Alan Kohler has created a new scapegoat for Australia’s housing affordability woes: the brokers. From The Australian:
The political debate about housing affordability focuses pointlessly on supply and negative gearing: the Coalition says supply, Labor says negative gearing…
Both ideas are placeholders designed to give their advocates something to say at doorstops…
But they could do something about the incentives in the system.
All three types of professionals involved in housing — the mortgage brokers, the real estate agents and the buyers’ advocates — are incentivised to get prices up, and as Warren Buffett’s offsider, Charlie Munger, said: “Show me the incentives and I’ll show you the outcome”…
The agents on both sides of housing transactions are paid a percentage of the price and the financier is paid a percentage of the loan.
Home buyers are lambs to the slaughter. Even seasoned property investors only buy occasionally and owner-occupiers do it rarely. The agents and brokers do it every day, and they’re very good at manipulating the outcomes…
So all of the professionals engaged full time in the real estate industry have an incentive to push house prices up; none wants them down.
And all of those complaining about housing affordability are either watching from the sidelines, or are the lambs being slaughtered.
It’s all the brokers’ fault, hey Alan!
Housing affordability has got nothing to do with Australia’s perverse tax settings that incentivise speculators, push-up home prices, and crowd-out would-be first home buyers?
It’s got nothing to do with the foreign buyers hoovering-up homes in our major capitals?
It’s got nothing to do with the federal government’s mass immigration program, which has flooded Sydney and Melbourne with new residents, exacerbating the imbalance between supply and demand, and crowding-out incumbent residents?
And it has nothing to do with the artificial restrictions on land supply and the under-funding of infrastructure, which has caused the rampant escalation of vacant land prices?
In short, it has nothing to with supply or demand or economics or planet earth.
It’s fake news!
