Dear rehctub,

Well by now - you can see that there's a very wide range
of opinions as to what's causing the housing price
problem in this country. All sorts of experts, including
former politicians, with
various points of view covering a very wide range of
dieas. Here's two more links - that even contradict
each other:

http://www.smh.com.au/comment/grey-money-from-china-helps-blow-our-property-bubble-20140928-10n7a8.html

And -

http://www.abc.net.au/news/2015-02-17/berg-you-cant-blame-foreigners-for-high-house-prices/6125500

Fox,

LOL, as OLO's Number One supporter of the endless 'diversity-that-Australia-has-to-have' you'd post anything to hide the evidence of negative consequences of over-ztalous immighration policy.

It is incontrovertible that large scale immigration is ramping up demand and prices (and taxes and council rates!). That is the elephant in the room that is not being discussed. But why not?

Like the body in Deliverance, the evidence keeps surfacing that young working Aussie couples are not being able to afford the children they wanted and planned for because they are being forced to shoulder the burden of infrastructure, welfare and Medicare for too many migrants.

That could explain why there is that unexpected large spike in abortions by women in the early twenties to early thirties. The goal of housing and family keeps hopping away from them and despite their best laid plans.

Well it does seem there are a variety of views on this issue.

Foxy, I wonder if you could clarify what reason Sydneysiders as a whole have to be upset by skyrocketing house prices? Not meaning to be offensive, just wanting to see good honest debate on the topic. As I mentioned in my post I am originally a Sydneysider. Having sold my last Sydney property only a few months ago, I was certainly happy with the price growth. I imagine anyone who owns in Sydney is quite happy with the prices growth, be they mortgaged or unencumbered.

As to a possible solution to the affordability would be policy related. The state government could put in place a specific planning provision that provided tax concessions and planning expediency for first home owner developments. Restrictions could include a price cap on final sales price (eg $500k) and restrictions that it can only be on sold for the purchase price + applicable CPI increases. Also a restriction on the properties having to be O/O by first home owners for the next 20 years. These provisions would be similar to the old SEPP 5 that addressed elderly and disabled housing issues.

Of course this solution would be at state government level (keep in mind it is the state government taking in all the money from stamp duty on the Sydney property prices) and therefore not as exciting to the media as the circus that is federal government (both government and opposition).

Negative gearing was last abolished or suspended during 1985-1989 I believe. During that time Sydney rent prices increased. This certainly doesn’t help those trying to save a deposit for a first home. Any reliance on abolishing negative gearing to ease housing affordability relies on one or both of two assumptions.

The first assumption is that demand will decrease, as investors choose to invest in areas other than property. However many Australians invest in property for reasons other than negative gearing. Rightly or wrongly, there is an inherent sense of safety that people find in property over say, shares. The second assumption is that supply will increase as existing investors divest their negatively geared properties in favour of other investments.
Is it more likely that investors will just slightly raise rents (as happened in 85-89) to cover the shortfall left by no negative gearing, thus making overall housing affordability worse for those still renting? Additionally, the last set of ABS data based on finance statistics (April 2015), showed that for overall lending for Sydney properties, showed that finding for O/O properties was 1.44 times that of funding for investors. So investors may contribute to raising prices, but are surely not the only cause.

As to foreign investment, the FIRB already restricts the amount of foreign investment. While a popular public sentiment in Australia is often to blame issues on foreigners or migrants, the few who do flout the FIRB rules and don’t get caught (those that do are forcibly divested – ie. The Government sells their property) are unlikely to contribute a significant amount to any price increases.

My personal view is the majority of the perceived housing affordability issue seems to stem from supply and demand. In that case the only real way to address it is to provide a separate market for those affected, hence my SEPP policy suggestion in the previous post.

I believe there is omething seriously wrong when the whole economy centers around buiding houses that must be pupurchased. They must have the biggest and the best regardless.

Dear Hedgehog,

There are many factors that may partially explain the
increase in house prices.
The following link I gave earlier:

http://www.globalpropertyguide.com/Pacific/Australia/Price-History

There are quite a few other links that I've given on this
discussion as well. If you haven't read them - you may also
find them of interest.