17/06/2023
Housing affordability crisis in Australia
Mortgage stress, rental property crisis is in the headlines for a while now in Australia. All major political parties, ruling and opposition alike, are making daily statements, claiming to be on the side of the public. Public as we all know, comprises of the property buyers and sellers, landlords and tenants but political leaders and their speech writers are smart enough to hide the differentiation between the two categories and which side of the fence they sit or reside.
First let me share some basic information and statistics and then we will return to the real issues.
Property price of a typical home has increased four times in the last 20 years.
Property rents have increased three times during the same period.
Average salary of an employee in the same profession has increased by two times during that period.
Now the questions that the journalists may and should ask these politicians at their press conferences are;
1. Why nominal property (asset) prices keep increasing decade after decade?
2. Why almost everything, property, rent, food and salary goes up with time?
3. If homes are not affordable, why common working-class people (not commoners), keep on borrowing ever increasing bank loans to buy houses larger than their physical needs?
4. If property prices are too high, then why investors keep on adding more houses to their portfolio?
5. If all political parties and their rhetoric slogans demand more affordable and social housing, first home buyers’ discounts and rent assistance, why don’t they admit that they don’t believe in Capitalistic, free market economy and openly advocate Socialist Economic model and provide universal basic housing, just like Medicare (universal basic health service)?
6. If the government (past and present) is really serious about making the housing more affordable, why doesn’t it take away the lucrative Negative-Gearing tax benefits and 50% discount on Capital Gains Tax being offered to property investors?
