I’m not an economist, so I don’t know which position is correct…
– The NSW goverment’s planning policy has led to huge housing shortages in Sydney
– Most of these housing shortages are in “affordable” areas
– Housing shortages are driving up house prices
– High housing prices and housing shortages are lowering the rate of home ownership
– High house prices are dampening population growth and driving migrants away to other capital cities in Australia.
– Therefore the NSW government needs to reform its planning policy to encourage rapid development and housing contruction, particularly in “affordable” (read: greenfield) sites around Sydney.
Another article went out today in New Matilda. Taking a national rather than local perspective, Ben Eltham argues that:
– There isn’t a housing shortage. In the 2006 census, the ABS estimated that there were 10 million dwellings in Australia, yet only 8.3 million dwellings were recorded as occupied.
– Australia has a housing affordability problem, not a housing shortage problem
– Houses have become inaffordable for many low and middle income Australian families because the market is poorly regulated. Housing taxes favour those who purchase houses for investment purposes:
“Most houses are therefore being bought by investors. As the RBA’s figures demonstrate, around a fifth of Australian houses are bought “without a mortgage” — in other words, by cashed-up investors who simply pay with a cheque. (…) Australia has one of the most skewed property taxation regimes in the industrialised world, rewarding investors and owner-occupiers at the expense of renters and those looking to buy a house. The Capital Gains Tax exemption for the family home costs taxpayers $30 billion a year, disproportionately advantaging those of us who own multi-million dollar homes.”
This is a very bizarre situation, to have two reports released on the same day saying completely different things. It’s like a high brow version of what happened in the newsagency a couple of years ago when I was putting out the women’s tabloids on a Monday morning. I opened one bundle of magazines to see photos of Kelly Osbourne looking morbidly obese – “Kelly’s obesity crisis!”. And the next bundle’s front page had a big photo of Kelly Osborne as thin as a rake – “Anorexic Kelly!”.
Like Kelly Osbourne all those years ago, both of these stories can’t be true. Or can they? Is there some kind of middle ground that explains housing affordablity in Australia? If you are interested in this kind of thing, please let me know what you think about these two reports, because I am very confused.