Currently in the media there is a lot of back and forth between the State and Federal governments about who is to blame for poor housing affordability in Australia currently. (https://www.propertyinvesting.com/forum/topic/24981.html)
From what I can see the State governments accuse the Federal Govt of higher interest rates putting developers off – Even though the Fed govt doesn’t set interest rates despite Howard’s election promises.
The Fed govt accuses the states of not releasing enough land and charging too many taxes on any development. – Their response is the land is being released but developers are put off by high interest rates.So my question is given that in basic terms price is set by supply vs demand what can be done to reduce housing affordabiltiy in Australia?
Interest rates don’t seem to have much impact as if they drop then demand increases driving prices up (assuming supply is a constant). Releasing a flood of development would seem to meet demand however due to the expense of creating a new development costs would still be high.
I am starting to think that perhaps this problem is more the result of state govt charging so many taxes on development (I don’t know much about how much land is released and it would be different in each state) but I am a newbie and am probably oversimplifying….. thoughts?Okay here, this is a hard one.
If you look at Sydney housing affordabilty it is correcting daily. For the first time in 7 years good old market forces will straighten it out. No GST to create super demand for materials pre 01/07/00 and no first home owners grant to placate winging builders afterwards. Good old market forces will fix it.
Now is that a good thing for “honest John”. Don’t think so. Because when market forces finish and the battlers of western sydney, “honest Johns” aspirational voters realise there homes are not the retirement nest egg they were lead to believe there will be …….unfortunate ramifications……. is it too late to blame Costello…..hey he was treasurer…..maybe John can break out the “i’m with stupid T-shirt” during the next parlimentary sitting..
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