Individual, we actually need MORE investors at the moment, as we have a rental crisis (ie not enough houses owned by someone else to rent out). As other posters have pointed out, its a supply and demand issue, and in this case demand is outstripping supply for both investors and home buyers. To solve it, either demand needs to decrease (slow or stop immigration, at least for a while), or free up more land for development. Create smaller living spaces, not larger (more houses in the same area). Home buyers also need to be realistic about what they can afford. Buy a 2 bedroom house instead of a 4 bedroom one. You can always do a reno later (if you choose the right property to start with). Make do with 60's fittings (as distasteful as they can be) instead of having to have your house looking like it came out of the pages of a glossy mag. People's standards are simply too high. When I was little, we used to have bats fly in and out of the holes in our bathroom wall. Mum and Dad lived with that for about 15 years before they could afford to do a reno. Eventually, I will do a reno on the little 2 bedroom house that I own, and update the narrow limegreen benchtops in the kitchen, and open up the living space so the we have some room to move, as well as add a spare bedroom. But not before I can at least afford the additional repayments that I'll need to make, and that mightnt be for some time yet. Until then, the kids will just have to share a room (it didnt kill me).

Country Gal,
I wholeheartedly endorse your argument re "buy what you can afford". Of course investment is one of the most important factors in an economy however, how do you suggest the rental crisis can be solved in this scenario. A State government sells off most of it's staff accommodation & then, when this accommdation is needed again, this same Government pays any amount of rent that is being asked for. Because of this, other landlords can now up their rents & it is this trend which then causes rent unaffordability for private individuals seeking accommodation. Do you really approve of $500.- to $1600.- a week to house a public servant ? Or $250.- to $300.- a week for a crappy room ? I don't think you'd get too many people to happily accept that. How about a couple being supplied with a $115.-/day Motel room by a Govt. department whilst their house is rented to that same Department for $520.- a week. Or how about people receiving up to $500.- rental allowance to live in their own home ? Or how about $ 500.000.- taxpayer funded 5-8 bedroom houses for $ 75.- a week. Or how about a $ 250.000.- taxpayer funded weekender. Good investments ? I'm sure that's not the kind of investment you support or is it.

Andrew Bartlett is off in ga ga land.We have a shortage of housing because we have too many bureaucrats and Govt. In NSW Govt taxes and charges add $170,000.00 to the cost of a house/land package.

Increase the supply of land,develop rapid transport systems so people can live in rural areas and abolish State Govts.Problem solved.

No individual, that is not the sort of investment that I support. Governments dabbling irresponsibly in markets almost always skews the action of those markets to determine a fair price. I didnt realise that this was happening. I dont have a problem with govts regulating markets if need be (if there are unfair market advantages to one side, for example), but if they are doing what you suggest, then their actions are only inflating the situation. Private landlords rarely make enough rent to cover the interest costs of borrowing, let alone make the capital repayments. The rents have been so low in relation to the cost of property, that the eventual result was that they were going to have to go up, or the price of houses/units go into freefall. Neither is ideal, but bound to happen when prices get unrealistic.

I have tried to avoid this thread simply because of the solecism-du-poseur (an holistic...? do me a favour!) in the headline, but in the end I couldn't resist.

It really does the Democrats no favours to be associated with such a poorly thought-through piece. Given the author has never actually worked outside the protection of the public service, though, I suppose it should be predictable.

Housing is an emotive issue, but that does not excuse woolly thinking. By definition, every house that sells is affordable. To an individual, or a family, or a developer or a landlord. There is absolutely no mystery to it.

And as Realist points out, we have (as a society) gradually upgraded our accommodation, and with it our expectations, as we are individually occupying more housing space than ever before.

The answer is not subsidies, or grants, or unnaturally low interest rates. We simply build new properties that meet the demand of the expanding aspirations of our population. Why is that so difficult to understand?

The people who balk at this are either "single-issue fanatics", such as the ban-immigration people, or the reduce the population people, or are straight-out NIMBYs, who object to other people having what they regarded as a right, thirty years ago.

If we let the market decide, prices will settle at a level where demand and supply are in balance, just as they do in every unregulated market.

Mr Bartlett is doing exactly what every other politician is doing, and that is turning a straightforward market issue into a political football. Exactly as he accuses his political opponents of doing.

If he's around watching this, Mr Bartlett might like to point out to us how his policies avoid his own charge of being "[q]uick fix, one off solutions... designed more to deal with a political problem than a policy one."

Many of you blame young people who want to live in palaces for rising house prices. There is no question that the average house is more lavish than 30 or 40 years ago. If this were the main explanation, though, you would expect house prices to be higher, but the land component of the house price to be smaller, especially since block sizes are considerably smaller, on average, than they were then. A previous article on OLO

http://www.onlineopinion.com.au/view.asp?article=4811

shows that real building costs are about the same as in 1973, but that the cost of the land the house is built on has skyrocketed, up by nearly 700% in Sydney. The government has restricted supply by abandoning decentralisation and by rationing land for housing, then boosted demand with government sponsored population growth. The resulting high house prices buy acquiescence from existing homeowners towards neoliberal economic policies, which, of course, suit the rich "donors" to the major parties to a T.

The only way to restore housing affordability is to give the politicians real pain at the ballot box (by putting incumbents last) until these growthist policies are reversed. Senator Bartlett's policy might help some people, but would see all of us heavily taxed to provide windfall profits for the owners of land on urban fringes, since the land can't simply be expropriated.