New: The Affordable Housing Party gets the population connection
"The Affordable Housing Party: the single issue party dedicated to solving Australia's housing affordability crisis. Australians are now living with some of the most unaffordable housing in the world, but it doesn't have to be this way! Obscene tax incentives to invest in property. Our lawmakers profit from the status quo. We opened up our housing market to investors all over the world. Australia's rapid population growth. Home buyers are paying too much to try to compete with investors. This can't go on forever!" Former journalist, Andrew Potts, Sydney, registered the Affordable Housing Party (AHP) with the Australian Electoral Commission earlier this month. Policies include: Phasing out negative gearing and capital gains discount on investment property sales; Stopping overseas buyers from buying Australian properties; Taxing properties left empty by investors; Cutting down immigration to 70,000 annually; Banning full time Airbnb properties; Ending “no fault” evictions for rental properties. Facebook page is https://www.facebook.com/AffordableHousingParty/
The text below is taken from the Affordable Housing Party site at https://www.affordable-housing-party.org/. The new party was also reported in the Murdoch Press at this URL: http://www.news.com.au/finance/money/investing/affordable-housing-party-launches-claiming-renters-and-first-home-buyers-are-being-ignored-by-canberra/news-story/2113945ffb746837789d0af8e12d7818. On the Sustainable Australia Party site at http://www.sustainableaustralia.org.au/120 it describes Andrew as " a former Australian Greens supporter and a former editor of the Sydney Star Observer weekly newspaper."
Australians are now living with some of the most unaffordable housing in the world, but it doesn't have to be this way!
In 1986 in the Inner West Sydney suburb of Dulwich Hill you could buy a newly renovated three bedroom home with a big backyard for $150,000 and pay off the mortgage in under a decade
In 2017 to buy the same home would cost you $1.5 million and you will probably be paying off that mortgage for the rest of your life.
Wages in Australia didn't increase by 1000% in the three decades since 1986. So what happened to make Australia have some of the least affordable housing on the planet?
Obscene tax incentives to invest in property
Negative gearing and the capital gains tax discount on real estate have turned housing from a fundamental human need in Australia into a giant tax minimisation scheme for wealthy Australians.
Negative gearing by property investors reduced personal income tax revenue collection in Australia by $13.2 billion in the year 2010/2011 and that number has only risen each year since then.
Our lawmakers profit from the status quo
Most of Australia's politicians are property investors. In 2016 the 226 members of the Australian Parliament owned 563 properties – a combined property portfolio worth over $300 million.
Put simply, a majority of our politicians have a vested interest in keeping this tax minimisation scheme in place and not intervening in other policy areas that are driving up property prices in Australia because they stand to benefit personally from the current arrangements.
We opened up our housing market to investors all over the world
Another factor driving up house prices is Australia's weak enforcement of its laws governing overseas investors buying property in Australia.
Even just temporary residents are allowed to buy property in Australia and there is no checking that they sell those properties when they leave.
There is also no requirement for real estate agents to check that purchasers are legally entitled to buy in Australia and only a fraction of these illegal sales are later discovered by the Foreign Investment Review Board.
At the same time domestic issues are driving capital flight out of mainland China which has seen many ordinary Chinese people choose Australia as a safe place to park their money in real estate in case the Chinese Government clamps down on their banks.
Many of these buyers do not want the trouble of managing a rental property remotely and do not get tenants in so the property will be in pristine condition when it is sold again. This is not unique to Australia. The same phenomenon has been observed in Vancouver, Hong Kong and other major cities where mainland Chinese investors have bought in large numbers.
A 2015 study of water usage in Victoria by the group Prosper Australia found that there were 82,724 homes in Melbourne that are being left deliberately empty by investors. That's nearly 20 percent of the investor owned homes in Melbourne and it is likely that there are similar numbers of deliberately empty properties in our other capital cities as well.
The 2016 Census suggest that there may be as many as 300,000 of these deliberately vacant investor owned properties across Australia- enough to house every homeless person in this country many times over.
If these properties were made available to renters there would be a significant drop in rents and house prices in Australia.
But as things stand, these unavailable properties create an artificial scarcity of housing for renters and buyers which pushes prices up even higher.
Australia's rapid population growth
Adding to the pressure on housing and infrastructure is record high immigration under the Liberals while they simultaneously demonise refugees - adding up to a quarter of a million new people each year to the country who need to find housing in Australia.
The Affordable Housing Party supports a multicultural Australia and we should never single people out by their race, nationality, culture or religion when it comes to migration into Australia. However the immigration targets that the Australian Government sets need to be at levels that are sustainable in the long term when it comes to the demand for housing, schooling, public transport and other forms of infrastructure.
We fear that Australia's rapid population growth is eroding the laid back quality of lifestyle that attracts migrants to this country in the first place, and we don't want them to be disappointed when they arrive here and discover they will spend most of their lives sitting in traffic jams, struggling to pay off huge mortgages, and probably working until they are 70 before they can retire.
Home buyers are paying too much to try to compete with investors
Fear of missing out and easy lending by the banks has driven more and more desperate people into the housing market, paying more and more ridiculous prices in the belief that property prices will always go up – but they don't and all these things combined are fuelling a dangerous property investment bubble that could send thousands of Australians broke if it finally bursts.
Australian housing is a haven for money laundering by international organised crime groups
For over a decade our federal politicians have failed to subject real estate agents, lawyers, accountants and other associated professionals with roles in the property sector to the Anti-Money Laundering and Counter Terrorism Financing Act 2006 because of push back from industry leaders despite our international partners urging us to close the loopholes.
As a result, Australia remains an attractive place for international crime groups to "wash" their dirty money in our real estate market. This sort of shady economic activity also contributes to the price of housing.
This can't go on forever
All of these factors have combined to form a perfect storm for housing affordability in Australia, but this is not sustainable in the long term.
It is now estimated that property in Australia is probably overvalued by as much as 30 to 40 percent over its real worth. So if you're buying that $1.5 million house in Dulwich Hill it's probably only worth $1 million and you might as well have just burnt your deposit.
However a controlled demolition of house prices in Australia by making property a less attractive investment option compared to other forms of more productive investment over time can prevent an economic disaster from occurring and better policies by government can make sure another bubble does not occur.