Real estate rich list grows as young locked-out

By Leith van Onselen

Just as home ownership among younger Australians has collapsed, particularly across Sydney and Melbourne:

And the share of people in rented accommodation and group homes has surged:

Australia’s real estate rich list is growing as the wealthiest reap property profits. From The Guardian:

Profit margins in the real estate sector are at record highs and Australia’s richest individuals are increasingly listing property as their sole source of wealth, new analysis shows.

The analysis also suggests state governments are reaping increasingly large windfalls from stamp duty, and not matching them with social housing investment.

The Greens senator Lee Rhiannon, who commissioned the analysis from the parliamentary library, said it showed a small, powerful group was making huge profits from the property market, while the disadvantaged experienced rising homelessness and housing stress…

The analysis looked at 10 years worth of BRW Rich List entries, finding those who listed “property” as their only source of wealth has almost doubled.

Of the 200 richest Australians, those listing property alone as their source of wealth increased from 28 in 2007 to 47 in 2017…

The analysis, using Australian Bureau of Statistics figures, also showed profit margins for real estate services and property operators had hit levels not seen since before the global financial crisis, reaching 57.6% in 2015-16, compared with 35% in 2009-2010.

Before-tax profits in the sector have increased every year since 2008-09, reaching $59.26bn in 2015-16…

NSW revenue from land transfer-related taxes, such as stamp duty, had increased by almost $1bn every year since 2012-13.

In 2015-16, the state government earned $6.45bn in 207,463 separate land transfer-related transactions, the analysis said.

Make no mistake: housing is the biggest inequality and inter-generational equity issue facing Australia. The solutions are hiding in plain sight and require implementing policies that lower demand and boost supply, including:

• Normalising Australia’s immigration program by returning the permanent intake back to the level that existed before John Howard ramped-up it up in the early-2000s – i.e. below 100,000 from 210,000 currently [reduces demand];
• Undertaking tax reforms like unwinding negative gearing and the CGT discount [reduces speculative demand];
• Tightening rules and enforcement on foreign ownership [reduces foreign demand];
• Extending anti-money laundering rules to real estate gatekeepers [reduces foreign demand]; and
• Providing the states with incentive payments to:
  • undertake land-use and planning reforms, as well as provide housing-related infrastructure [boosts supply];
  • swap stamp duties for land taxes [boosts effective supply]; and
  • reform rental tenancy laws to give greater security of tenure [reduces demand for home ownership and reduces rental turnover].

MB has been banging the drum loudly for more than five years to no avail. Sadly, the best we have gotten is piecemeal solutions from Labor and Ms Rhiannon’s Greens, and next to nothing from the Coalition.

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