You can’t keep a dumb idea down! From Domain comes more non-solutions to Australia’s housing affordability woes from Ku-ring-gai Liberal MP, Alistair Henskens:
Entrepreneurs thinking outside the box to help first home buyers jump on the property ladder is one way to help solve the housing affordability problem in cities such as Sydney, according to one NSW politician.
At the launch of digital property platform Kohab, which has been described as “the Tinder for real estate”, NSW parliamentary secretary for finance, service and property Alister Henskens said private initiatives such as these were allowing Sydneysiders to build equity in real estate where they would otherwise be locked out of the market.
“I’ve held four or five properties in my life, the nature of the exercise is that you want to get into the real estate market, build some equity and use that equity to buy your next property,” he said.
“People in the 50s or 60s would go out west and travel into work. Now people are less willing to do that … they want their first home to be close to the city and that’s obviously where the highest prices are,” he said.
Hello. There’s almost no affordable housing left in Sydney, according to CoreLogic:
In December 2012 just 3.0% of Sydney suburbs had a median house value in excess of $2 million, by December 2017 the share of suburbs with a value above $2 million had increased to 18.7%.
At the end of 2017 just 3.1% of suburbs had a median unit value below $400,000 compared to a much greater 36.8% of suburbs five years earlier.
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Notice also that all of the so-called ‘solutions’ put forward by Henskens – “first home owner schemes, stamp duty concessions and entrepreneurial platforms like Kohab” – are aimed at sucking more marginal buyers into the market, thereby will increase demand and ergo Sydney property prices.
If Henskens genuinely cared about ‘fixing’ Sydney’s housing affordability woes he would argue for policies that that lower demand and boost supply. You know, obvious things like:
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].
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
