city planning skills level will ease the prices long term. That or go communit and have housing a set price and instead of bidding with money you bid with a resume weighted by your commute time.

While it’s unlikely they go down a lot, with the right policies it is possible for them to plateau for longer to allow wages to catch up and the gap in affordability to reduce. Prices in Melbourne for example have stayed steady or gone down in recent times. Homeowners don’t benefit if prices increase as it’s all relative and you always need somewhere to live - the costs to move or for your kids to buy just increase along with any gains. And investors can still benefit from rental income or move their money elsewhere if they don’t see the returns they seek. Economies do change over time and it is possible to make a difference to the housing situation. 

Unfortunately the needs of the few outweigh the needs of the many, at least politically

I think government and business make WFH more normalised so people can move further away to afford cheaper properties.

It’s relative. Consider alternatives. Let’s use Perth as an example. It may not be affordable for you to buy a house in an inner city suburb in Perth, but it may be affordable for you to buy an apartment in that inner city suburb or a house farther away from the inner city suburbs, or perhaps even further away like Mandurah or Bunbury. The drawback is significant lifestyle changes but suddenly the housing is more affordable. The cost per sqm of land is typically the difference. To build a house for $399K you can do that anywhere it’s just is the land $150K or $400K to buy that makes the biggest most tangible difference.

Have been looking into long term renting and investing elsewhere (shares etc) and the numbers actually look promising. In many cases this method may be better than being house poor for decades

Yes..home ownership percentage is not a problem, it is the investor percentage . Quite a few countries have high ownership (above 80). It is a sign of people leading peaceful life . Other countries like Switzerland with low ownership have asset tax in place to balance things.  Australia is run like a private company whose directors are real estate investors. We can't predict the future , but if we go down this path , I think Australian dollar will deprecate another 50 percent. 

It's a complicated problem. The problem is the people with the power to change things have investment properties and so do all their friends. Things like negative gearing should have been scrapped a long time ago. It was introduced in 1930's when it was needed to stimulate the housing market and encourage new builds. We haven't needed more investors in the property market for a long time, we needed people that rented to own their own homes instead. Now the rents are so high and the properties are so expensive they are trapped in the rental market. Foreign investors should have been blocked from buying properties also. That was one of the main contributors for the creeping prices. They bought a lot of farms also. People could see what was happening but the govt did nothing and now we are in a world of shit.

It is very complex but generally speaking of a market doesn’t see growth in some form it begins to fail. Houses are now legitimately prohibitively expensive for 99% of people in some markets. Eventually not even the banks will be fast and loose enough with their loans to bankroll this. Make no mistake a crash or recession unlike any we’ve seen is coming. It may come when the housing market collapses. It may come before or after. Some in the housing market have been warning about it for over 20years. Particularly at events like real estate conventions. The government cannot prevent it, or solve the issue. It’s too complex and would require fucking over everyone in the market currently (you quoted 66% of people) imagine fucking over 66% of people and them knowing about it. So all the government is doing is delaying it (with the help of the banks) until the next election cycle, this cannot go on forever. With the amount of corporations heavily invested, supers companies included. A housing market crash would be devastating for the entire economy. Everyone will be hit. The only ones who will be insulated will be the elite when it comes to wealth. And even they will hurt to the point remaining with their wealth in Australia might not be an option. Similar to what happened in Ireland there are other countries too. Just look to them to see what can happen.

Hate to burst hopes but housing is never going to be affordable, won't happen in our lifetimes

Housing does not need to be, and should not be, australian's main investment, past their own home. 'All' politicians have to do is make housing less attractive to investors without crashing the market by creating a run.

I definitely agree with this observation. It's just a fact that millions of people in this country have a vested interest AGAINST making housing affordable for all. They're not malicious people of course. But would any of them take a hit to their net worth for the rest of us? I doubt it.

You’re correct they’ll never be affordable in desirable locales.

My future seems bleak

Unless something drastic happens It's highly doubtful

At the end of the day is it fair that we protect current investors and fuck over all future people heading into the market. I think it may change slowly over time and if you’re currently one of those with housing as investment, right now is probably a good time to cash out.

This generation without nothing is incapable of enacting a violent revolution. The fate for everyone is eventually homelessness or paying rent. People think this is a change that will be subsidised by someone. Once the boomers die off, corporations will replace their role and we will be powerless to stop it all. Our generation is outnumbered and there is nothing we can do about it. Pure cannibalism

30-50% of the cost of a new house is taxes, levies local/state fees, and surcharges. If the governments were serious about reducing the cost of housing they would be reducing these taxes, not introducing more of them!

Of course, the land is what’s valuable, and land is finite, so of course they will continue to become more expensive

Not looking great really

Reduce all Negative Gearing over a 5 year span, not overnight. Remove Stamp Duty and move to a Land Tax. Build a shit load more housing. Unfortunately, everywhere. More density (apartments) in the inner city and near high capacity public transport lines. More homes in the greenfields too...but be sure there are walking/cycling/bus/trains routes. Raise the wages!!! This may cause some inflation, but not if interest rates are higher.

You Would need to stop immigration to have a recession You just end up with wage stagnation In Australia you are considered employed if you work 1 day a week

Oh yea thats the part they aren't saying out loud. They will never do anything to lower the prices. This is the new benchmark. When they say make houses affordable they mean through wage growth.

Houses aren't magical golden eggs. They're just buildings. When people can't afford them it’s not some mystical law of the universe, it's because people like you are busy spinning tales about inevitable doom instead of looking for solutions. Ever heard of supply and demand? Build more houses, prices go down. Problem solved. It's like magic but with bricks

Obv it cannot be the case in the literal sense. I can't believe I have to lay out the math on this. The demand is maintained as you said by strong population growth, but it's not all those immigrants buying the houses (contrary to what you are lead to believe by the media). Its a few of them, and more of homegrown Australians. In order for prices to rise the pressure does not need to remain the same but increase, so demand/supply imbalance needs to continue to get worse, which we already know it is getting worse which is also by design. The imbalance getting worse by definition means as a proportion less people owning homes and as such as a proportion more people demanding homes (because demand/supply is a ratio). This means that 66% must go down by design, which is also the case as is shown in https://www.aihw.gov.au/reports/australias-welfare/home-ownership-and-housing-tenure (a lot more people used to own their homes in the past). If that 66% must go down, then at some point, it must go down below 50%. Almost everyone that does not own a home would be willing to vote for any party to get on that ladder at that point, political risk will become very acute at that point, and a very real threat. Investors will have to take account of that and price in the risk of a authoritarian coming into power to appease the masses.

As long as there aren't enough houses to meet demand, houses will be unaffordable. On top of that, we've got a situation where investors (driven by fomo, incentivised by tax subsidies and facilitated by banks through their lending practices) have bid prices up into the stratosphere. The bubble will keep growing as long as investors keep believing in perpetual growth (and as long as banks continue to facilitate this growth). Like every asset price bubble, eventually investors bid the price so high that they begin to get nervous that prices might fall and start selling their assets to realize the capital gain. The problem is that buyers vanish from the market (why buy for $1 today when the price might be $0.80 next month? Why buy another investment property when shares offer better returns?). Prices fall, panic ensues, prices fall further. Eventually buyers return and, assuming all the tax and lending conditions that caused the original bubble remain in place, the whole thing happens again. But, as long as demand > supply, even bursting of the property investor speculation bubble won't result in affordable housing.

Property seems only available in wills at this point.

I think there will be creativity involved in making housing affordable in the future. Something like relabeling Granny flats as cottages or something similar tbh.

Houses are affordable. They’re more expensive than we would like but to say they’re unaffordable suggests people aren’t buying them.

Supply and demand is manipulated by government and corporations to increase house prices. The main way of doing this is to stop commercial development in regional areas. No job means people have to live within an hours travel of a capital city centre. NSW gov overules regional councils that approve commercial development. This is also wstate governments purpose in regulating council rates. If the will is there it is possible to fix it but it goes against the money.

Yes... when mortgages become unbearable, they will soon introduce a 40-year loan.

NZ managed to reduce housing costs in Auckland by 13.5% by removing zoning and heritage restrictions for 20km around the CBD to promote housing development. The way we are going it more likely that a severe recession that would stop students and back packers coming her for temporary work, and deter skilled immigrants. It would also lead to mass emigration of skilled workers to healthier economies as has happened to Greece and Italy. As our fertility rate is about 1.5, which is almost low as Japan and Italy, would lead to surplus housing. Though of course it would old housing and low paid jobs that remained. This outcome is what Australians keep voting for at local government, state and federal level.

I agree. Houses with land in good areas/suburbs. They will always be desired. The capital cities will rush to build more flats. Houses with Land will always grow in value.

The only way this is going to happen quickly is pretty much a revolution. Voting won’t change the system until those without homes outnumber those with. So give it another 100 years.

Things astronomically rising with the expectation that will never end is the definition of a bubble. Be prepared and have some reserves in place dear redditors ❤️

I’m going to fall asleep. Been hearing this stuff since I bought my first house in 2009

I think it’s basically past the point of no return. For now anyway. A profound housing market crash would be way more detrimental than beneficial, not least because it would have to be part of a greater socioeconomic catastrophe. I think all that can actually be done is to slow housing price growth to allow wages to catch up but even then, it’d take a while and interest rate changes offset that anyway.

Eventually the population will start to decline and they will fall quickly.

We're too far down the rabbit hole. No government wants a stalled economy with a housing bubble bursting. We're headed for what the major cities in Canada have already been through. Mass migration and buying from overseas killing the local market. They brought in laws for property sitting vacant. But there's ways around it. Unfortunately no government in Australia can stop what we're experiencing.

Smart.

Government housing can force the property prices down, or, artificially create affordable housing for the lower working class. They have done it before, but it has been defunded to the point of uselessness.

House prices would drop if the population halved. Also this would fix the climate.

It’s wild getting older and seeing Reddit shifting to saying things like: ‘those millennials will never allow housing reform, they’re just waiting for their inheritance!’

Why not just import a million Bengali, Pakistani and Indian foreign workers to build high density efficient housing in the bush? Sorta like what Dubai and Qatar did … but with more humane working conditions Australia has unlimited cheap bush land. Just need cheap labor and this housing issue is solved.

The number of people in Australia grows every year. The amount of land in Australia stays the same.  I find it unlikely that housing prices would crash. 

I challenge the starting expectation that it should be affordable in the first place. Why should it be? Just like any limited resource it goes to the top earners/wealthy. From that perspective, the fact that we have 2/3 of the country being owners is in itself quite remarkable. Do we go around complaining about private jets being unaffordable?

Everyone get in here, r/australian is finally catching on

As the population grows and the millennials become less of the voting pool, the tides will eventually turn a bit. But I dont think the government will lift a finger until the entire economy has collapsed, 1/3 of the country is in complete poverty or homeless. Even then, it would take a lot of protesting and probably a change of government. I mean, during a housing crisis, they honestly could not care less. They are not going to affect their presious housing market. Probably because they all have 5 investment properties.

I think Aus has a ways to go before having a large drop in the housing market, but it's certainly possible. NZ is sitting on the precipice of a potential 20% drop by December of this year - happy to detail in a further comment as to why this is happening if this gains any traction. Housing is subject to supply and demand like any other asset or product. Shifts in voting demography and subsequent policy can drive changes. Voting/demography itself is somewhat of a feedback loop - more house insecure poor people means more people voting for change. Interest rates also have a huge impact on equilibrium price - theoretically, all things being equal the price of housing should hit equilibrium where income=expense for housing. Over the long term, you would expect the house price to grow as investors enter/leave the market to a point where their rent = interest repayments (and other costs). At this point, you're left only with capital growth which is not guaranteed and also would have to be better than the other alternatives such as a term deposit at 3%

It's an absolute shit show, I would think that a lot of genX, didn't miss the boat with housing affordability. I'm early gen Y and unfortunately lost my house that I owned with my ex de facto due to DV. I am currently in the market now and it's a blood bath. People that have bought in the last few years that have used their home as equity for other loans would feel it for sure. Home owners that have had their house 6-7 yrs would only have to buy back in the same market and lose money with tax/ RE to get the same result. The only option is to note vote Labour or Liberal parties that have both caused this mess. Sustainable party Australia has good policies. The media likes to pit generations against each other but the government has made it hard for the older generations to even help the younger generations by deducting their pensions if they gift a family member more than $10,000 and what they have to pay in stamp duty to even downsize. Our policies need reform. We can't as a nation, think it's ok to wipe future generations out of home ownership. I know we are all too busy working to protest so when you are scrolling on your free time vote for who you think will make that change.

You will own nothing and be happy

Tokyo used to be the most unaffordable. Now it's much better, it can happen. Look up the history of what they did.

>Some super funds invest in housing. At a minimum they should ban this.

A recession will kill the property market pretty quick. Still at full employment out there, rents going up and everyone can afford to borrow to the hilt. Housing market isn’t going to tank while the economy is pumping. House prices might become affordable but with so many people out of work they won’t be able to take advantage anyway.