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Housing fix? Doctoring the supply : Comments
By Karl Fitzgerald, published 18/4/2013If this boom continues, finding a place to call home will not be possible without sacrifices no other generation has been forced to pay.
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Posted by Rhrosty, Thursday, 18 April 2013 10:13:04 AM
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Here is an interesting piece of taxes on new homes in my area, albury wodonga.
http://hia.com.au/media/~/media/Files/MediaMicrosite/Media%20Releases/VIC/Taxes%20Crippling%20Housing%20Affordability%20in%20Albury%20Wodonga%20-%20VIC.ashx Posted by Chris Lewis, Thursday, 18 April 2013 10:18:51 AM
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True to form developers will pursue their own interests and rightly so, developers are meeting the demands of consumers in a free market economy. However, there is no mention in your article of the fundamental issue which is driving demands on the property market. Every 3 years, Australia is growing by over 1 million people - the size of Adelaide! Though this is a dream for developers, for those who "are renting dingy apartments for $1600 per month" and have to save $70,000 for a deposit, well, it is tough for some of us and impossible for many. It is my opinion that a stable population will make a difference, relieving cost of living pressures like rents and mortgages. Politicians are not talking about the fundamental issue which is our rapid population growth. I entirely agree with you that "property ownership is heralded as the bedrock of democracy". Let's talk about the real issue and help create a more egalitarian democracy.
Posted by House, Thursday, 18 April 2013 10:19:28 AM
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From the link posted by Chris Lewis,
<Taxes Crippling Housing Affordability in Albury-Wodonga A national study released today in Wodonga shows that one third of the cost of a new house in Albury-Wodonga is taxes, levies and charges. ... The single biggest issue driving the housing affordability problems facing Australians is the level of taxation built in by all levels of government,” said HIA Regional Executive Director for Victoria, Gil King at the launch. “The price of a home in Wodonga is on average made up of 36% government taxes, charges and levies. In dollar terms, that’s around a whopping $143,000 on an average price house and land package in Wodonga.” “Across the border in Albury the problem is even worse, with tax being 38% of the price, making up around $162,000 embedded in the cost of an average house and land package.” “As well as inflating the purchase price of a home, these taxes become built into a mortgage and in the case of Wodonga, add on average an additional $250,250 in interest to the life of a loan or in other words, an extra $834 per month - it’s a double whammy for home owners.”> Added to that is the pressure on housing prices from the record immigration number for the 'Big Australia' Julia Gillard claimed she was opposed to, but welshed on immediately. The article indulges in the rhetoric of idealism and disregards important facts. Posted by onthebeach, Thursday, 18 April 2013 10:40:22 AM
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Even with the debate of new housing stock versus old stock. The point missing from the article is amenity. Sure, it used to be that starter homes were purchased further out from the CBD. But with the old version of 'further out' there was still a chance of being near a train line or driving on roads that weren't yet congested to oblivion. Young people are right to now eschew this option in our modern capital cities because no government is interested in providing the public transport that would allow low stress mobility.
The apartment option solves the transport problem but what is the longevity of single bed apartments when people begin to have families. Also, Australia does not have a history of building many quality apartments that might be truly considered as long term propositions. Instead they are too 'investor only' focused, whack 'em up then get some singles and students to fill them. Posted by pedals, Thursday, 18 April 2013 10:52:41 AM
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Yes housing is absurdly unaffordable and it's even more absurd that governments have done nothing about it. I was dismayed when mean prices shot up to 200,000 in the early 2000's then they doubled again and now in Perth where I live they are $500,000. The culprits are clear; some have been pointed to by bloggers here:
1/ Negative gearing - abolish it on all but new homes 2/ Capital gains - increase it on speculative gains 3/ Wealthy superannuants - tax them at least 30% on speculative gains. 4/ GST on building products and services also had an impact; it should not be increased. 5/ Banks' unscrupulous lending practices - 'NINJA' loans. Make them and mining companies pay higher tax on excessive profits. But the horse has already bolted, the speculative gains have already been made and many are facing speculative losses. I feel for those young wage earners when the boom busts and we have declining house prices as the US has done. Maybe mass default / bankruptcy will be the result and the banks will be the losers for once - about time they took a hit. Posted by Roses1, Thursday, 18 April 2013 11:39:42 AM
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And going without heat and food, just to be able to make ends meet, or having to vacate in just sixty days, when the greedy landlord, decides he/she wants to sell.
Going without essential nutrition has health implications, as does going without winter heat.
These same people may become premature high care nursing home residents, where they will cost the tax payer not less than $140,00.00 PA!
And given affordability issues, this trend can only ever expand and magnify.
Fortunately, old folks vote and are set to become a larger and larger demographic!
And very little appetite to forgive all those, who combined to create this crisis.
We need to jettison negative gearing and replace that with a capital gains tax, on all property speculation. Tax breaks ought to be directed at new housing development only, that stamp duty and other state Govt housing development charges be made illegal, by an act of federal parliament, using its external powers, to impose this requirement.
Failing that, a withheld GST could compel compliance.
We should be building at least 140,00 new homes every year, just to match current demand, and put downward pressure on house prices.
Incidentally, the cost of building a steel frame four bedroom home, with a small solar power system, a 5,000 gal water tank, and a fifty year structural guarantee, is still under $140,000, in subtropical Queensland?
Where winter heat is rarely required?
Think, the cost of keeping one pensioner in high care for just one year, would pay the build cost of a brand new home!
Talk about being penny wise pound foolish!
Rapid rail would make numerous new housing developments viable and desirable. Quantitative easing that virtually doubles money supply, would allow Govt to fund the infrastructure roll-outs, force the AUD down to around 65 cents, and perhaps even allow the federal Govt to buy into the very lucrative energy business, as an adjunct to tax collection?
Rhrosty.