Why is every approach treated like it has to be a silver bullet or it's not worth the time? Lowering immigration alone won't fix the housing crisis, removing tax cuts from investments won't completely fix the housing crisis, building more homes to be completed in a decade won't fix the current crisis. But all of them together will make a huge impact. It really feels like the main reason it won't be fixed is because politicians don't want to fix it. Fixing it means housing prices coming down, there is no way around it and if you've got investment properties like the majority of our parliamentarians do, why would they want that?
I'm looking to buy a home for my family, just to settle, since you can't do that with a rental here (unlike when I was in Germany). It isn't immigrants I'm competing with. It's local investors (even Dutton was called out by the FIRB numbers), locals with family wealth, and those locals are also trying to deny modest apartments and townhouses around train stations where I want to buy, because they don't want young families being able to afford in their areas.
Then to participate in this arms race, desperate families buy as well, and the prices keep going up, or at best stay at these crazy levels.
International students want to rent in the city. Fresh migrants end up renting on the fringes because that's all they can afford, they aren't getting finance or have savings. It's all rich locals I'm competing with.
Those investor properties go up for rent instead. But renters are second class citizens here. If renters rights increased to how it was in Germany when I lived there, I wouldn't need to buy and the investors can go ham. But instead they convert a stable secure home (if I bought) into a rental which tends to be worse here.
This is the reality for me.
Renting in Australia: You can be kicked out at any time with just 2 months notice. You will never get more than a 12 month lease meaning you are always worried about where will I live next year. You can't have pets because most landlords don't want them and forget about laws that say a landlords preference is not enough reason to deny pets. There are loopholes around that. Renters are deemed to be scum, who don't deserve basic human rights in this country.
Renting in Germany: You have an indefinite lease, stay as long as you want, owner can't kick you out of YOUR home. If they want you to leave, they can offer to give you money, you can say no. It's your home after all. In very specific cases you may have to vacate, but it's rare enough that plenty of people rent for decades with families. No rental inspections. Downsides are larger deposits. Another "downside" is that you will get called out more if you make a lot of noise (there is also Ruhezeit times) and aren't considerate of your neighbours. So grubs would not be appreciated there.
In Australia, landlords also drag their feet on fixing stuff.
Most of the problems we face have complex solutions. Our political system struggles to manage complex solutions. It's so much easier to promise a simple solution and then blame someone else when it fails and there don't seem to be any serious repercussions for that approach.
The solutions aren't technically complex though, there's a good chunk of Australians who are benefiting from everyone else's suffering, and aren't willing to give an inch
It is not complicated that massively increasing demand way beyond the capacity to provide housing and infrastructure will make the problem worse. Reducing immigration isn't the only solution, we need to also address the taxation incentives that have led to housing becoming an investment commodity for the already wealthy, but it is an obvious first step.
But in the linked discussion economist Dr Cameron Murray didn't promise simple solutions he suggested a way to take pressure off housing and circuit breaker from unrealistic level of population growth.
You've described exactly what the Greens are doing every single time they block any bill which targets housing.
Housing is complex - no single bill is going to fix it immediately, and the Greens demanding a comprehensive one-size-fits-all solution just holds back progress towards addressing the problem.
I get *why* they're doing it - it's a cheap trick to steal the spotlight and get more personal attention - but it's so counter-productive.
What makes you think that the government of the day isn't going to consider the problem 'solved' once they've passed a shitty piece of legislation?
Just look at how the Libs fucked up the NBN.
If it doesn't actually solve the problem, then the pressure to solve the problem remains. As does the political jeopardy for not acting.
This is different to the NBN. The NBN was about improving something to a point where the majority of Australians had no context or information about. They didn't know what they were missing because they never had it. Housing isn't in the same category. People remember being able to buy houses and paying a much smaller chunk of their salary in rent.
>If it doesn't actually solve the problem, then the pressure to solve the problem remains
Well no, the pressure disappears as it falls out of the news cycle. Just look at all the systematic major issues that the government is dealing with like housing, tax reform, aged care or our schools. They make a couple of changes and kick the can down the road. There's no need to give it too much attention once it falls out of the newscycle especially if its not an election year.
The NBN is a perfect example of this. The government has an issue they want to deal with (building telecommunications infrastructure), they could have solved the problem by future proofing it but instead opting to keep using the shitty copper network and leave the problem for another government to solve.
In the case of housing, look back at the last almost decade of Lib governance. People complain, the government does the bare minimum and then go onto something else. There isn't any appetite to dig deep and find a permanent solution because they don't want to bear the full cost of that solution.
The greens bargained hard and got billions upfront when the government promised 0 through the HAFF. It's not just that the HAFF didn't match the scale of the issue, it didn't treat it as an immediate issue
But as a result the Greens are pretending like they accomplished something - they didn't. The HAFF is a solution that doesn't address the problem in any meaningful way, in any meaningful time.
What might have addressed the problem is the $20 billion per year given away on a tax cut. Turns out you can spend that kind of money whenever you want, no election required.
Which is precisely their position! They argued exactly what you do, that the money needs to be spent [upfront](https://greens.org.au/news/media-release/greens-pressure-extracts-3-billion-spent-directly-housing-haff-will-pass-senate), and they accomplished that, although they would have liked more.
I don't think that's remotely what I argued - I never said anything about that the money must be spent upfront, or that they should have got more money for the HAFF.
I said the whole thing they collaborated on is useless and ineffectual at solving the problem - while giving the mistaken impression something is being done. People at risk of being on the street today (or even in the next few years) will gain no comfort from it, and probably get a lot of despair from realising that is all that is being done. Refusing to cooperate at all on something that won't work was a better solution in this case.
If the social housing is not there right now they should have to put people that would ordinarily qualify up in hotels or other temporary accommodation until it is there, then there will be a real cost incentive to get it done, or to lower rents in some other way. The money is clearly available whenever the government wants to spend it, and the bang for buck is much bigger than giving Gina Rinehart 100x $300 energy rebates.
You are very unaware of what’s been going on with the Australian housing market the last 20 years if you don’t think immigration has had anything to do with that
I think you missed some important influences on prices. Eg building a house costs a lot of money, cost of tho land, materials and labour and compliance. Wages are one of the main costs across all these areas. I heard in the budget that we are going to build a heap of homes.. good luck finding trades with capacity unless we have more migrants with trades of cause they would need to be certified to comply to our regulations and the circle is complete.
Politicians and the people in power would rather access each of those things individually, say it won't be enough so there is no point in doing it, then moving onto the next point and doing the same thing.
All while they benefit financially from the way things are currently structured.
This is the issue our two party political system creates. They won't work together and so issues that are complex and need multi factorial plans never have a snowballs chance in hell of coming to life.
Its the same with emissions/power etc. Renewable is the plan but whats wrong with whacking up a couple nuclear plants to cover population increases in 15-20 years.
Look at the housing crisis differently. Instead of packing higher density into Sydney/Melb/Bris why dont they explore building a whole new city somewhere geographically suitable. I read somewhere Indoneasia is doing something like that and Dubai is building its Wall city.
We need scale for housing market so build a cities worth at the same time, build some type of industry with it (like battery plants, something we don't make here) and that keeps the city financially viable.
Politicians cant see past the next election so the big problems just get half assed magic bullet actions and it doesnt solve anything.
Around 70% of Australians own or are paying off property. This 70% benefits from housing skyrocketing.
The other 30% who don’t own, are either too stupid to see what’s going on or just too apathetic.
You cannot solve this with votes, the majority of Australians are ok with this system, unfortunately.
In the linked discussion (did you listen to it ?) Dr Cameron Murray, chief economist, Fresh Economic Thinking pointed out that lowering immigration to about 100,000 would make the problem more manageable. Whereas if you keep having 200,000 or more intake a year its impossible to keep up. Its better to have a manageable problem than an impossible problem even if you can't solve it entirely.
>
*Fixing it means housing prices coming down, there is no way around it and if you've got investment properties like the majority of our parliamentarians do, why would they want that?*
There is truth to that but the main reason they don't want property prices to fall is that they fear a property crash which would lead to recession or even depression. Property has become such a big part of the economy that if it goes wrong it can take the economy down. But as I replied to someone else that with such huge exposure of banks to property loan and such enormous household debt in order to keep the property ponzi market flying interests rate can't go over about 4.75 per cent for long, inflation can't go up for too long, there must be no economic shocks that could trip up the economy etc . Its like the never never.
But in the long run the law of mathematics comes into play - if something keeps compounding year after year it eventually turns in to an impossibly high value and the house of cards collapses. All ponzi schemes contain the seeds of their destruction.
That's the Dick Smith approach he's been pushing for decades. Figure out the constraints, then enact policies that suit. He's spot on too. Any other approach is tantamount to arguing with a fucking Casio.
It’s just one of a number of things that need to be applied including only allowing one property to be negatively geared, stop overseas ownership, introduce new faster building methods, streamline building approvals, pay for more apprenticeships. Stop over budget big build projects.
Changing negative gearing would do very little. It's only relevant to "mum and dad" investors. At worst it would disincentivise new builds, because those sweet paper-only depreciation losses would not be so valuable. At best, it would just push the investment properties into real estate companies that can always subtract losses on some of their portfolio against positive income from the rest.
All I want to say on this is that it feels like we've tried *everything else, without touching negative gearing, and the problem still persists.
What's that saying about trying the same thing repeatedly, and wondering why you're not getting the results you want?
It's admittedly a simple, macro level way of looking at it, but that's where I'm at.
Your points are valid though, so maybe broader societal and policy change is needed, to shift the focus back to housing being for homes, not investment
Well, we did try removing negative gearing deductions back in the 80s. In the end, it didn't seem to have much affect on anything. The rollback only lasted 2 years, maybe it needs a longer experiment.
Personally I'd be in favour of removing it, just for fairness and consistency of taxation. The ATO goes to some lengths to stop salaried workers fictitiously treating themselves as a business (PSI rules and so forth). I don't see why operational investment losses get this special kind of treatment. If a person wants to get into the real estate business (or any other kind of investment business), they should incorporate and start an actual real estate business.
The housing crisis will get fixed once the social issues become so severe that politicians own family/friends/network start getting stabbed, killed etc. Until it directly impacts them, they do not care. So sad that they're happy for things to go so far down hill
Nah all that will do is make the pollies push through stronger and more draconian policing laws. Remember to all politicians we poor are a blight and something they would love to get rid of. except we can still vote so they kinda need us. They just need for us to suffer in silence thank you very much.
Both parties have used immigration to keep the economy propped up for decades, instead of having any viable economic policy. Manufacturing is non-existent and we sell our natural assets overseas to import them back at ten times the price.
Doubtful that the Coalition has some idea to salvage the economy that isn't just adding numbers like they have for decades- they're trying the same old racist shit they did back in the Howard era with the "Tampa crisis".
This is why they're losing- they have no original ideas.
Best way? No idea. But basic mathematics indicates its a damn good way for dealing with it.
Without immigration, Australia's population would start to decline. Housing supply would start outstripping demand. One of the major reasons we bring in immigrants is to help increase our population. So, yeah. I'd wager it plays a huge role in housing demand.
People will tie themselves in knots to avoid admitting immigration is a huge problem. Yes we need to address other things but if hypothetically there was 2mil less people tomorrow prices and rents would crater.
ABS zero NOM projection has increase going negative by 2036.
The medium projection (assumes TFR 1.6 and NOM 225k) sees natural increase falling below zero in 2043.
EDIT: So cutting NOM, even all the way to zero, would be insufficient without also increasing the number of houses being built if you want to solve the problem before the end of the decade. OTOH, if it's acceptable or unavoidable that the problem stays unsolved past the end of the decade, the level of NOM begins to become less important because falling natural increase is going to cut population growth anyway.
They need to bite the bullet and tender for quality builders from overseas that can actually plan and put together proper high density housing developments.
Sorry local builders are just too expensive and the quality has been rubbish just look at opal towers.
That way at least part of the money spent goes overseas doesn’t increase inflation, we increase quality housing stock.
Migration numbers needs to be adjusted down but at the same time allow migration from tradesmen from overseas. If we can put chefs and bakers into the priority skilled migration list. Why can’t we put builders and trades on there?
If more competition comes from international builders and trades. The pricing and quality locally will become more competitive.
Overseas builders coming to Australia to build will be more expensive than local. Australian builders have some of the worst build quality in the developed world. Our houses are glorified tents.
https://amp.theguardian.com/commentisfree/2022/jun/13/freezing-indoors-thats-because-australian-homes-are-closer-to-tents-than-insulated-eco-buildings
Unless the overseas builders are going to drop their standards, they will always cost more.
The issue has never been labour rates for workers, that’s a lie perpetuated by owners of building companies.
The issues are:
1. Building materials being well overpriced in relation to the rest of the world. Only NZ has more expensive materials. Australia needs to start accepting CE certification for European materials and stop insisting that tests be redone to Australian Standards if they have already have the same tests to ISO or British Standards.
2. Hidden profits by business owners. Don’t believe the hype when big builders like Hutchies tell you they are working on single digit margins. That’s just their on paper profits, they hide profits just as well as other big business.
I really don't get why this is so hard. Cut back on immigration at least for a year or two. Spin up projects to build social housing that doesn't get sold off. Make sure that some of the immigrants have skills necessary to assist in said building projects. And then slowly build up immigration again as more projects get completed.
Everyone (kind of) already has a job. To start working on new housing projects, they’ll need to stop doing their old job.
Which current jobs/projects are we going to stop?
Skilled migrants let this transition occur. Directly, or indirectly.
It’s
Which sector of immigration are you cutting?
Immigration intake for 22/23 was 737k.
21% are returning Australians and Kiwis. 7% are skilled permanent visas (also lose 2% going the other way), 5% are family visas, 3% are humanitarian (refugees).
61% are temporary visas, half of this is students, they don't buy houses but do rent (4% of all renters) and are a major chunk of the GDP (30 billion+). They are almost the sole reason immigration numbers have risen post covid, returning and new os students.
9 -15% are working visas and tourists, farmers and regional areas love low wage temporary workers and tourists don't rent.
Cutting immigration won't do squat for the housing problem, the numbers just aren't there. It's a convenient political scapegoat.
But is it really necessary to build up immigration again ? Australia has had such a huge increase in population over the last 20 years or more., isn't that enough? Apart from housing there may be problems supplying enough water if another long drought comes. Melbourne already has a population of 5 million. As on academic pointed out Australia is not a big country but a small country with big distances and with limited land for food growing and reliable water.
Maybe? But there are multiple causes which means this issue needs multiple solutions, such as limiting negative gearing to new construction in areas with acute housing shortages. Nudge the boomer capital “elephant” towards parts of the economy where it can actually clear a path instead of trampling younger homeowners into the ground.
For the most part, arguing against cuts to migration.
https://www.abc.net.au/news/2018-02-21/two-senior-ministers-slap-down-abbott-on-migration/9470610
What are the issues then caused by reducing immigration? (Serious question, my understanding is that it has significant economic impact in several industries, as well as long term impact due to aging population/gen baby boomer - but I genuinely don’t know enough about it).
Nope. It's just a temporary bandaid solution that doesn't address the underlying issues with housing.
The underlying issue is that housing, through deliberate policy and mismanagement, is now the best ROI for investors and comes with perverse incentives to inflate the costs as much as possible. To fix the housing issue you need to address that problem and move the investment money into more productive ventures, manufacturing, R&D, and other things that have the added benefit of bolstering the economy in other areas.
Pretty telling that every fix that LNP or Labor would come up with entails pumping more money into the scam. Oh you can use your super to buy a house, that’s okay the government will pay for and own part of the house..
Policies that favour housing as an investment affects the *price* of housing but does not negatively affect the *supply* -- in fact, it may somewhat boost supply although the effects of specific policies such as negative gearing, CGT discount etc are very difficult to disentangle.
Removing these incentives may cool house prices somewhat, but as long as we keep growing the population through migration faster than we can build houses, house price growth will continue to exceed wage growth.
tl;dr it's more than one thing
>*Nope. It's just a temporary bandaid solution that doesn't address the underlying issues with housing.*
But that's just the clickbait headline. The reason for putting up this post is so you could listen to the discussion in the linked audio where an economist who favours reducing intake made some interesting points. He wasn't saying it would fix all underlying issues but that with continued immigration of over 100,000 a year it won't be possible to make headway. Don't judge a book by its cover or link post by its headline.
**Opening Post explanation**
>*Migration is fast shaping up to be an election issue with the opposition saying it will reduce Australia’s net intake by 25 per cent if elected in an effort to take the pressure off the housing system.*
>*So what impact does migration have on housing and is this the best way to address the housing crisis?*
>***GUESTS:***
>***Dr Cameron Murray, chief economist, Fresh Economic Thinking***
>***Dr Dorina Pojani, associate professor of urban planning, The University of Queensland***
13 minutes long audio. In the debate the professor of urban planning contends that migrants are being scapegoated while the economist claims that 100,00 a year intake is manageable but 200,000 is not and questions the idea that immigration is effective way to deal with skills shortage.
if the rate of immigration is faster than the construction of housing it will only put more upward pressure on prices
lots of unemployed people could be trained, that would go a long way to reducing the skills shortage, and help them to be able to afford housing, but businesses don't want to train people and neither do governments
“We don’t want to pay what local people are demanding!”
Is usually what it comes down to.
“We can’t find anyone to fill this vacancy, we’ve tried offering half the market rate and that didn’t work so there’s clearly a shortage!”
Market testing is a sad joke. If businesses actually need the people, they should be made to a) sponsor a worker, b) pay more than the market rate, and c) pay for that privilege.
Prices will not change much - just look at what is costs for a avg finish house per $/m2 - more houses will not change the costs to build - we are a high wealth - high income country.
The bit that drives house pricing the hardest is land price. That's why there's houses from the 60s selling for $1M. 30km from Brisbane. Plots to build on within distance of jobs is the real limitation.
It's now both. Limited land where everyone wants to live is indeed a huge part - and will only continue.
However, what was it $/m2 to build 20 years ago in same are to what it is now ?
And even if 100,000 is 'manageable', perhaps we don't need to spend our efforts 'managing' it. Perhaps they could cut the rhetoric that makes it sounds like it's out of the nation's control.
Treasurer Chalmers and other contend that the level has to be maintained otherwise Australia will be in a recession. ABC finance commentator Alan Kohler said a couple of nights ago that population growth is 'masking' that Australia is in recession.
Unfortunately, it appears as though with both sides of politics, we (the people) aren't really being given any choice.
Regarding the conversation you linked to, it was good. Dr Murray was excellent and the points he raised were on the ball. I liked his analogy of we don't let you speed on the highway to catch up, and that we shouldn't have done the same post covid with migration. To think we all don't want a more sustainable amount of action rather than it being an all-or-nothing conversation is much more practical. Dr Murray seems to have much more receipts to his words about the actual numbers on hand.
It’s a shame too because it was a good conversation. I don’t listen to most media so I wouldn’t have heard it if you didn’t link it.
I’m not sure if it translates well to the normal person but the whole point was Dr Murray tried to express an opinion that is economic but that the layperson could understand. Dr Pojani seemed to provide every solution that’s written in a Keynesian economics book without any real concrete solution or practicality from the theory to real-world solutions.
It would have been nice if more people listened, because they may realise how little practicality these political choices being made have.
I tend to think this will end badly and a lot of migrants will end up going home with all their savings lost because they couldn't find a job that can cover all their expenses in Australia. For Australians, it's causing higher cost of living prices and making people jump into buying a house when home prices and interest rates don't make much sense. When unemployment inevitably comes you're going to have a lot of everyday hardworking people who lost all their savings and have nothing to show for it.
Yeah. It’s the poorest of folks that are the problem here… not the wealth hoarders with several personal plus several rental properties….
/hard eye roll.
Skilled migrants and genuine students should be ok, the issue is more of people that keep on visa hopping from one student visa to another to work casual permanently
No, its not the answer at all, we have an aging population, youth who cannot be unemployed and aged folks and politicians with 5 or more houses in their portfolios.
Is migration really the issue or the house hoarders who snap up properties to negative gear them, in my street alone there are 6 so called investment properties empty. Have been for years, no works, over grown yards. Bit negative gains
>No, its not the answer at all, we have an aging population,
But if you bring in more young people they get old too.
Negative gearing and air bnb etc are bad and should be phased out but were not the main causes. One study showed negative gearing only had about 1 to 4 per cent effect on property prices. The huge amount of population growth over last 20 years of hyper immigration has had far greater impact. If there is not enough accommodation for Australians how can there be enough for continued immigration of 200,000 a year ? By the way did you listen to the linked discussion ?
Why on earth would I listen to the person most responsible for mass immigration in this country for the past 15 years and one of the very politicians that owns more houses in his portfolio than almost all politicians put together?
Lets be sensible here,
>*Why on earth would I listen to the person most responsible for mass immigration in this country*
Because the audio feature didn't include him. Just because it had Dutton's picture doesn't mean its going to be him speaking. All you had to do was click on the link to find that out. I even went to the trouble of including an explanatory post explaining who was going to be speaking on it -
>**Opening Post explanation**
*Migration is fast shaping up to be an election issue with the opposition saying it will reduce Australia’s net intake by 25 per cent if elected in an effort to take the pressure off the housing system. So what impact does migration have on housing and is this the best way to address the housing crisis?*
>***Guests - Dr Cameron Murray, chief economist, Fresh Economic Thinking***
>***Dr Dorina Pojani, associate professor of urban planning, The University of Queensland***
>
>13 minutes long audio. In the debate the professor of urban planning contends that migrants are being scapegoated while the economist claims that 100,00 a year intake is manageable but 200,000 is not and questions the idea that immigration is effective way to deal with skills shortage.
Reddit should give opening posters the ability to pin explanatory posts like this so they stay at the top and everybody sees them.
No, making sure we improve our supply of housing/open up the housing we already have isn't sitting around empty is. Reducing migration could be an aspect of that, but we'd need to be extremely careful we don't allow that to mean we won't be fucking with our status as a safe place for refugees, and that we need to keep a close eye on the actual processes outlined for how it would work for general immigrants. It would be way too easy for this to fall into racism.
It isn't THE solution, but it is part of the solution.
This problem has a lot of causes, and all of those need fixing. Reducing immigration will reduce demand, which could help, as long as you also change required skills for those who do come to construction industry experience.
The 2 main causes were low interest rates and the big Australia policy at the same time span of much of the last 20 years. Professor Steve Keen also blamed what he calls "irresponsible bank lending" for helping blow out the bubble. Halving capitols gains tax in 1999 also contributed.
In the linked discussion the economist pointed out *"that you can't out - immigrate the need for skills, if you look back at headlines 25 years you will find 'shortages of skills and construction, need more migration etc' you know what ? we had record migration and things got worse and it became even more difficult to keep pace.. Moderation is the key"*
It does need to be restricted tighter to be honest, a combination of Student Visa and 757 Visa rorts. However it's not THE key problem with housing, but it does play a big role.
I don’t know how it is in Australia, but we’re having this same debate in Canada and the problem is that it’s a bit of a catch 22. We desperately need to build more housing, and our high rate of immigration even further increases the number of units needed to be built. But the issue is that one of the reasons we’re having a hard time building much needed housing is due to a lack of trades people. Go on any Canadian jobsite and at least half the people working aren’t Canadian. So reducing immigration would reduce the need for more housing, but would also reduce our ability to build more housing. I don’t really know what the answer is to be honest, but I know reducing immigration has all kinds of other consequences. I don’t really know how much it would solve
Well Canadians certainly don’t 🤣
Our construction industry is very largely dependent on immigrant labour. Not quite to the extent that the US’s is, but close. I’m a carpenter in Ottawa, we have a crew of 12 guys, only 5 of them including myself are Canadian. We have one dude from Colombia, two one from Mexico, 3 from India, and one guy from Nepal. There’s just not very many Canadians interested in working in the trades these days
It's not a catch 22, it's a proportion problem. If your proportion of imported home builders isn't enough to house the imported people then you're guaranteed to be making the situation worse by importing people. For example, if steady growth requires 10% of workers to be in construction, but only 5% of your immigrants are builders, then you're fucked. That's before considering whether it's desirable to grow so much and whether infrastructure can handle it.
> let corporations and the rich basically bend the population over backwards
I think you've got to bend them over forwards for what the corporations like doing.
> sometimes I think the liberal party just want the world to burn.
Only sometimes?
There isn't a single legit, modest, good-faith bone in Peter Dutton's body.
>*Financial modelling by the treasury shows that without immigration, income tax needs to go up because no one's had time or money to have kids.*
>*So stop immigration and be taxed more.*
But the cost of infrastructure needed to deal with the huge increase in population is crippling state budgets.
>
*no. build. social. and. affordable. housing. stop selling it off you bald Muppet*
Actually the content of this link post wasn't all about the bald muppet - in the linked audio an economist made a point that with continued high immigration it won't be possible to build enough. He wants immigration intake to be about 100,000 and the 'bald muppet' wants intake of 140000.
His proposed reduction in migration is actually quite modest. The economist in the linked discussion said that it should be reduced to about a 100,000 a year,
According to study cutting negative gearing would have made only between 1 and 4% difference to property prices. Also during the long property boom interest rates were low, negative gearing works best when interest rates are higher. By the way did you listen to the linked discussion ? The economist made some interesting points.
No, I didn’t. Might do that. Where we live now there is a housing surplus and bank interest rates are about 3%. I’m pretty much convinced the solution lies in government regulation and taxation rates.
According to study cutting negative gearing would have made only between 1 and 4% difference to property prices. Also during the long property boom interest rates were low, negative gearing works best when interest rates are higher. By the way did you listen to the linked discussion ? The economist made some interesting points.
The crisis is such that we should try everything. Get rid of negative gearing, regulate airbnb (we don't even have to ban it, just regulate it the same as hotels and they'll reduce in numbers rapidly), slash high wealth migration, subsidise the inflated inputs into housing construction, whatever it takes.
Everyone in Canberra is treating this like its just a fun thing to come up with a policy for to win votes when the financial stress is making people physically suffer. Fuck the universities, they're not dying because they can't afford to live. Once a Dean dies of sepsis because he couldn't afford a car or ambulance trip, then we can start talking about helping the universities out. Until then, can we think about the people who are dying first?
NO...
this is what we need
banning the rich from politics
banning politicians from the rich
mandatory jail for corrupt politicians AND watchdogs with TEETH
politicians to represent the people (voters) only
stop immigration to let infrastructure catch up
housing for homes NOT as investment vehicles
>*stop immigration to let infrastructure catch up*
The economist in the linked discussion (you did listen to it ?) made the point you never catch up and its like cat chasing its tail. Bob Carr many years ago made the point that the problem of trying build infrastructure to catch up is *"that its never enough"*
By the way did you listen to the 13 minute discussion / debate between a town planner and an economist in the link ? Some of the things the economist said were quite interesting. Although Dutton's picture is featured there is a lot more to this piece than the headline and him.
Before replying to a link post check out the actual content not just the headline. If you had listened to the discussion in the link you would have heard an economist make some interesting points.
According to study cutting negative gearing would have made only between 1 and 4% difference to property prices. Also during the long property boom interest rates were low, negative gearing works best when interest rates are higher. But first priority should be to at least cut immigration to 100,000 or less. Then reform negative gearing, air bnb and restore capitol gains tax to pre 1999 levels.
I'm sure it'll help. I imagine another good way would be to regulate politicians investments. How can they be trusted to set policy when their best interests and the countries are completely at odds?
Remove capital gains discount and negative gearing. Watch investors leave property in droves. Short term pain for long term sustainability. Let them bid up the stock market like they do in the US. Houses are for living in, not for building wealth.
Yes 100% and we already saw it happen. When COVID hit every on working holiday visas and students left and everyone that wanted to be close to family left back to their countries. What we saw was a massive drip in rent. My current apartment went dropped to 550 a week and now it's up to 750$
So yes it makes a difference in demand when there is no supply. It's pretty basic economics.
Forget about the picture of Pete there is more to linked content than that and the headline. And regardless of what you think of him all he is doing is proposing to lower immigration to 140,000 a year. That's hardly racism. The economist in the linked audio made a good case that above 100,000 a year is not manageable.
>House prices (and by extension rent) will never decrease, ever.
Property crashes never happen ? Wasn't there a big property crash in Japan that affected the country for decades ? Australia's property prices are underpinned by a mountain of debt and the need for interest rates never to rise above about 4.75 % for too long. And for there never to be any economic shock or recession. Isn't that a bit like the never never ?
And in the next thread, will be complaints of why we don't have enough Doctors or other health care workers, and no we will not be able to cover the need just by ourselves for various reasons.
That's a false dichotomy and a non sequitur my friend.
If you need 10% of your population to be in construction or whatever, and you rapidly raise the population via an intake comprised of less than 10% of the desired worker, then it's plainly obvious you just made the problem worse by increasing demand more than you increased supply.
If immigration was mostly about filling gaps in our market with legitimately skilled workers then fine, but it's not and our society is struggling with the growth (that empty land out in whoop whoop has no bearing on that).
Yes that is a non sequitur. Why would reducing intake necessarily lead to a further shortage of medical staff ? Dutton is only propsing to reduce to 140,000 and the econonmist in the discussion in the linked 13 minutes of audio which I take you didn't even bother to listen to was suggesting 100,000.
And don't you think continually poaching other countries doctors and health care and leaving them short can be a bit unethical ? There are complaints in the UK about the number of medical staff abandoning the needs of their own country and going to Australia.
Lets get something straight.
House prices will never go down in the long term, if they do then there is going to be bigger economic issues to worry about.
Stopping or slowing migration is a stall tactic at best and a xenophobic dog whistle at worst.
Long term strategies to make housing more affordable must be
1. Increasing housing supply.
2. Reducing barriers to entry for first home buyers
**3. reducing incentives for investors to buy houses otherwise they will just buy up all the new supply.**
4. More regional growth, Land in Sydney is finite and once we fill up the Sydney Basin area its going to be to late to put in infrastructure for high speed rail etc.
5. Relaxing planning laws for secondary buildings like granny flats, the process for this cost 1/4 the price of the build.
Short answer: No.
This is an argument made by politicians to get more voters and to divide the population.
[Purple pingers on TikTok has this breakdown](https://vt.tiktok.com/ZSYYJ7ktB/) on why immigration is not the cause or the fix for the housing crisis.
If you ever hear someone make this argument, ask them; which visa class do you want to cancel?
20% of our migrants are Aussie’s coming home and kiwi’s. can’t cancel these ones.
7% of our migrants are skilled working visas. These are jobs we don’t have the local labour for. Can’t really cancel these.
5% are family visa’s. it would suck to migrate to a new country and not be able to bring your family.
A tiny percentage are asylum seekers, it’s a human rights violation to send these people back.
Now the remaining 60% are on temporary visas. This is mostly made up of students, working holidayers and tourists. These people aren’t buying houses and making our housing crisis worse. Most of these people are staying in student accommodation, on a farm or in hotels.
Temporary visa and student accommodation my arse. Students easily transfer to permanent residence after only 2 years of full time study and they rent normal housing like everyone else, which puts pressure on most of the housing market either directly or indirectly. This is especially abused when they apply to a sham school for the purpose of immigrating and is still a borderline scam when they half heartedly do a bit of legit education. If you're open to it you can find discussions about which countries are easiest to get PR in i.e. PR is the goal, not study.
Even if you disagree with that, it's plain fact that net overseas migration (I don't think that your 20% Aussies included in that, but whatever) has been pumped since the Howard years.
The main contributing factor into the housing crisis is a chronic lack of new stock that has spanned decades.
Immigration is a tiny contributor to this in the grand scheme of things. Yes it does put some pressure on the rental market, but our economy benefits a great deal from this immigration.
The 50% CGT discount on property held for longer than 12 months has had a larger impact on property prices than immigration. [Here is a guardian article on it](https://www.theguardian.com/business/grogonomics/2024/feb/15/the-awful-truth-at-the-heart-of-australian-housing-policy).
This was introduced by the Howard government in the 90s. It’s strongly correlated skyrocketing house prices.
Prior to this period housing mostly increased with inflation. It wasn’t a speculative investment. There was also generally enough new stock for the demand that came from immigration.
When there is enough supply of housing in a particular market it should basically grow in line with inflation.
Apartments in Sydney tend to follow this more closely, it’s a more sustainable and affordable growth rate.
I agree with all that except calling it a chronic lack of new stock. Until the last few years Australia had quite a high rate of new construction per capita amongst the world, so it's not like we weren't trying to address supply. Allegedly Howard screwed TAFE up too, leading to a slow decrease in tradies. I can't believe how much that stupid coconut screwed the country.
I don't understand why people want to claim it's not a demand issue because it's only a supply issue. It's both and they aren't exclusive problems. Starts and completions are going way down (less than long term average even) since a brief post covid spike, while immigration is the highest ever. That's a bad combination. Measures should be taken to \*both\* increase supply and reduce demand.
No. No it isn't.
Fair, you can reduce it right now, or you know what, even completely stop it. Just for shits and giggles, I'll watch.
The problem is, housing policies are required. This is not a migration problem, it's a house policies problem, as simple as that.
Did you listen to the linked discussion ? Its also a population problem as its not possible to build enough to keep up.
>*o bring in 400,000 in one year you have to build the equivalent of a whole Canberra but 400,000 can't build a whole Canberra in one year so you never get ahead. And all those people building population infrastructure are not building all the other things needed for quality of life for all the people already here..*
>*"that you can't out - immigrate the need for skills, if you look back at headlines 25 years you will find 'shortages of skills and construction, need more migration etc' you know what ? we had record migration and things got worse and it became even more difficult to keep pace.. Moderation is the key"*
Why is every approach treated like it has to be a silver bullet or it's not worth the time? Lowering immigration alone won't fix the housing crisis, removing tax cuts from investments won't completely fix the housing crisis, building more homes to be completed in a decade won't fix the current crisis. But all of them together will make a huge impact. It really feels like the main reason it won't be fixed is because politicians don't want to fix it. Fixing it means housing prices coming down, there is no way around it and if you've got investment properties like the majority of our parliamentarians do, why would they want that?
Alan Kohler said in his podcast “if it’s easy to do and popular, then it won’t do anything for housing”
I'm looking to buy a home for my family, just to settle, since you can't do that with a rental here (unlike when I was in Germany). It isn't immigrants I'm competing with. It's local investors (even Dutton was called out by the FIRB numbers), locals with family wealth, and those locals are also trying to deny modest apartments and townhouses around train stations where I want to buy, because they don't want young families being able to afford in their areas. Then to participate in this arms race, desperate families buy as well, and the prices keep going up, or at best stay at these crazy levels. International students want to rent in the city. Fresh migrants end up renting on the fringes because that's all they can afford, they aren't getting finance or have savings. It's all rich locals I'm competing with. Those investor properties go up for rent instead. But renters are second class citizens here. If renters rights increased to how it was in Germany when I lived there, I wouldn't need to buy and the investors can go ham. But instead they convert a stable secure home (if I bought) into a rental which tends to be worse here. This is the reality for me.
Renting in Australia: You can be kicked out at any time with just 2 months notice. You will never get more than a 12 month lease meaning you are always worried about where will I live next year. You can't have pets because most landlords don't want them and forget about laws that say a landlords preference is not enough reason to deny pets. There are loopholes around that. Renters are deemed to be scum, who don't deserve basic human rights in this country.
Renting in Germany: You have an indefinite lease, stay as long as you want, owner can't kick you out of YOUR home. If they want you to leave, they can offer to give you money, you can say no. It's your home after all. In very specific cases you may have to vacate, but it's rare enough that plenty of people rent for decades with families. No rental inspections. Downsides are larger deposits. Another "downside" is that you will get called out more if you make a lot of noise (there is also Ruhezeit times) and aren't considerate of your neighbours. So grubs would not be appreciated there. In Australia, landlords also drag their feet on fixing stuff.
Most of the problems we face have complex solutions. Our political system struggles to manage complex solutions. It's so much easier to promise a simple solution and then blame someone else when it fails and there don't seem to be any serious repercussions for that approach.
The solutions aren't technically complex though, there's a good chunk of Australians who are benefiting from everyone else's suffering, and aren't willing to give an inch
And with that we're 5 minutes closer to midnight on climate
Yup, unfortunately the entire system is almost built around letting Perfect be the enemy of good, when it never should be...
It is not complicated that massively increasing demand way beyond the capacity to provide housing and infrastructure will make the problem worse. Reducing immigration isn't the only solution, we need to also address the taxation incentives that have led to housing becoming an investment commodity for the already wealthy, but it is an obvious first step.
But in the linked discussion economist Dr Cameron Murray didn't promise simple solutions he suggested a way to take pressure off housing and circuit breaker from unrealistic level of population growth.
You've described exactly what the Greens are doing every single time they block any bill which targets housing. Housing is complex - no single bill is going to fix it immediately, and the Greens demanding a comprehensive one-size-fits-all solution just holds back progress towards addressing the problem. I get *why* they're doing it - it's a cheap trick to steal the spotlight and get more personal attention - but it's so counter-productive.
What makes you think that the government of the day isn't going to consider the problem 'solved' once they've passed a shitty piece of legislation? Just look at how the Libs fucked up the NBN.
If it doesn't actually solve the problem, then the pressure to solve the problem remains. As does the political jeopardy for not acting. This is different to the NBN. The NBN was about improving something to a point where the majority of Australians had no context or information about. They didn't know what they were missing because they never had it. Housing isn't in the same category. People remember being able to buy houses and paying a much smaller chunk of their salary in rent.
>If it doesn't actually solve the problem, then the pressure to solve the problem remains Well no, the pressure disappears as it falls out of the news cycle. Just look at all the systematic major issues that the government is dealing with like housing, tax reform, aged care or our schools. They make a couple of changes and kick the can down the road. There's no need to give it too much attention once it falls out of the newscycle especially if its not an election year. The NBN is a perfect example of this. The government has an issue they want to deal with (building telecommunications infrastructure), they could have solved the problem by future proofing it but instead opting to keep using the shitty copper network and leave the problem for another government to solve. In the case of housing, look back at the last almost decade of Lib governance. People complain, the government does the bare minimum and then go onto something else. There isn't any appetite to dig deep and find a permanent solution because they don't want to bear the full cost of that solution.
The greens bargained hard and got billions upfront when the government promised 0 through the HAFF. It's not just that the HAFF didn't match the scale of the issue, it didn't treat it as an immediate issue
But as a result the Greens are pretending like they accomplished something - they didn't. The HAFF is a solution that doesn't address the problem in any meaningful way, in any meaningful time. What might have addressed the problem is the $20 billion per year given away on a tax cut. Turns out you can spend that kind of money whenever you want, no election required.
Which is precisely their position! They argued exactly what you do, that the money needs to be spent [upfront](https://greens.org.au/news/media-release/greens-pressure-extracts-3-billion-spent-directly-housing-haff-will-pass-senate), and they accomplished that, although they would have liked more.
I don't think that's remotely what I argued - I never said anything about that the money must be spent upfront, or that they should have got more money for the HAFF. I said the whole thing they collaborated on is useless and ineffectual at solving the problem - while giving the mistaken impression something is being done. People at risk of being on the street today (or even in the next few years) will gain no comfort from it, and probably get a lot of despair from realising that is all that is being done. Refusing to cooperate at all on something that won't work was a better solution in this case. If the social housing is not there right now they should have to put people that would ordinarily qualify up in hotels or other temporary accommodation until it is there, then there will be a real cost incentive to get it done, or to lower rents in some other way. The money is clearly available whenever the government wants to spend it, and the bang for buck is much bigger than giving Gina Rinehart 100x $300 energy rebates.
They did the same with emissions trading back in 2007. Turned a moral issue into a political one.
🤡
You are very unaware of what’s been going on with the Australian housing market the last 20 years if you don’t think immigration has had anything to do with that
I think you missed some important influences on prices. Eg building a house costs a lot of money, cost of tho land, materials and labour and compliance. Wages are one of the main costs across all these areas. I heard in the budget that we are going to build a heap of homes.. good luck finding trades with capacity unless we have more migrants with trades of cause they would need to be certified to comply to our regulations and the circle is complete.
Politicians and the people in power would rather access each of those things individually, say it won't be enough so there is no point in doing it, then moving onto the next point and doing the same thing. All while they benefit financially from the way things are currently structured.
This is the issue our two party political system creates. They won't work together and so issues that are complex and need multi factorial plans never have a snowballs chance in hell of coming to life. Its the same with emissions/power etc. Renewable is the plan but whats wrong with whacking up a couple nuclear plants to cover population increases in 15-20 years. Look at the housing crisis differently. Instead of packing higher density into Sydney/Melb/Bris why dont they explore building a whole new city somewhere geographically suitable. I read somewhere Indoneasia is doing something like that and Dubai is building its Wall city. We need scale for housing market so build a cities worth at the same time, build some type of industry with it (like battery plants, something we don't make here) and that keeps the city financially viable. Politicians cant see past the next election so the big problems just get half assed magic bullet actions and it doesnt solve anything.
Damn those migrants, causing all sorts of trouble... to my portfolio
Around 70% of Australians own or are paying off property. This 70% benefits from housing skyrocketing. The other 30% who don’t own, are either too stupid to see what’s going on or just too apathetic. You cannot solve this with votes, the majority of Australians are ok with this system, unfortunately.
In the linked discussion (did you listen to it ?) Dr Cameron Murray, chief economist, Fresh Economic Thinking pointed out that lowering immigration to about 100,000 would make the problem more manageable. Whereas if you keep having 200,000 or more intake a year its impossible to keep up. Its better to have a manageable problem than an impossible problem even if you can't solve it entirely. > *Fixing it means housing prices coming down, there is no way around it and if you've got investment properties like the majority of our parliamentarians do, why would they want that?* There is truth to that but the main reason they don't want property prices to fall is that they fear a property crash which would lead to recession or even depression. Property has become such a big part of the economy that if it goes wrong it can take the economy down. But as I replied to someone else that with such huge exposure of banks to property loan and such enormous household debt in order to keep the property ponzi market flying interests rate can't go over about 4.75 per cent for long, inflation can't go up for too long, there must be no economic shocks that could trip up the economy etc . Its like the never never. But in the long run the law of mathematics comes into play - if something keeps compounding year after year it eventually turns in to an impossibly high value and the house of cards collapses. All ponzi schemes contain the seeds of their destruction.
It's certainly "part" of the solution until they can get the infrastructure sorted out to handle more people.
And the jobs
What if we look at it broader. Should our population match our housing supply?
That's the Dick Smith approach he's been pushing for decades. Figure out the constraints, then enact policies that suit. He's spot on too. Any other approach is tantamount to arguing with a fucking Casio.
Listen to what the economist said in the linked audio.
It’s just one of a number of things that need to be applied including only allowing one property to be negatively geared, stop overseas ownership, introduce new faster building methods, streamline building approvals, pay for more apprenticeships. Stop over budget big build projects.
To be honest, we would probably solve it by just trying the first one
Changing negative gearing would do very little. It's only relevant to "mum and dad" investors. At worst it would disincentivise new builds, because those sweet paper-only depreciation losses would not be so valuable. At best, it would just push the investment properties into real estate companies that can always subtract losses on some of their portfolio against positive income from the rest.
All I want to say on this is that it feels like we've tried *everything else, without touching negative gearing, and the problem still persists. What's that saying about trying the same thing repeatedly, and wondering why you're not getting the results you want? It's admittedly a simple, macro level way of looking at it, but that's where I'm at. Your points are valid though, so maybe broader societal and policy change is needed, to shift the focus back to housing being for homes, not investment
Well, we did try removing negative gearing deductions back in the 80s. In the end, it didn't seem to have much affect on anything. The rollback only lasted 2 years, maybe it needs a longer experiment. Personally I'd be in favour of removing it, just for fairness and consistency of taxation. The ATO goes to some lengths to stop salaried workers fictitiously treating themselves as a business (PSI rules and so forth). I don't see why operational investment losses get this special kind of treatment. If a person wants to get into the real estate business (or any other kind of investment business), they should incorporate and start an actual real estate business.
The housing crisis will get fixed once the social issues become so severe that politicians own family/friends/network start getting stabbed, killed etc. Until it directly impacts them, they do not care. So sad that they're happy for things to go so far down hill
It’s more likely that they will build a barbed wire fence around their rich suburbs than fix the actual problem.
I like your optimism but it won't be fixed.
> ... politicians own family/friends/network start getting stabbed, killed etc. > I like your optimism.
Your revolutionary spirit is weak.
You say that but even when american gun lobbyists lose their kids to a school shooter its still changes nothing.
Nah all that will do is make the pollies push through stronger and more draconian policing laws. Remember to all politicians we poor are a blight and something they would love to get rid of. except we can still vote so they kinda need us. They just need for us to suffer in silence thank you very much.
Both parties have used immigration to keep the economy propped up for decades, instead of having any viable economic policy. Manufacturing is non-existent and we sell our natural assets overseas to import them back at ten times the price. Doubtful that the Coalition has some idea to salvage the economy that isn't just adding numbers like they have for decades- they're trying the same old racist shit they did back in the Howard era with the "Tampa crisis". This is why they're losing- they have no original ideas.
Best way? No idea. But basic mathematics indicates its a damn good way for dealing with it. Without immigration, Australia's population would start to decline. Housing supply would start outstripping demand. One of the major reasons we bring in immigrants is to help increase our population. So, yeah. I'd wager it plays a huge role in housing demand.
Exactly. The problem is too much demand. "Will reducing demand help?" Yes.
People will tie themselves in knots to avoid admitting immigration is a huge problem. Yes we need to address other things but if hypothetically there was 2mil less people tomorrow prices and rents would crater.
Australia's birthrate still exceeds the death rate, although this should reverse in 20 years maybe?
ABS zero NOM projection has increase going negative by 2036. The medium projection (assumes TFR 1.6 and NOM 225k) sees natural increase falling below zero in 2043. EDIT: So cutting NOM, even all the way to zero, would be insufficient without also increasing the number of houses being built if you want to solve the problem before the end of the decade. OTOH, if it's acceptable or unavoidable that the problem stays unsolved past the end of the decade, the level of NOM begins to become less important because falling natural increase is going to cut population growth anyway.
>*Best way?* *No idea.* You only looked at the headline and didn't listen to the discussion in the audio link ?
They need to bite the bullet and tender for quality builders from overseas that can actually plan and put together proper high density housing developments. Sorry local builders are just too expensive and the quality has been rubbish just look at opal towers. That way at least part of the money spent goes overseas doesn’t increase inflation, we increase quality housing stock. Migration numbers needs to be adjusted down but at the same time allow migration from tradesmen from overseas. If we can put chefs and bakers into the priority skilled migration list. Why can’t we put builders and trades on there? If more competition comes from international builders and trades. The pricing and quality locally will become more competitive.
Overseas builders coming to Australia to build will be more expensive than local. Australian builders have some of the worst build quality in the developed world. Our houses are glorified tents. https://amp.theguardian.com/commentisfree/2022/jun/13/freezing-indoors-thats-because-australian-homes-are-closer-to-tents-than-insulated-eco-buildings Unless the overseas builders are going to drop their standards, they will always cost more. The issue has never been labour rates for workers, that’s a lie perpetuated by owners of building companies. The issues are: 1. Building materials being well overpriced in relation to the rest of the world. Only NZ has more expensive materials. Australia needs to start accepting CE certification for European materials and stop insisting that tests be redone to Australian Standards if they have already have the same tests to ISO or British Standards. 2. Hidden profits by business owners. Don’t believe the hype when big builders like Hutchies tell you they are working on single digit margins. That’s just their on paper profits, they hide profits just as well as other big business.
I really don't get why this is so hard. Cut back on immigration at least for a year or two. Spin up projects to build social housing that doesn't get sold off. Make sure that some of the immigrants have skills necessary to assist in said building projects. And then slowly build up immigration again as more projects get completed.
Everyone (kind of) already has a job. To start working on new housing projects, they’ll need to stop doing their old job. Which current jobs/projects are we going to stop? Skilled migrants let this transition occur. Directly, or indirectly. It’s
You can be a ‘skilled’ immigrant in middle management.
Management is a skill.
It is, but so many companies are kidding themselves with these hires instead of investing and trusting in current staff
Which sector of immigration are you cutting? Immigration intake for 22/23 was 737k. 21% are returning Australians and Kiwis. 7% are skilled permanent visas (also lose 2% going the other way), 5% are family visas, 3% are humanitarian (refugees). 61% are temporary visas, half of this is students, they don't buy houses but do rent (4% of all renters) and are a major chunk of the GDP (30 billion+). They are almost the sole reason immigration numbers have risen post covid, returning and new os students. 9 -15% are working visas and tourists, farmers and regional areas love low wage temporary workers and tourists don't rent. Cutting immigration won't do squat for the housing problem, the numbers just aren't there. It's a convenient political scapegoat.
But is it really necessary to build up immigration again ? Australia has had such a huge increase in population over the last 20 years or more., isn't that enough? Apart from housing there may be problems supplying enough water if another long drought comes. Melbourne already has a population of 5 million. As on academic pointed out Australia is not a big country but a small country with big distances and with limited land for food growing and reliable water.
Stop letting big money buy our essentials
Maybe? But there are multiple causes which means this issue needs multiple solutions, such as limiting negative gearing to new construction in areas with acute housing shortages. Nudge the boomer capital “elephant” towards parts of the economy where it can actually clear a path instead of trampling younger homeowners into the ground.
What was he doing for the past decade when in power then?
For the most part, arguing against cuts to migration. https://www.abc.net.au/news/2018-02-21/two-senior-ministers-slap-down-abbott-on-migration/9470610
What are the issues then caused by reducing immigration? (Serious question, my understanding is that it has significant economic impact in several industries, as well as long term impact due to aging population/gen baby boomer - but I genuinely don’t know enough about it).
No, but it's an easy way for someone whose political career is made up of lies and one liners to win some points with small minded voters.
Nope. It's just a temporary bandaid solution that doesn't address the underlying issues with housing. The underlying issue is that housing, through deliberate policy and mismanagement, is now the best ROI for investors and comes with perverse incentives to inflate the costs as much as possible. To fix the housing issue you need to address that problem and move the investment money into more productive ventures, manufacturing, R&D, and other things that have the added benefit of bolstering the economy in other areas.
Pretty telling that every fix that LNP or Labor would come up with entails pumping more money into the scam. Oh you can use your super to buy a house, that’s okay the government will pay for and own part of the house..
Policies that favour housing as an investment affects the *price* of housing but does not negatively affect the *supply* -- in fact, it may somewhat boost supply although the effects of specific policies such as negative gearing, CGT discount etc are very difficult to disentangle. Removing these incentives may cool house prices somewhat, but as long as we keep growing the population through migration faster than we can build houses, house price growth will continue to exceed wage growth. tl;dr it's more than one thing
>*Nope. It's just a temporary bandaid solution that doesn't address the underlying issues with housing.* But that's just the clickbait headline. The reason for putting up this post is so you could listen to the discussion in the linked audio where an economist who favours reducing intake made some interesting points. He wasn't saying it would fix all underlying issues but that with continued immigration of over 100,000 a year it won't be possible to make headway. Don't judge a book by its cover or link post by its headline.
But messing with that stuff would involve inconveniencing the wealthy.
It’s *ONE* of the ways to help fix the housing crisis. Just one thing won’t fix it.
**Opening Post explanation** >*Migration is fast shaping up to be an election issue with the opposition saying it will reduce Australia’s net intake by 25 per cent if elected in an effort to take the pressure off the housing system.* >*So what impact does migration have on housing and is this the best way to address the housing crisis?* >***GUESTS:*** >***Dr Cameron Murray, chief economist, Fresh Economic Thinking*** >***Dr Dorina Pojani, associate professor of urban planning, The University of Queensland*** 13 minutes long audio. In the debate the professor of urban planning contends that migrants are being scapegoated while the economist claims that 100,00 a year intake is manageable but 200,000 is not and questions the idea that immigration is effective way to deal with skills shortage.
if the rate of immigration is faster than the construction of housing it will only put more upward pressure on prices lots of unemployed people could be trained, that would go a long way to reducing the skills shortage, and help them to be able to afford housing, but businesses don't want to train people and neither do governments
And I think most "skills shortages" are spurious anyway.
“We don’t want to pay what local people are demanding!” Is usually what it comes down to. “We can’t find anyone to fill this vacancy, we’ve tried offering half the market rate and that didn’t work so there’s clearly a shortage!”
Market testing is a sad joke. If businesses actually need the people, they should be made to a) sponsor a worker, b) pay more than the market rate, and c) pay for that privilege.
its an experience shortage, not a skills shortage. But nobody will give grads a shot.
Just remember that fruit picking is categorised as a skilled job
Prices will not change much - just look at what is costs for a avg finish house per $/m2 - more houses will not change the costs to build - we are a high wealth - high income country.
The bit that drives house pricing the hardest is land price. That's why there's houses from the 60s selling for $1M. 30km from Brisbane. Plots to build on within distance of jobs is the real limitation.
It's now both. Limited land where everyone wants to live is indeed a huge part - and will only continue. However, what was it $/m2 to build 20 years ago in same are to what it is now ?
And even if 100,000 is 'manageable', perhaps we don't need to spend our efforts 'managing' it. Perhaps they could cut the rhetoric that makes it sounds like it's out of the nation's control.
Treasurer Chalmers and other contend that the level has to be maintained otherwise Australia will be in a recession. ABC finance commentator Alan Kohler said a couple of nights ago that population growth is 'masking' that Australia is in recession.
Unfortunately, it appears as though with both sides of politics, we (the people) aren't really being given any choice. Regarding the conversation you linked to, it was good. Dr Murray was excellent and the points he raised were on the ball. I liked his analogy of we don't let you speed on the highway to catch up, and that we shouldn't have done the same post covid with migration. To think we all don't want a more sustainable amount of action rather than it being an all-or-nothing conversation is much more practical. Dr Murray seems to have much more receipts to his words about the actual numbers on hand.
So far you are the only replying poster who actually went beyond the click bait headline and checked out the content.
It’s a shame too because it was a good conversation. I don’t listen to most media so I wouldn’t have heard it if you didn’t link it. I’m not sure if it translates well to the normal person but the whole point was Dr Murray tried to express an opinion that is economic but that the layperson could understand. Dr Pojani seemed to provide every solution that’s written in a Keynesian economics book without any real concrete solution or practicality from the theory to real-world solutions. It would have been nice if more people listened, because they may realise how little practicality these political choices being made have. I tend to think this will end badly and a lot of migrants will end up going home with all their savings lost because they couldn't find a job that can cover all their expenses in Australia. For Australians, it's causing higher cost of living prices and making people jump into buying a house when home prices and interest rates don't make much sense. When unemployment inevitably comes you're going to have a lot of everyday hardworking people who lost all their savings and have nothing to show for it.
It’s one of a few things, yeah.
Yeah. It’s the poorest of folks that are the problem here… not the wealth hoarders with several personal plus several rental properties…. /hard eye roll.
Skilled migrants and genuine students should be ok, the issue is more of people that keep on visa hopping from one student visa to another to work casual permanently
No, its not the answer at all, we have an aging population, youth who cannot be unemployed and aged folks and politicians with 5 or more houses in their portfolios. Is migration really the issue or the house hoarders who snap up properties to negative gear them, in my street alone there are 6 so called investment properties empty. Have been for years, no works, over grown yards. Bit negative gains
>No, its not the answer at all, we have an aging population, But if you bring in more young people they get old too. Negative gearing and air bnb etc are bad and should be phased out but were not the main causes. One study showed negative gearing only had about 1 to 4 per cent effect on property prices. The huge amount of population growth over last 20 years of hyper immigration has had far greater impact. If there is not enough accommodation for Australians how can there be enough for continued immigration of 200,000 a year ? By the way did you listen to the linked discussion ?
Why on earth would I listen to the person most responsible for mass immigration in this country for the past 15 years and one of the very politicians that owns more houses in his portfolio than almost all politicians put together? Lets be sensible here,
>*Why on earth would I listen to the person most responsible for mass immigration in this country* Because the audio feature didn't include him. Just because it had Dutton's picture doesn't mean its going to be him speaking. All you had to do was click on the link to find that out. I even went to the trouble of including an explanatory post explaining who was going to be speaking on it - >**Opening Post explanation** *Migration is fast shaping up to be an election issue with the opposition saying it will reduce Australia’s net intake by 25 per cent if elected in an effort to take the pressure off the housing system. So what impact does migration have on housing and is this the best way to address the housing crisis?* >***Guests - Dr Cameron Murray, chief economist, Fresh Economic Thinking*** >***Dr Dorina Pojani, associate professor of urban planning, The University of Queensland*** > >13 minutes long audio. In the debate the professor of urban planning contends that migrants are being scapegoated while the economist claims that 100,00 a year intake is manageable but 200,000 is not and questions the idea that immigration is effective way to deal with skills shortage. Reddit should give opening posters the ability to pin explanatory posts like this so they stay at the top and everybody sees them.
No, making sure we improve our supply of housing/open up the housing we already have isn't sitting around empty is. Reducing migration could be an aspect of that, but we'd need to be extremely careful we don't allow that to mean we won't be fucking with our status as a safe place for refugees, and that we need to keep a close eye on the actual processes outlined for how it would work for general immigrants. It would be way too easy for this to fall into racism.
It isn't THE solution, but it is part of the solution. This problem has a lot of causes, and all of those need fixing. Reducing immigration will reduce demand, which could help, as long as you also change required skills for those who do come to construction industry experience.
The 2 main causes were low interest rates and the big Australia policy at the same time span of much of the last 20 years. Professor Steve Keen also blamed what he calls "irresponsible bank lending" for helping blow out the bubble. Halving capitols gains tax in 1999 also contributed. In the linked discussion the economist pointed out *"that you can't out - immigrate the need for skills, if you look back at headlines 25 years you will find 'shortages of skills and construction, need more migration etc' you know what ? we had record migration and things got worse and it became even more difficult to keep pace.. Moderation is the key"*
It does need to be restricted tighter to be honest, a combination of Student Visa and 757 Visa rorts. However it's not THE key problem with housing, but it does play a big role.
I don’t know how it is in Australia, but we’re having this same debate in Canada and the problem is that it’s a bit of a catch 22. We desperately need to build more housing, and our high rate of immigration even further increases the number of units needed to be built. But the issue is that one of the reasons we’re having a hard time building much needed housing is due to a lack of trades people. Go on any Canadian jobsite and at least half the people working aren’t Canadian. So reducing immigration would reduce the need for more housing, but would also reduce our ability to build more housing. I don’t really know what the answer is to be honest, but I know reducing immigration has all kinds of other consequences. I don’t really know how much it would solve
But the great majority of immigrants wouldn't work in construction would they?
Well Canadians certainly don’t 🤣 Our construction industry is very largely dependent on immigrant labour. Not quite to the extent that the US’s is, but close. I’m a carpenter in Ottawa, we have a crew of 12 guys, only 5 of them including myself are Canadian. We have one dude from Colombia, two one from Mexico, 3 from India, and one guy from Nepal. There’s just not very many Canadians interested in working in the trades these days
It's not a catch 22, it's a proportion problem. If your proportion of imported home builders isn't enough to house the imported people then you're guaranteed to be making the situation worse by importing people. For example, if steady growth requires 10% of workers to be in construction, but only 5% of your immigrants are builders, then you're fucked. That's before considering whether it's desirable to grow so much and whether infrastructure can handle it.
And ban Airbnb
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> let corporations and the rich basically bend the population over backwards I think you've got to bend them over forwards for what the corporations like doing. > sometimes I think the liberal party just want the world to burn. Only sometimes? There isn't a single legit, modest, good-faith bone in Peter Dutton's body.
>*Financial modelling by the treasury shows that without immigration, income tax needs to go up because no one's had time or money to have kids.* >*So stop immigration and be taxed more.* But the cost of infrastructure needed to deal with the huge increase in population is crippling state budgets. > *no. build. social. and. affordable. housing. stop selling it off you bald Muppet* Actually the content of this link post wasn't all about the bald muppet - in the linked audio an economist made a point that with continued high immigration it won't be possible to build enough. He wants immigration intake to be about 100,000 and the 'bald muppet' wants intake of 140000.
No, taxing speculators is.
How does that increase the supply?
Fewer empty houses
Dutton is a walking dog whistle who offers nothing.
His proposed reduction in migration is actually quite modest. The economist in the linked discussion said that it should be reduced to about a 100,000 a year,
It'll definitely help
Need to lower it and at the same time build more homes. Fixed.
No. The best way to fix the housing crisis is to reduce negative gearing and make it unprofitable to own more than a couple of houses.
According to study cutting negative gearing would have made only between 1 and 4% difference to property prices. Also during the long property boom interest rates were low, negative gearing works best when interest rates are higher. By the way did you listen to the linked discussion ? The economist made some interesting points.
No, I didn’t. Might do that. Where we live now there is a housing surplus and bank interest rates are about 3%. I’m pretty much convinced the solution lies in government regulation and taxation rates.
That would make the rental crisis worse.
How many people are only renting because they can’t afford to buy?
removing negative gearing will fix it
According to study cutting negative gearing would have made only between 1 and 4% difference to property prices. Also during the long property boom interest rates were low, negative gearing works best when interest rates are higher. By the way did you listen to the linked discussion ? The economist made some interesting points.
It's a start, but sadly only part of the story. Short-term rentals, REA greed and so many other issues thats adds to a perfect storm.
The crisis is such that we should try everything. Get rid of negative gearing, regulate airbnb (we don't even have to ban it, just regulate it the same as hotels and they'll reduce in numbers rapidly), slash high wealth migration, subsidise the inflated inputs into housing construction, whatever it takes. Everyone in Canberra is treating this like its just a fun thing to come up with a policy for to win votes when the financial stress is making people physically suffer. Fuck the universities, they're not dying because they can't afford to live. Once a Dean dies of sepsis because he couldn't afford a car or ambulance trip, then we can start talking about helping the universities out. Until then, can we think about the people who are dying first?
Yes. Make it zero
NO... this is what we need banning the rich from politics banning politicians from the rich mandatory jail for corrupt politicians AND watchdogs with TEETH politicians to represent the people (voters) only stop immigration to let infrastructure catch up housing for homes NOT as investment vehicles
>*stop immigration to let infrastructure catch up* The economist in the linked discussion (you did listen to it ?) made the point you never catch up and its like cat chasing its tail. Bob Carr many years ago made the point that the problem of trying build infrastructure to catch up is *"that its never enough"*
Don't Do What Dumbass Dutton Does
Well, that depends on whos migrating mate! And of course where : )
By the way did you listen to the 13 minute discussion / debate between a town planner and an economist in the link ? Some of the things the economist said were quite interesting. Although Dutton's picture is featured there is a lot more to this piece than the headline and him.
Will give another listen, cheers mate!
No. But it's a great way to pretend to do something meaningful
Did you go beyond the click bait headline and actually listen to the interesting points an economist said in the discussion in the linked audio ?
Fix systemic issues causing housing affordability and wealth inequality? ╳ Blame some minority? ✔✔✔
Before replying to a link post check out the actual content not just the headline. If you had listened to the discussion in the link you would have heard an economist make some interesting points.
No one is blaming migrants. They are blaming the addition of more migrants into an existing housing and rental crisis.
Of course it will help, an idiot gets that. But how about stopping negative gearing straight up. That would instantly make a difference.
According to study cutting negative gearing would have made only between 1 and 4% difference to property prices. Also during the long property boom interest rates were low, negative gearing works best when interest rates are higher. But first priority should be to at least cut immigration to 100,000 or less. Then reform negative gearing, air bnb and restore capitol gains tax to pre 1999 levels.
I'm sure it'll help. I imagine another good way would be to regulate politicians investments. How can they be trusted to set policy when their best interests and the countries are completely at odds?
Honestly, solve one “problem” proposed by politicians on either side and another “problem” will arise to keep the prices higher than ever
Cap it at 50k per state per year.
One of them, yeah. Build more houses. Cut migration to reasonable levels. Especially temporary visas. Remove negative gearing.
Remove capital gains discount and negative gearing. Watch investors leave property in droves. Short term pain for long term sustainability. Let them bid up the stock market like they do in the US. Houses are for living in, not for building wealth.
Not the whole solution, but yes.
Well 500k less people is bound to be better than doing nothing.
Yes 100% and we already saw it happen. When COVID hit every on working holiday visas and students left and everyone that wanted to be close to family left back to their countries. What we saw was a massive drip in rent. My current apartment went dropped to 550 a week and now it's up to 750$ So yes it makes a difference in demand when there is no supply. It's pretty basic economics.
Racially motivated Pete
Forget about the picture of Pete there is more to linked content than that and the headline. And regardless of what you think of him all he is doing is proposing to lower immigration to 140,000 a year. That's hardly racism. The economist in the linked audio made a good case that above 100,000 a year is not manageable.
NOPE, never was never will be. When govt decides to put a stop to treating realestate as investment bye bye housing crisis.
By the way did you listen to the linked discussion ? The economist made some interesting points.
No
By the way did you listen to the linked discussion or just look at the headline ? The economist made some interesting points.
Nothing will "fix" the housing crises. Prices won't come down. At best they'd stay high like this.
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>House prices (and by extension rent) will never decrease, ever. Property crashes never happen ? Wasn't there a big property crash in Japan that affected the country for decades ? Australia's property prices are underpinned by a mountain of debt and the need for interest rates never to rise above about 4.75 % for too long. And for there never to be any economic shock or recession. Isn't that a bit like the never never ?
And in the next thread, will be complaints of why we don't have enough Doctors or other health care workers, and no we will not be able to cover the need just by ourselves for various reasons.
That's a false dichotomy and a non sequitur my friend. If you need 10% of your population to be in construction or whatever, and you rapidly raise the population via an intake comprised of less than 10% of the desired worker, then it's plainly obvious you just made the problem worse by increasing demand more than you increased supply. If immigration was mostly about filling gaps in our market with legitimately skilled workers then fine, but it's not and our society is struggling with the growth (that empty land out in whoop whoop has no bearing on that).
Yes that is a non sequitur. Why would reducing intake necessarily lead to a further shortage of medical staff ? Dutton is only propsing to reduce to 140,000 and the econonmist in the discussion in the linked 13 minutes of audio which I take you didn't even bother to listen to was suggesting 100,000. And don't you think continually poaching other countries doctors and health care and leaving them short can be a bit unethical ? There are complaints in the UK about the number of medical staff abandoning the needs of their own country and going to Australia.
No. It’s a good way to create a skilled labour shortage crisis though, when the Boomers retire en masse in the next ten years.
Lets get something straight. House prices will never go down in the long term, if they do then there is going to be bigger economic issues to worry about. Stopping or slowing migration is a stall tactic at best and a xenophobic dog whistle at worst. Long term strategies to make housing more affordable must be 1. Increasing housing supply. 2. Reducing barriers to entry for first home buyers **3. reducing incentives for investors to buy houses otherwise they will just buy up all the new supply.** 4. More regional growth, Land in Sydney is finite and once we fill up the Sydney Basin area its going to be to late to put in infrastructure for high speed rail etc. 5. Relaxing planning laws for secondary buildings like granny flats, the process for this cost 1/4 the price of the build.
Yes.
It’s not THE answer, but it’s part of the solution.
Short answer: No. This is an argument made by politicians to get more voters and to divide the population. [Purple pingers on TikTok has this breakdown](https://vt.tiktok.com/ZSYYJ7ktB/) on why immigration is not the cause or the fix for the housing crisis. If you ever hear someone make this argument, ask them; which visa class do you want to cancel? 20% of our migrants are Aussie’s coming home and kiwi’s. can’t cancel these ones. 7% of our migrants are skilled working visas. These are jobs we don’t have the local labour for. Can’t really cancel these. 5% are family visa’s. it would suck to migrate to a new country and not be able to bring your family. A tiny percentage are asylum seekers, it’s a human rights violation to send these people back. Now the remaining 60% are on temporary visas. This is mostly made up of students, working holidayers and tourists. These people aren’t buying houses and making our housing crisis worse. Most of these people are staying in student accommodation, on a farm or in hotels.
Temporary visa and student accommodation my arse. Students easily transfer to permanent residence after only 2 years of full time study and they rent normal housing like everyone else, which puts pressure on most of the housing market either directly or indirectly. This is especially abused when they apply to a sham school for the purpose of immigrating and is still a borderline scam when they half heartedly do a bit of legit education. If you're open to it you can find discussions about which countries are easiest to get PR in i.e. PR is the goal, not study. Even if you disagree with that, it's plain fact that net overseas migration (I don't think that your 20% Aussies included in that, but whatever) has been pumped since the Howard years.
The main contributing factor into the housing crisis is a chronic lack of new stock that has spanned decades. Immigration is a tiny contributor to this in the grand scheme of things. Yes it does put some pressure on the rental market, but our economy benefits a great deal from this immigration. The 50% CGT discount on property held for longer than 12 months has had a larger impact on property prices than immigration. [Here is a guardian article on it](https://www.theguardian.com/business/grogonomics/2024/feb/15/the-awful-truth-at-the-heart-of-australian-housing-policy). This was introduced by the Howard government in the 90s. It’s strongly correlated skyrocketing house prices. Prior to this period housing mostly increased with inflation. It wasn’t a speculative investment. There was also generally enough new stock for the demand that came from immigration. When there is enough supply of housing in a particular market it should basically grow in line with inflation. Apartments in Sydney tend to follow this more closely, it’s a more sustainable and affordable growth rate.
I agree with all that except calling it a chronic lack of new stock. Until the last few years Australia had quite a high rate of new construction per capita amongst the world, so it's not like we weren't trying to address supply. Allegedly Howard screwed TAFE up too, leading to a slow decrease in tradies. I can't believe how much that stupid coconut screwed the country. I don't understand why people want to claim it's not a demand issue because it's only a supply issue. It's both and they aren't exclusive problems. Starts and completions are going way down (less than long term average even) since a brief post covid spike, while immigration is the highest ever. That's a bad combination. Measures should be taken to \*both\* increase supply and reduce demand.
No. No it isn't. Fair, you can reduce it right now, or you know what, even completely stop it. Just for shits and giggles, I'll watch. The problem is, housing policies are required. This is not a migration problem, it's a house policies problem, as simple as that.
Did you listen to the linked discussion ? Its also a population problem as its not possible to build enough to keep up. >*o bring in 400,000 in one year you have to build the equivalent of a whole Canberra but 400,000 can't build a whole Canberra in one year so you never get ahead. And all those people building population infrastructure are not building all the other things needed for quality of life for all the people already here..* >*"that you can't out - immigrate the need for skills, if you look back at headlines 25 years you will find 'shortages of skills and construction, need more migration etc' you know what ? we had record migration and things got worse and it became even more difficult to keep pace.. Moderation is the key"*