Why are Australia's house prices so high?
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- Опубліковано 1 кві 2023
- In 1973, the average Australian house cost four times the national salary. Today, it's 11 times the average salary. Evan Thornley, Longview Chair, explains why this is happening and why the trend of increasing house prices is unlikely to stop, even with interest rate hikes.
#housingmarket #rent #money #australia #news #economy #politics
Video by Tom Compagnoni.
It is pretty difficult to argue land v population as the main driver of housing costs when we compare the housing markets of other countries with far bigger populations and less land. Of course supply and demand are factors, but surprised there is no mention of the fact that all financial incentives are heavily weighted towards promoting realestate as a means of investment and wealth creation rather than as a place to live.
The meteoric rise in housing has been supported by a steady cutting of interest rates for the last 30 years close to zero; negative gearing and capital gains tax incentives that encourage debt and speculation; two full time salaries supporting the mortgage; grants and government programs aimed at supporting buyers that ultimately act as a stimulus pushing prices further out of reach.
All this is fantastic if you bought even 5+ years ago, but it has created a monstrosity, and what do we have left to feed it to make it grow from here? What incentives can you give young people not born into wealth, to sign up for 2 lifetimes worth of debt - only to own increasingly small or poorly positioned pieces of real estate? When new entrants can no longer buy in to support the continued capital gains that drive this thing forward, then it looks suspiciously like a failed Ponzi. Or else we see ever greater amounts of wealth and property concentrated in the hands of a few, and a majority renter class emerge. In any case, we have all been complicit in this debacle, the politicians, the banks, the regulators and the public.
and after 11 months here we are... it is still very high and trying to break the record
The financialisation of housing via the banking system and poor tax policy are the largest contributors to the outrageous house price increases.
House prices are going up because "they are not making any more land". Who exactly is not making any more land? (Especially in one of the most sparsely populated countries in the world)
Its like dark ages; the landed gentry owns the houses, and the poor serfs working non-stop just to get by and pay the rent to their master.
Australia is a massive country, surely the availability of land can't be an issue?
Let's not blame the 2 income model when it's the actions of the Howard government that screwed us. Boomers loved him
Australia is fast becoming a joke. And I’m a landlord. I feel for Australians out there.
I heard it is something to do with the land evaluation by the councils in Australia.
Seems like we need more cities. Not just a dead end town, but good quality cities in good locations.
It would have been good to have listed some of the other factors that influence the demand and supply side of housing and the weight each of these would cause. Indeed what is the difference between Australia and other countries whose house prices do not continue to climb and climb.
A poor explanation with little validity. Global participants are buyers now, Excessive population growth another issue. Allowing international students to buy property. Politicians and their policies have been appalling in this space. What about NG for abnb and lack of regulation in this space...they do it in cleverer jurisdictions
"By 2030 you will own nothing" To maybe slightly improve the weather. I hope you like eating bugs.
Renter's rights which were abolished by various governments over recent years, should be reinstated.
State taxes equal 50% via-Lifetime stamp duties plus GST.
I disagree it's the availability of credit that has driven house prices up this last 30 years. Interest rates have gone down since the mid nineties people have been able to borrow more also due to bank deregulation.
The Boomer generation, the most selfish generation.
Australia is too small for all of these people in Australia.
Back in Grandparents day in suburban Sydney it really was like you would in rural areas, you save up to purchase Land and then You would build your own Kit home 🏡 on the land. Usually basic shed size then on that same land you save up some more and build a bigger home. Thank you for your video.
The 5 city policy of Oz is by design. It's far cheaper to service a compact area than have towns and Industry everywhere. In Europe the area between Melb and Sydney would house 100M people. In Oz less than a million people fill that whole area
Income growth is very sluggish though.
The intrinsic for property price and rental yield is just as perplexing as we struggle for the answers.
Govt is not creating enough spaces to support immigration. Secondly, the weaponizstion of mortgage rates and providing incentive to own real estate has contributed to price hikes
Regional areas like tweed byron are expensive place's in the Northern rivers ultra wealthy people go to byron and semi wealthy and wealthy go to kingscliff tweed heads pushing low income people out of these areas
Need to restrict mortgages to 20 years only which would reduce the leverage in the market and stabalise prices.
They're very cheap by Canadian standards.
You may be aware that Hong Kong's property price is even much higher than those in Sydney by at least 80% but the size of a 2-bedroom apartment is only about the size of one bedroom apartment in Sydney.
Japan 2.0
Sad
Owning a home is necessary, but the high rise in housing costs makes someone with an average income feel they can't afford one. However, knowledge is what separates the rich from the poor; just think of what you could do if you knew how to use passive income to buy the home of your dreams. Financial literacy is the secret to abundant wealth.
True there isn't much land left and some people do want to have a backyard to play with the kids and stuff like that but look how much airspace we have we can build up we just don't care about how many people are homeless or going through tough time you can have as many reports as you want no one cares if it's not affecting them