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Houses are for living, not for speculation (en.wikipedia.org)
submitted 1 year ago by to c/wikipedia@lemmy.world
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[–] 5 points 1 year ago (3 children)

Yup, and with more than two decades of rat-box quality appartments sold primarily as investment vehicles have pushed first-home further and further out - placing a massive burden on infrastructure to keep up.

The problem is, the vast majority of our politicians are heavily invested into the property market and are therefore disincentivised to do anything substantial to fix it.

Even those with only one property to their name, wouldn’t want to do anything substantial to cause property values to decline. They are in the unenviable position of trying to freeze property prices where they currently are for the next ~50 years or so and let society catch up in terms of buying power.

It’s definitely doable, but the risks of fucking it up greatly out-weigh the potential successes, so no one really seems willing to pick up the mantle.

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  • [–] 4 points 1 year ago (2 children)

    Slow and phased changes to tax legislation to remove incentives with suitable grace and transition periods for people to offload assets would see a dramatic improvement to property prices for buyers. The impact on sellers would be determined by the market but we could expect lower prices due to an influx of volume.

    The other issue is that Australia's economy is held up by big banks which are in turn propped up by their mortgage debts. A reduction to property values will see a downturn on the ASX. All the more reason for Australia to reinvigorate its manufacturing footprint and diversify its economics.

    Getting rich off of a property portfolio is lazy and unproductive. Try operating a business that is useful to someone or pushing the boundary of innovation. Instead we have all those boomers out there filing away their monthly statements from their property manager saying "YoU JuSt GoTtA WoRk hArDeR!" What a joke.

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  • [–] 1 point 1 year ago

    The problem is that any dramatic fall in house prices risks an absolute calamity economically as innocent people who are only working to pay off the roof over their heads find themselves underwater on their mortgage.

    Bankruptcies are painful not just economically, but also socially and mentally - which is why we really need to ‘thread the needle’ in such a way that housing costs stagnate for multiple generations, rather than drastically fall backwards.

    One other option would be to allow home owners to somehow claim primary/residential losses against their income tax - but that could likely be an imperfect solution that would probably face too many headwinds politically to ever pass.

    But the most obvious, low hanging fruit would be to roll-back Howard-era changes to Negative Gearing and Capital Gains benefits, as well as imposing restrictions on who can buy residential properties in Australia (eg. require a PR to be able to purchase a primary place of residence, citizenship to purchase additional properties).

    The problem though is that whichever political party would ever be brave enough to pass this legislation (let’s be honest, it would only ever be Labor and not the LNP), risks being absolutely slaughtered in the media, losing the subsequent election, only to have the incoming government undo said changes.

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