Well, of course:
No ceiling to housing prices in sight yet
HOUSE prices in Melbourne and Sydney are tipped to rise in coming months, defying concerns that rising interest rates will dampen the heated sector.
“Concerns”? Dampening the sector is a large part of the point of the decision – but of course, that’s not what’s going to happen. The Reserve Bank has precisely one method of reining in inflation, and it simply isn’t working, no matter how many times they push the interest rate button. It’s still too tempting for investors to outbid first home buyers, and easy enough to pass on the increased mortgage payments through increased rents. The only people who can’t do that, in fact, are the young people presently being priced out of ever owning their own home…
The problem is one only the government can seriously tackle. Give incentives to investors to build, and disincentives to investors to take houses away from home buyers. Rather than the reverse, as at present.
Not that either major party will, of course – they’re terrified of the political ramifications of first homes becoming more affordable, because that means their going down in price. As in, voters with these homes apparently losing money. There are too many young families who’ve just scraped to get onto the first rung of the ladder: they’ve gambled on prices going up, and they’ll be damned if they’ll let anyone take that away from them. Those left behind? Too bad.
That’s why the government’s happy to pretend it’s all up to the Reserve Bank, and it’s nothing to do with them. Even though the Reserve Bank only has one button it can push, and it isn’t working…