Terry’s View

One media headline described it as “the great Australian housing divide” – the reality that almost everyone agrees there’s a housing crisis, yet few can agree on the best ways to fix it.

This comes from a study by Macquarie University which conducted a survey to determine people’s attitudes to housing and the causes of the many problems which beset the industry.

It found almost universal agreement that Australia is facing a housing crisis. Nine out of ten respondents agreed or strongly agreed to that. That’s not surprising, because news media is telling us that every day.

Nevertheless, most respondents still believe homeownership is possible if people work hard and save (50% of those surveyed agreed strongly with this notion and a quarter disagreed).

So, what’s behind the housing crisis, according to this survey?

The survey participants were asked to rank their top three housing problems from a list of 16 options. According to the respondents, the leading contributors to housing problems are immigration/population growth (39%), high interest rates (36%), lack of new housing supply (29%), and high property taxes (23%).

The options respondents could have selected included foreign investment, tax breaks for investors and NIMBY opposition to new development, but none of these scored highly – which is interesting because foreign buyers, investors and NIMBYs have been often scapegoated in mainstream media.

One commentator wrote: “Perhaps it shouldn’t come as a surprise that we’re so dazed and confused about the housing problem. After all, there’s a lack of genuine leadership on the issue, and enough vested interests to block any progress towards a national housing consensus.”

Only 16% of respondents were satisfied with the Federal Government’s measures to deal with the housing crisis. But most respondents were unsure.

And this reinforces for me that there is little understanding about the problems in the housing industry and how they could be fixed – neither among voters nor among our elected representatives.

A big factor is that most people’s views are influenced by media headlines and sound-bytes – and much of that constitutes misinformation.

On one day last week, my daily newsfeed had four articles which declared, categorically, what was causing prices to rise and housing affordability to worsen.

One said it was migrants pouring into Australia, another blamed the Federal Government’s assistance to first home buyers, another stated it was so-called tax breaks for investors and another said it was the interest rate cuts.

In my view, none of them was right. There’s not ONE cause of strong property prices. All of those factors play some part, but none of them is the sole or primary cause.

The housing crisis has been building for a long time. It results from years of bad government policy, which has meant that we haven’t built enough new homes and that everything that happens in the housing market takes longer than it should and costs more than it should.

All three levels of government use the housing market as a cash cow and this adds massively to the cost of building new homes, the cost of buying homes and the costs of owning real estate.

Every year governments earn over $100 billion in revenue from the housing industry through stamp duty, land tax, capital gains tax and council rates. This revenue is cocaine to politicians and they’re not going to give it up.

And that, fundamentally, is why the housing crisis will persist – until someone in government shows leadership, foresight and courage – qualities that are in short supply among politicians across this nation.