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Money Comment: Who is to blame for the housing crisis and how to solve it

13:42  14 march  2018
13:42  14 march  2018 Source:   smh.com.au

Australian home prices were steady again last week

  Australian home prices were steady again last week Australian house prices held steady again last week in average weighted terms.Australian capital city house prices held steady for a second consecutive week in early March, adding to the view expressed by some analysts that the worst of Australia's house price declines are now over.

Who pushed housing prices so high? We did. Who failed to do what was needed to counter the increase? Our governments. COMMENT . National.

There are a lot of folks, even many who write articles at Business Insider, who are stuck in saying that there is shared blame for the housing and credit crisis . Many know much about the crisis , but they know little about how to assign blame .

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AFL in crisis in Tasmania

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So who 's to blame ? Let's take a look at the key players. In defense of the lenders, there was an increased demand for mortgages, and housing prices were increasing because interest rates had dropped substantially.

Last week in our How I Spend It column, we featured a pensioner living on £18,000 a year in London. The reporter who interviewed her told me she Much of the personal abuse we would have deleted off the Guardian’s web pages (we didn’t open it to comments ), but we don’t control Facebook or Twitter.

There aren't many material aspirations Australians hold dearer than owning their own home - but dear is the word. There are few greater areas of policy failure.

The rate of home ownership, of which we were once so proud, has been falling slowly for decades. And as the last high home-owning generations start popping off, it will fall much faster.

We've been debating this issue for years, while it's just got worse. Yet we have a better handle on the causes of the problem, and what needs to be done, than ever.

Let me see if I can pull a lot of the elements together and give you the big picture.

Don't let anyone tell you the younger generation would be happy to stay renting forever. Nuh.

And while the hurdle of owning a home and a mortgage seems almost insurmountable to the young, jumping it is just the start of our property ambition. Most people want to keep moving up to a bigger and better home. Every promotion we get makes us wonder whether we can afford a better pIace.

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This has had disastrous results ( see ‘ Who Is to Blame for the Housing Crisis ?’), with appalling exploitation of those on lower incomes forced to accept sub-standard housing let out by slum landlords. Laurie Macfarlane. How to start a housing movement. Izzy Koksal.

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This preoccupation with the quality of our housing is the first part of the reason house prices have risen so high: ever-growing demand.

Don't forget that our newly built houses are much grander than they were even 10 years ago. And most older houses have been renovated and extended to make them better.

When two-income families became common people thought "great, now we can afford a bigger mortgage on a better place".

When we got on top of inflation in the early 1990s and interest rates fell so far, people could have paid off their mortgage faster or bought a boat, but more people said "great, now we can afford a bigger mortgage on a better place".

Who pushed housing prices so high? We did. Who failed to do what was needed to counter the increase? Our governments. © AAP Image Who pushed housing prices so high? We did. Who failed to do what was needed to counter the increase? Our governments. Trouble is, you can't satisfy increased demand for better houses – particularly better-located houses - by building more places on the outskirts of the city. And when a lot of people decide to move to a better place at the same time, the main thing they do is bid up the prices of existing houses.

Hobart housing crisis: Government rules out new taxes, regulations as stakeholders meet

  Hobart housing crisis: Government rules out new taxes, regulations as stakeholders meet The Tasmanian Government has ruled out introducing new taxes or regulations to address the state's chronic housing shortageThe Government has convened a housing summit in Hobart today in response to record low rental vacancies, soaring house prices and growing homelessness.

Janice Stanton of Cushman & Wakefield, who advises overseas investors, said that she believes money from investors in other countries will continue to flow into the U.S." This is what the Tory housing crisis looks like - Продолжительность: 4:41 Labour Party 2 042 просмотра.

Why is housing so dysfunctional in Britain? Here, we look at 10 oft-cited culprits and rate their level of blame – and we consider 10 frequently touted solutions and ask how likely they are to help us get through this mess…

One change in recent decades is the growth of the services sector and the knowledge economy (more workers knowing how to do things; fewer workers making things), which means many of the jobs have gravitated to the CBD and nearby suburbs.

So the meaning of "position" has changed from good views to "proximity" to the centre. In theory, the amount of land within 10 kilometres of the GPO is fixed. In practice, factories and warehouses can be moved further out, while detached houses can be replaced by townhouses and low-rise or high-rise units.

Even so, in every city, property prices have risen more the closer homes are to the centre.

Another source of increased demand for housing is our high population growth, caused by our policy of high immigration.

Then there's foreigners' investment in our housing, though this isn't as big a cause of higher prices as many imagine because – in principle but not always practice - foreigners are only supposed to buy newly built or "off-the-plan" homes. That is, create their own supply.

Another source of greater demand is Paul Keating's introduction of capital gains tax in 1985 and John Howard's introduction of a 50 per cent discount on the tax in 1999. This has made owner-occupied homes (which are exempt from the tax) and, thanks to negative gearing, rented-out homes, more attractive as a form of investment, relative to shares.

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“I want to see planning permissions going to people who are actually going to build houses , not just sit on land and watch its value rise. But how should we evaluate this announcement? Is Ms May right about the culpability of builders? Would her sanction solve the problem?

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So house prices are higher partly because we've acquired a second motive for home-ownership: not just the security and freedom of owning the home you live in, but also the prospect of homes becoming much more valuable over time.

Of course, increased demand leads to higher prices only if supply fails to keep up. And that's where our governments – state and federal – have failed us.

It's better now, but for ages state governments failed to do enough to permit the building of more homes on the edge of cities. We got more immigrant families, but not more homes to put them in.

Worse, state governments have allowed people in inner and middle-ring suburbs and their councils to resist the pressure for more medium-density housing – more units – from people wanting to live closer to where the jobs and facilities are.

Just last week the Reserve Bank published estimates that this resistance to higher density had added more than $300,000 to the average Melbourne house price and almost $500,000 to the Sydney price, over the past two decades.

So, who pushed housing prices so high? We did. Who failed to do what was needed to counter the increase? Our governments.

The feds failed to limit the growth in demand (by limiting immigration and fixing the tax system), while the states did too little to increase supply (by discouraging the building of new homes on the outskirts and by permitting a first-in-best-dressed mentality by people in inner and middle-ring suburbs).

Why are they allowing the proportion of home owners to decline? Because most things they could do to genuinely help first home buyers would come at the expense of existing home owners, who have more votes than the youngsters.

If young people and their parents don't like that, the answer's more pressure at the ballot box. Wheels that squeak more.

Gladstone families stuck in a one-time real estate hotspot where most homes now sell for a loss .
Less than a decade ago this coastal Queensland town was on property investor's wish lists, but today 80 per cent of homes are selling at a loss, taking an emotional and financial toll on families. Young couple Philip and Aleisha bought their first home in Gladstone in 2012, when their central Queensland town was still high on an unprecedented LNG construction boom.

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