Society/Culture The housing crisis. How is it fixed?

[Run n Spread]

Very emotive topic. But partisan.
There is the just work harder types not eat avaacado types
The back in my day types
The it's not so bad types
The communist everyone has stolen everything types so let's lock up everyone types
The it's all colonisation types.
But what the actual **** is the solution?
Like a real actual solution. There is no point denying there is a problem because clearly there is one.
So how does the country solve it?
My $0.02
Need to disincentive investment property which is a scurge on the country. 75% discount for primary residence 200% increase for second property
Tax breaks for those who build first homes.
Fast rail between regional and major cities.
GST funding dependent on states providing social housing

 

[Kram]

Increase supply.

 

[Goosecat]

Increase supply.

End Thread

 

[Run n Spread]

Increase supply.

True but who's going to than build the ****ing things and how are you going to than going to keep material and supply costs down

 

[Frank Grimes]

Housing affordability appears to be a global issue and not just a national issue. It can't really be fully resolved nationally, but there are some things that can be done nationally to make it "not as bad".

What can be done nationally imo is:
- remove NG.
Only the income from the investment should be able to be deducted from the investment expenses. It should not be deducted from other sources (job) of income.

- increase supply.
Easier said than done unfortunately. Developers deliberately manage the release and building of land and homes to maximize profits. On the flipside if it is not profitable then the developers just won't do it. There is no incentive for them to flood the market.

- Control bank lending.
A house is generally only worth as much as someone is capable of paying for it. The vast majority of people require a loan to buy a house. Sure, increasing the criteria of lending on the surface may mean that people have to save a larger deposit, but it won't be any larger in the long run. For example the deposit is for a $700k house, if lending was made easier then that will increase that house to $1m which would require the same amount for the deposit.

 

[HirdsTheWord]

Housing affordability appears to be a global issue and not just a national issue. It can't really be fully resolved nationally, but there are some things that can be done nationally to make it "not as bad".

What can be done nationally imo is:
- remove NG.
Only the income from the investment should be able to be deducted from the investment expenses. It should not be deducted from other sources (job) of income.

- increase supply.
Easier said than done unfortunately. Developers deliberately manage the release and building of land and homes to maximize profits. On the flipside if it is not profitable then the developers just won't do it. There is no incentive for them to flood the market.

- Control bank lending.
A house is generally only worth as much as someone is capable of paying for it. The vast majority of people require a loan to buy a house. Sure, increasing the criteria of lending on the surface may mean that people have to save a larger deposit, but it won't be any larger in the long run. For example the deposit is for a $700k house, if lending was made easier then that will increase that house to $1m which would require the same amount for the deposit.

Pretty good response.

Only thing i'd add is remove foreign money from housing system. if you aren't a citizen, you can't buy property.

There are way too many homes sitting empty because cashed up foreigners buy them, and dont even rent them out. They just sit empty.

https://foreigninvestment.gov.au/sites/foreigninvestment.gov.au/files/2023-10/res-insights-report-2021-22_0.pdf#:~:text=From%201%20July%202021%20to%2030%20June%202022,estate%20purchases%20with%20a%20level%20of%20foreign%20ownership.

 

[HirdsTheWord]

True but who's going to than build the ****ing things and how are you going to than going to keep material and supply costs down

Building houses themselves isn't the issue.

Houses are cheap to build.

The problem is the infrastructure. Roads, Transport, Schools & Utilities etc that need to be built along with the houses to make the communities attractive to people. Thats the expensive part.

People need Jobs, the jobs are in cities. People dont want to move where they are commuting 1hr + to work each way because of our shitty transport systems compared to other countries.

 

[No Hassle Hough]

It's a complex problem and Governments don't really want to do anything serious to fix it.

The federal government is too highly reliant on Income Tax revenue. When it needs more revenue (to balance the books) it increases migration to increase the number of Tax Payers. This greatly increases housing demand and prices.

To really fix the problem the Tax system needs to be reformed. There are a number of changes to existing taxes, new taxes etc that could help with this. However, these will not be popular in the short term so Governments will not implement them.

 

[HirdsTheWord]

It's a complex problem and Governments don't really want to do anything serious to fix it.

The federal government is too highly reliant on Income Tax revenue. When it needs more revenue (to balance the books) it increases migration to increase the number of Tax Payers. This greatly increases housing demand and prices.

To really fix the problem the Tax system needs to be reformed. There are a number of changes to existing taxes, new taxes etc that could help with this. However, these will not be popular in the short term so Governments will not implement them.

that and the current voting base is majority homeowners, so if you are going into an election which focuses on making housing cheaper, you likely won't get voted in.

the solutions to fix housing aren't really that complex, it just very very political, which where the complexities lie.

For decades Australia has allowed its housing to get out of control, to the point now where it is incredibly hard to unwind it.

 

[Rob R]

Lots of things can be done but governments at all levels are too beholden to lobbyists, too reliant on stamp duty and just too gutless to take action.

Remove the 50% discount on CGT
Remove the depreciation expense for NG
Cap NG to one per household
Limit AIRBNB to primary residence or part there
Much higher taxes on vacant properties
Make developers actually deliver the housing and other infrastructure they promise in a reasonable time
Fix public transport so people can to work without long commutes
Decentralise CBDs, with ICT these days there is no reason that the majority of government jobs can't be outside the CBDs and capitals.
Ban all non citizens from owning residential property
Cut immigration
Ensure that the areas we need skilled.labour in are reviews regularly and temporary visas are only extended if the area remains a priority need
Increase education to reduce our need to bring in foreign labour
Put a tax on companies that employ non citizens to fund more social housing
Put a tax on rentals to non citizens to fund social housing

On SM-A125F using BigFooty.com mobile app

 

[_Mike_]

One of the biggest drivers for why houses are so expensive is foreign ownership, residential data shows foreign buyers made 5,360 residential real estate purchases in Australia over the past financial year, spending $4.9 billion. The Gov hits foreign owners with tax for vacant houses, although it's argued that property is used for money laundering by foreign interests, and ofcourse the Gov would argue more tax is better.

• ban foreign ownership, meaning you must be a permanent resident or Australian citizen to own residential property
• remove stamp duty for first home buyers, who are Australian citizens

 

[ShanDog]

I don't know how common this is to other cities, but in Adelaide suburbs, the common thing to see if the old 700-800 sqm blocks divided and two new, smaller residences built.

I wonder how much of an effect this has on prices compared to a hypothetical situation where that was not allowed and homes had to be built elsewhere. Would that mean more land has to be opened up further away from cities, creating cheaper housing and more of it? I understand that's the gentrification process, but is that necessarily a bad thing?

 

[_Mike_]

I don't know how common this is to other cities, but in Adelaide suburbs, the common thing to see if the old 700-800 sqm blocks divided and two new, smaller residences built.

I wonder how much of an effect this has on prices compared to a hypothetical situation where that was not allowed and homes had to be built elsewhere. Would that mean more land has to be opened up further away from cities, creating cheaper housing and more of it? I understand that's the gentrification process, but is that necessarily a bad thing?

Perth is an example of how the urban sprawl didnt work, the government doesnt have the capability of funding endless growth corridors with supporting public services. Box Hill in outer east is a classic example of how they're changing to transport hub planning with more hi rises close to major train stations

 

[Kram]

Perth is an example of how the urban sprawl didnt work, the government doesnt have the capability of funding endless growth corridors with supporting public services. Box Hill in outer east is a classic example of how they're changing to transport hub planning with more hi rises close to major train stations

I dont think it's that bad in Perth, most of it runs north south along the train lines and freeway. Improvements are being made as well like a spur line to the airport which also connects more suburbs east of it and the the about to open line servicing the previously isolated Ellenbrook. I think there is also loop links in the long term pipeline as well.

Probably worst pointless sprawl I've seen was around Gnangara, heaps of crowded 4x2s with no green areas and nothing out there.

 

[Seeds]

End Thread

Also need to lower regulations to reduce the costs of building on land.

 

[Seeds]

Perth is an example of how the urban sprawl didnt work, the government doesnt have the capability of funding endless growth corridors with supporting public services. Box Hill in outer east is a classic example of how they're changing to transport hub planning with more hi rises close to major train stations

Do Public service requirements disappear because you build up? You dont need less classrooms, less hospital beds, less police etc. You need less roads but you also have more expensive buildings to put public services in because the cost per unit of floor space is much higher when you go up.

Australias greatest asset is land space. Its ridiculous that we dont use it. By not using it, we make things more expensive for ourselves. This includes public services.

 

[Frank Grimes]

I don't know how common this is to other cities, but in Adelaide suburbs, the common thing to see if the old 700-800 sqm blocks divided and two new, smaller residences built.

I wonder how much of an effect this has on prices compared to a hypothetical situation where that was not allowed and homes had to be built elsewhere. Would that mean more land has to be opened up further away from cities, creating cheaper housing and more of it? I understand that's the gentrification process, but is that necessarily a bad thing?

That is pretty common in Melbourne suburbia these days. I even sub divided my previous house land and sold my backyard.

 

[Goosecat]

Also need to lower regulations to reduce the costs of building on land.

I have an entirely different, out of the box idea regarding the land development issue (assuming that is the regulation issue you mean), but it would take an extensive reply to elucidate it properly. Nonetheless the below is a true reflection regarding land costs without going into the remedy.

As far as land development costs and regulations are concerned it pays to note a particular irregularity in that area compared to other areas within the residential building "industry". I have observed many periods of residential building efforts, throughout varying levels of economic reality in this country and acknowledge the thousands of builders whom have gone "bust" at different periods along the time-line. What I have almost NEVER seen, during ANY period, is that same reality applying to LAND DEVELOPERS, It just doesn't happen. Land Developers do not go bust. That indicates to me the entire promulgation of supply restricting high land development costs being a massive issue, is a "Red Herring". I'm somewhat staggered that almost no purportedly trained economists seem to have actually bothered measuring that comparative reality.

The continual promulgation of restrictive high land development costs is used by land developers to curry favour, engender fear, enable drip feeding and price support whilst ensuring recurring special governmental treatment and economic benefit. I have spoken with very high, government level advisors on this topic through "acquaintance" coincidence and have had it confirmed. The entire "Land Developer" supply drip feed and development cost "scare scenario" is a scam basically. None of them go bust, EVER. It is not the issue some would have you and government believe.

This a very political area however and no-one, not even the media have ever really exposed it. The level of political party ramifications regarding the handling of vast tracts and sections of land owned and planned for future development (or blocking of development) throughout the entire country is a dirty little secret in reality. Whether it's a particular states largest Land Developer and it's particular aid to certain political election efforts that depend on future planning of infrastructure and subdivision etc, or even the small local council's future planning development study and smaller land holders, the reality behind this stuff is far deeper than most have ever actually managed to reveal. I've spoken to economists whom secretly tell me it is the single biggest driver of land "unavailability" throughout the country.

The answer to this Land Developer problem, is to remove some of that influence from Land Developer hands. There are varying ways that could be done and I have my own ideas on the best way to do it. At it's base is the re-empowerment of Aussie voters/citizens regarding their own existing blocks of land, subdivision codes for those blocks (very specific small changes that can have massive effects), estimating per unit infill infrastructure costs for areas and recovering the development portion of those costs (as is already done in some electrical supply system growth), plus a National Gov body.

 

[Kram]

I don't know how common this is to other cities, but in Adelaide suburbs, the common thing to see if the old 700-800 sqm blocks divided and two new, smaller residences built.

I wonder how much of an effect this has on prices compared to a hypothetical situation where that was not allowed and homes had to be built elsewhere. Would that mean more land has to be opened up further away from cities, creating cheaper housing and more of it? I understand that's the gentrification process, but is that necessarily a bad thing?

Battle axing?

Apart from the leafy western suburbs that's very common in Perth around maybe 12 km from the CBD.

 

[Goosecat]

I don't know how common this is to other cities, but in Adelaide suburbs, the common thing to see if the old 700-800 sqm blocks divided and two new, smaller residences built.

I wonder how much of an effect this has on prices compared to a hypothetical situation where that was not allowed and homes had to be built elsewhere. Would that mean more land has to be opened up further away from cities, creating cheaper housing and more of it? I understand that's the gentrification process, but is that necessarily a bad thing?

It's massive.

Almost 70% of all land lots in Western Australia for example have a particular coding that restricts subdivision too much. It is similar in other states where the vast majority of land lots are single residence lots between x and y size with a minimum block size and often an "average" block size restriction that stops subdivision. Often an 800 sqm block that can't be divided due to a minimum or average block size requirement of 450 sqm for example. Drop that 450 sqm to 400 sqm for example and you instantly have hundreds of thousands of extra blocks available, not reliant at all on any compromised Land Developer.

People (including so called experts whom haven't put this together) need to understand the possible ramifications of releasing all that land without requiring LAND DEVELOPER input and deliberate hold up etc. It's literally hundreds of thousands of blocks of land. Theoretically at least you could instantly smash all block prices to next to "nothing" by bringing on that level of supply.
Now I'm not saying that would be wise at all, for what should be really obvious reasons, but rest assured, land availability in this country is not, or rather should not, ever be an issue. We are NOT SHORT OF LAND.

I also have a way to solve the infrastructure upgrade cost for beefing up the sewer and electrical systems to handle the infill requirements.

 

[basashi]

It is a simple question of who you are governing for.

 

[Goosecat]

It is a simple question of who you are governing for.

It once was. However the level of individual Aussie citizen investment and exposure to "Markets" has greyed that area. Nowadays affecting major companies and businesses purportedly in favour of the "little man" has more direct affect on the individual citizens themselves than ever.
Banks, Superannuation vehicles and even governments now through shared equity schemes, are invested so heavily in housing in Australia (because Australia is basically "Houses and Holes" and they have to invest all this money somewhere) that causing big price "reductions" in housing would have massive effects on every individual.
The truth is; no matter what everyone says they desire publicly regarding house price relief; no one dares make major negative price affecting changes for fear of the repercussions. As such; don't expect any massive price reductions via government policy implementation. There will of course be tweaks at the margins and natural price corrections at points along the time-line, as there is in markets generally, but government attempts to appear to be making concerted efforts to "bring down house prices" are just that; "Appearances".

 

[10571z]

How to fix housing?

For one make it a 6 day process for a building permit not 6-12 months. That is an easy start.

 

[BigPond101]

World war 3, society collapse, complete upheaval of the economy system AKA Russka 1917 nothing less will do it.

 

[HirdsTheWord]

Not really.

Materials and labour costs magically increase with the prices houses increase.

bzzzzzzzzt

wrong

Residential Construction costs generally are back down to earth. Outside of the known blip being COVID.

The cost to build an average dwelling is generally back to its pre covid decade average. CPI adjusted.



The reason housing is expensive is all the costs you dont see, which aren't part of the physical house. As I mentioned above.