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Housing Affordability in 2022

When politicians want to give the impression of doing something, while changing nothing, they bring on an inquiry – or, even better, a royal commission.

The latest inquiry created in the Federal Parliament is about housing affordability and supply in Australia.

This inquiry wrapped up hearings late last year and is expected to deliver its findings some time early this year.

Clearly, they didn’t find any solutions when they held the last inquiry into housing affordability at the end of 2013, so they’ve decided to go around again.

Anyone who works in the property and real estate industry can tell you what makes housing so expensive in Australia and we don’t need an inquiry to reveal it.

The problem is the high cost of creating new housing in Australia.

The reality is that about half the cost of a new house and land package in Australia is made up of taxes, fees and levies from all three levels of government.

But instead of reducing those charges, which would go a long way to solving the affordability problem, state and federal governments keep adding to the costs of building new homes, while looking for another scapegoat to blame for the issue.

Last time they held a federal inquiry into housing affordability, it was foreign investors.

They were made to shoulder the blame for pushing Australian buyers out of the market and pushing prices up.

This gave politicians an excuse to raise even more revenue from the housing market, by introducing new taxes on foreign investors under the guise of improving affordability.

How politicians love to introduce a new tax in Australia, especially one that slugs every politician’s favourite cash cow, the housing industry.

So, did this crackdown on foreign investors make houses more affordable? No

It’s just the type of cynical move we have come to expect from our politicians where they want to give the impression of doing something about an important issue, while changing nothing.

The formula is …

Hold an inquiry

Find a scapegoat, an unpopular minority, and

hit them hard,

while effectively changing nothing.

Sound familiar? Well, if you were a fan of the biting political satire of the eighties, Yes Minister, it’s a solution taken straight out of its playbook.

With the quintessential public servant, Sir Humphrey Appleby explaining to Private Secretary, Bernard, just how the Government can be seen to be making a change without actually making a change.

You call an inquiry. That can take up a year or more.

The inquiry ends by making a recommendation for a Royal Commission, and that can take up another year or two.

In the end, the Royal Commission finds an unpopular minority to be the scapegoat for the problem.

That way no one is really put out, you can claim you’ve done something to fix the issue, but in reality nothing changes.

Let’s hope the recommendations from the latest Australian inquiry into housing affordability offer a more effective solution than they have in the past.

The Chair, MP Jason Falinski, does give the impression he has some understanding of the reality of the problems – i.e. that taxes and imposts, and regulation and red tape, have made it slow and expensive to create a new dwelling in this country.

We live in hope that perhaps this inquiry will be the one to make some recommendations which do actually improve housing affordability for everyday Australians – by increasing supply, and by reducing the red tape and costs involved in creating new homes.

In a perfect world, if you eliminated all those government taxes and charges on housing, a new home that sells currently for $600,000 could be sold for $300,000 or $350,000.

Wouldn’t that be good news for first-home buyers?

But don’t get your hopes up.

It will never happen. Politicians, sadly, will never give up all that lovely revenue they rip out of the housing industry.

They will continue to pay lip service to housing affordability while making decisions which only make it worse.


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