The housing affordability debate is starting to leap all over the joint – from quips about breakfast options to now, a blame game.
So, I want to outline, in plain speak, why Australian housing prices are so high.
Five reasons why
Let’s keep this simple. Here are the big five reasons why.
- Urban planning policies
Glacial release of land for housing development, urban growth boundaries, packing the population in major cities and especially the inner city versus decentralisation or multiple CBDs.
- Tax incentives and taxes
Capital gains discount on housing, negative gearing, government first home buyer grants, stamp duty, superannuation access/use.
- High immigration and baby bonus
Nothing wrong with population growth, but it works against you when half of it is taking place in Sydney and Melbourne.
- Cheap and accessible credit
Low interest rates, lax bank lending (yes, it is still lax!) and offshore wholesale borrowing by banks and developers.
- Foreign investment
Mostly out of China and most of this capital goes into property; much of it illegal under current FIRB guidelines.
Everything else is BS.
Until next time,
Matusik Missives are free but public support is vital so that I can continue to fund investigations and publish posts which speak reason to the distortion. Your annual $99 donation helps me, help you! Click here to donate.