An indictment of our governments

They do insist on maintaining policies that are making housing ever more unaffordable:

A MELBOURNE house costs at least $100,000 more than it did a year ago.

Why would we address that? To hell with the consequences for society! It’s making us all rich!

Well, except for the next generation. But they don’t have as many votes as we do.

UPDATE: From the comments, here’s a suggestion that a government wanting to tackle the problem could and should consider: increasing renters’ rights at the expense of landlords’. Make it harder for landlords to raise prices, particularly ahead of inflation. Make it harder for landlords to kick tenants out. Talk with tenants’ organisations – I’m sure they have a list. After all, if we’re creating a generation of permanent renters, then don’t they deserve some of the protections the rest of us enjoy?

And every landlord that goes “to hell with this” and decides to invest somewhere else, is one more house one of those renters can buy to live in.

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26 responses to “An indictment of our governments

  1. Its all very depressing and frankly I’ve given up on saving up for a home. They are simply out of my reach.

    I’d like to see some focus on rentals too because at present rentals are constantly on the rise with tenant having few rights when compared to landlords.

  2. You know what – increasing renters’ rights at the expense of landlords’ would be a good way of making investment properties less attractive, and consequently housing more affordable.

  3. What rights would you suggest be removed from landlords?

  4. I’ve got an Aunt and Uncle who made half a mill off of the sale of their house. Love it when they complain about how hard the middle class have it.

  5. “What rights would you suggest be removed from landlords?”

    Haven’t an immediate answer to that. I’ll look into it.

    But an initial answer is this – if we’re creating a generation of permanent renters that we’re locking out of home ownership, they deserve similar protections to their fortunate predecessors. Not being at the mercy of rent rocketing ahead of inflation just because the house market does. Better rights in terms of notice before being turfed out.

    I’m sure tenants’ organisations will have a list.

  6. Good start there Jeremy.

    I think something needs to be done with the constantly rising costs of rental properties. People are paying alot of money for dumps.

    Repairs should occur promptly and property items that break down completely should be replaced brand new. Many landlords won’t replace broken equipment and often take ages to fix repairs.

    Rent increased need more intense scrutiny and ought to have to be strongly justified. You can’t just increase the rent because you know the housing market it tight. That is not a fair outcome for everyone.

    I know the Tenants Union have a bunch of ideas. I guess they deal with the in’s and out’s everyday. I’ll check it out and see if I can find anything online.

    In short though the thing is that renters have been forgotten in all of this mess. It is important that safe, affordable rental properties are available.

  7. I do believe that less fiddling with the market is better than “engineering” a solution to a problem. At the end of the day it’s all about supply and demand. If something is scarce, prices go up – both houses and rents. If you can increase your rent and still find someone to pay it, of course you would do it. You enter into a contract with your landlord – if they break it or fail to live up to their obligations, you have means to challenge it.

    We need to address the supply and demand equation. A bit of social engineering is not going to make any long term impacts.

  8. Most European countries have more rentors than Australia. My experiences in Germany and Holland suggest that the majority of people who live in the cities are rentors.
    Maybe a look at their experiences and legislation would be a good place to start.

  9. jeremy, you often talk about house prices being too high.

    how many houses do you own? If zero, do you think you are biased by your current situation?

  10. Skepticus Autartikus

    How will improving renter’s rights (which are already quite considerable) increase the supply of housing?

  11. Boz – none of your business. Regardless of my personal situation, this is a genuine problem for increasing numbers of people. And the country as a whole, I’d argue. It is completely irrelevant who is making the argument; the argument stands on its own.

    SA – In addition to simply being an equitable response to the situation where more and more people are being forced to rent permanently, it’ll reduce the number of landlords and thereby increase the number of owner-occupiers.

  12. Ahh, I see what’s happened. Some fuckwit has unleashed his wingnuts.

    LOL, the laughs never stop with these idiots!

  13. thevoiceofreason

    The govenment should slow demand by getting the investors out of the market, by cutting negative gearing and CGT consessions.

  14. Skepticus Autartikus

    Ah, what you are describing there is slowing, perhaps ceasing, supply, not demand. In other words you advocate exacerbating the problem.

  15. Uh, no, what I’m describing is reducing the demand by investors.

    First visit and this is the best you can do?

    Confessions – any idea who?

  16. You could also slow demand through cutting off immigration – yes, that actually would work. Or at least only allowing immigration into states that have demonstrated that they are able to cope with increased population through infrastructure development.

    What we really need to do is to remove the governments fiddling as a first step – kill off the FHOG, negative gearing, and allow NO capital gains exemptions for both investment or the primary living residence.

    Don’t forget that Australia for some reason has a particular affiliation with property. No government would dare look at pissing off hundreds of thousands of landlords through meddling in renters rights issues. Moreover, why deny people an investment opportunity? But make it an investment opportunity that has to stand on it’s own fundamentals without government assistance. I have friends who play the system like a flute – they started off with FHOG, lived in the residence for a year, then bought their second property to move into and rent out their original property. They continued this process and now move house every 18 months to ensure that they move back into a particular property within the 6 year criteria to ensure that each of their properties maintains it CGT free status as their primary residence. I don’t know how it’s legal but they keep on doing it. Good luck to them – they are staying within the law. It’s the law that the ass. Oh and being a landlord isn’t all beer and skittles and sitting back and watching the cash flow in – very bad tennants exist. Or if you are accused of not leasing to someone because of their likelihood of being a bad tennant (without explicitely telling the individual of course) you can look forward to legal action.

  17. $415k to $525k is a 25% increase in one year.

    based on that rate, the average house will be $1m in 3 years…whats that, 6k a month repayment? surely alarm bells must be ringing…

  18. Jeremy said: “Boz – [it is] none of your business [how many houses I own]”.

    That’s fine. In that case, I’m tempted to think(assume) that you’re just whinging because you currently can’t afford a house, and your position will change when you purchase a house, and you will gladly welcome price increases.

    However, this is a pretty callous attitude which not only thinks the worse of you, but also implies that those in a bad situation are just complaining too hard and should get over it.

  19. “That’s fine. In that case, I’m tempted to think(assume) that you’re just whinging because you currently can’t afford a house, and your position will change when you purchase a house, and you will gladly welcome price increases.”

    ad hominem much

  20. “eremy, you often talk about house prices being too high. ”

    That’s because they ARE, how on earth are today’s kids supposed to achieve the Australian dream? Who do high prices benefit? Not owner occupiers. I bought my house for $126 000 about a dozen years ago, it’s worth about $600 000 now, So WHAT? If I were to sell it I’d have to by another home at a ridiculously inflated price.

    “That’s fine. In that case, I’m tempted to think(assume) that you’re just whinging because you currently can’t afford a house, and your position will change when you purchase a house, and you will gladly welcome price increases.”

    Why? I just explained that if the house happens to be your HOME then the price increase is irrelevant. If you’re a laqndlord who owns multiple dwellings on the other hand….

    “However, this is a pretty callous attitude which not only thinks the worse of you, but also implies that those in a bad situation are just complaining too hard and should get over it.”

    Considering it’s based on your own assumption, what is your point?

  21. Boz, I can separate myself from an argument. I regularly make arguments that are against my personal self-interest – don’t you?

    Or is your question because you can’t imagine arguing anything unless it directly benefited you? Are you suddenly appearing to discuss this issue because you’ve done very well personally out of the crisis? Are you a landlord, real estate agent or banker yourself?

    It has nothing to do with the argument, of course, but it might explain why you think ad hominem is a valid angle of attack.

    But say we stick to “how it affects Boz” as the critical issue – do you have kids? How long would you like them to stay at home?

  22. “ad hominem much”

    Yes, I know it’s a poor immediate reaction.

    I have found that most political articles/discussions/actions have an element of self-interest. I’m glad that this article does not – it is a refreshing change.

    I apologise if I offended you.

  23. They continued this process and now move house every 18 months to ensure that they move back into a particular property within the 6 year criteria to ensure that each of their properties maintains it CGT free status as their primary residence. I don’t know how it’s legal but they keep on doing it.

    It’s not legal Cemil – the principle place of residence exemption can only apply to one home at a time. The six year limit only applies if you have no other principle place of residence during that six years.

  24. BTW Jeremy – the ‘world leaders’ thread below appears to be stuck. I’ve had a comment in moderation for the last few hours.

  25. Pingback: Redirecting anger on housing « An Onymous Lefty

  26. Pingback: Landlords continue to outbid homebuyers « An Onymous Lefty

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