Poll: How do you think politicians or regulators should respond to the issue of housing affordability?

Actually my suggestion is an alternative to removing negative gearing all together.

My suggestion is to remove negative gearing but keep it for only new housing for all properties who purchased after new legislation. Since 92% of all loans go to existing stock doing nothing to add to existing stock of supply.

Also all existing property can continue to claim neg gearing unless they sell, then the property no longer can be utilized for neg gearing.

This would massively incr supply and reduce prices in an extremely overvalued Aussie market making housing affordable. The existing policy is efficient and assisted to create on of the biggest bubbles in the world. I believe we are 4th on the UBS bubble index.

Of course everyone who owns negative geared property would not like this proposal because there growth option would become redundant and only positve geared properties would prosper.

Cheers

Stimulus from the Howard government got the ball rolling on rapid price growth in the form of generous stamp duty & falling interest rates. So no more stimulus from government. Supply & demand will sort prices out. We need to educate our children how to manage money properly in school & at home. I have had this discussion with my kids, they tell me nothing has been taught at school. Appalling. I think more regulation is required of real estate agents. Removing negative gearing will only act as deflationary for housing supply. Increase stamp duty…hhmmm….ah no. It’s costly enough as is & if anything I believe this would only have a positive effect on house prices as desire creates want, in addition, equity is used to buy second property so it doesn’t directly come from the wallet. People pay for what they desire. As for making it tougher for investors to borrow, what about housing supply for renters? I don’t see this having a negative effect on prices. Forcing council development applications, the councils know their area & how to sustain a level of growth, supply & demand dictates that anyway. Cash rate increase, looks like it’s slowly coming anyway, but retail sales are still flat aren’t they? I don’t see any of these suggestions having a large impact on prices, if anything they may level off, but again supply & demand will dictate prices.

• This reply was modified 7 years, 10 months ago by  Darren.

I think it would be:
Force councils to loosen up on development applications.
Property Investment
http://propertyinvestmentagency.co.uk

Simple- consistent rollback of planning laws which will increase supply creating greater affordability, but also increase the quality of stock options available. (not having to cram yourself into an apartment/small block – but can live on larger blocks of land etc.

Look at Houston for an example of how this can work.

pascoe_82 wrote:

Housing affordability ??? Didn’t know there was a problem!!
Oh wait … Sorry I don’t live and invest in Sydney or Melbourne. As far as I’m concerned if they have a problem it’s for them and the local government to sort out… Or inevitably the market itself.

Daneo79 wrote:

Every time the Government gets involved with grants, policy changes or incentives, the market suffers unrealistic inflation, as a whole bunch of operators jump onboard to grab at the before mentioned government interventions.
*Add taxes and/ or tarrifs to ANY investor that is not an Australian Citizen.
*Create a city by city land release plan. Involving local councils but also pushing them to change local legislation to increase and improve land/housing infill and density targets.
*Relax and encourage multi-storey developments in future-flagged high density regions, but tighten the type and look of those developments to suit and fit the areas.
Take the property bull ‘by the horns’ and actually lead this country to the place we want it to be. Housing affordability is not the problem, there are still properties available for less than $100,000 in this country.
It is just the people with a sense of entitlement wanting to live on a big block 10min from the city but can’t afford to do it.

I agree with what you said!

I will get shot down here but sometimes I think the younger generation today just want everything laid out on a plate for them. When I was young I couldnt afford to purchase in the inner city so for my first PPR I had to buy outer suburb. Then leveraged my way into the area I ultimately wanted to live. Otherwise rent where you want and buy an investment property.

So easy to blame the government and/or hope the property market crashes so you can then afford to buy. Since I have been investing/buying property they have been saying the property market will crash by 50% blah blah. Same thing for the last 15 years . Yes there will be corrections but IMHO it wont be what the doomsdayers predict. I think governments need to invest more in the regional areas. Fast trains, airports etc make the regional areas ‘closer’ to the citys.

Anyway what would I know about politics.

Interesting takes on what should be done to curb affordability…

Fundamentally the real problem is not developers, or investors or the banks, but the taxation from 3 levels of government on the development of new land/units. There are 52 taxes charged to developers from project inception to the delivery of a block of land or unit to the market. In addition, the state governments have been happy to leave stamp duty rates at the same levels they were in 2010 (in NSW and Vic) whilst the median price of housing has doubled in the same period in both those states. Stamp duty for a $2 million property in Sydney is now over $100K!

The root cause of all “affordability” issues is in fact the greedy government itself. They have the public bluffed by implementing rules and restriction through APRA and spurring on the media to talk about an “affordability crisis”. Fact of the matter is, there is no affordability crisis, because in my mind if there was, the prices of property wouldn’t be moving upwards at all.

So in my mind, the solution to our affordability crisis is simple, stop the government from gouging so much money from developers and then they might be able to deliver new stock at much more “affordable” prices. We all know that will never happen

I chose “force councils…” I would prefer that councils are encouraged rather than forced but doing this does a few things.
1. If you open up enough land for development then it puts downward price pressure on land values because those selling are competing against more sellers.
2. It puts downward pressure on prices because there will be more properties being constructed.

Some strategies that council could employ would be to allow more simple multi-dwelling properties on small blocks. Or increasing the rezoning portions of what is now 100% LDR development sites to 50% LDR 50% MDR or even HDR depending upon how close the development is to transport / shopping hubs etc.

Councils could do a huge amount to increase supply if they wanted. It’s not like Australia is lacking land…but this land could be made a lot more affordable if council wanted.