Alan Kohler on Monday night hosted a terrific segment on the ABC’s 7.30 Report exposing politicians pretending to care about housing affordability:
ALAN KOHLER: For a start the average block is now a ninth of an acre, no backyard and prices have been expanding faster than block sizes have been shrinking.
The typical Australian dream property is now all but out of reach for all but the well off…
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SIMON KUESTENMACHER: Politicians, of course, shed crocodile tears about it’s so sad that house prices are so expensive and we’ll give you $10,000 of first-home buyer’s grants which drive house prices up because everybody has more money. It’s a silly game where people pretend that they care.
ALAN KOHLER: That silly game has been going on since 1966 when the original first-home buyer’s scheme was introduced by the Menzies government.
Before that, policy was focused on increased supply. After that it switched to boosting demand and there’s now yet another federal parliamentary inquiry into housing affordability, run by Liberal MP Jason Falinski but there’s a problem with it.
Well, Jason Falinski, every paragraph in your terms of reference refers to supply of housing. Are you even capable of putting into your report, making any other conclusion that the problem with housing affordability in Australia is supply which happens to be a state and local government problem, not Commonwealth?
JASON FALINSKI: This inquiry, I can tell you already, recognises that this is a multi-factorial problem, and the solution is going to be a lot of different things over a period of time.
ALAN KOHLER: You told Four Corners that first-home buyer schemes have pushed up prices and the beneficiaries of that have been the sellers, not the buyers, even though they’re aimed at buyers. Are you going to put that in your report?
JASON FALINSKI: I can’t, as you appreciate, pre-empt what the report is going to have in it but I’d be surprised if there isn’t a paragraph or two or even a recommendation around the impacts of stimulating demand, whether it be for a particular group of people or not, that has on house prices overall…
BEN THOMPSON, REAL ESTATE AGENT: We are seeing quite a few first-home buyers who are taking out large mortgages.
Anecdotally, I think, some of it is to do with the fact they haven’t been spending a lot of money over that last 12 months so they have been able to increase how much they can put aside but also the old bank of Mum and Dad. We do find that people are being helped out to have an increased deposit…
ALAN KOHLER: For his part, the man who oversaw the first of the three housing booms, as treasurer, blames the Reserve Bank for the current one.
PETER COSTELLO: The Reserve Bank got it wrong.
ALAN KOHLER: In what way?
PETER COSTELLO: It said that it could hold the three-year rate at 0.1 per cent out to 2024. It couldn’t…
ALAN KOHLER: RBA Governor Philip Lowe declined an interview but in a rare press conference earlier this month he said lifting interest rates to curb housing prices wasn’t in the central bank’s remit…
And it’s not the nation’s banking regulator, the Australian Prudential Regulation Authority’s (APRA) responsibility either…
We know that the losers from the housing affordability crisis are millennials and Generation Z’ers trying to get into the market and the winners are clearly the baby boomers and they have political clout because there’s more of them…
There is 11 million voters who own a house and 100,000 voters trying to buy one…
PETER COSTELLO: If you own a house, and you’re established in a house, you don’t want a lower price for your house.
Nobody wants to go to an auction and sell their house and get a lower price. So you are right that there are many incentives for governments to keep the prices high, just as there are incentives for established home owners to keep the prices high, and that’s why I talk about the fact that this is particularly a first-home buyer’s problem…
EMMA BAKER:.. There’s been so many inquiries into housing affordability in my research career and they’re never really come up with very much and I think it’s time for a national conversation about the type of housing system that we actually want.
ALAN KOHLER: At the very least we need an end to band-aids like HomeBuilder and first-home buyer schemes and above all someone needs to take responsibility for housing affordability.
There are nine ministers for housing in this country. What are they all doing?
As I noted in my submission to the federal government’s latest housing affordability inquiry:
Let’s get real and admit that this inquiry is a waste of time and taxpayer’s money.
Australia’s governments have run numerous housing affordability inquiries over decades, including but not limited to:
- Menzies Research Centre: Prime Ministerial Taskforce on Home Ownership 2003;
- The Productivity Commission’s First Home Ownership Report in 2004;
- A Good House is Hard to Find Report from the Senate Select Committee on Housing Affordability in Australia in 2008;
- Western Australia’s Affordable Housing Strategy 2010-2020;
- NHSC: State of Supply Reports (2008, 2010, 2011, 2012, 2013 onwards);
- COAG Review of Capital City Strategic Planning Systems Report 2011 and report on Housing Supply and Affordability Reform 2012;
- Senate Inquiry into Affordable Housing, 2014-2015; and
- Parliamentary Inquiry into Home Ownership 2015.
On top of these we have received many reports from think tanks like the Grattan Institute, the McKell Institute, AHURI, and others.
Thousands of work-hours and millions of dollars worth of salaries and consultants’ fees have been spent on these reports and absolutely nothing has come from them. So what is the point of wasting more taxpayer dollars? Nothing will come from this inquiry because our politicians don’t actually want more affordable housing, since this requires prices to fall.
The whole charade is politicians and policy makers pretending to care while pumping the market through easy credit, mass immigration, or stimulus. Good on Alan Kohler for calling it as it is.