Dr Kate Shaw provided lively moderation at last night’s public meeting on the Problems with Property – to a packed house at Melbourne’s Loop Bar.
The three speakers were:
(1) Marcus Westbury from Renew Australia who recounted taking novel steps to assist in resurrecting the high number of vacant commercial properties in Newcastle. Although speaking primarily about commercial property, Marcus highlighted a difference between investment and speculation and believed Australia’s superheated residential market was facing a major correction.
(2) Karl Fitzgerald from Prosper Australia saw tax reform as essential to freeing up the residential market, including the 90,000 properties currently held vacant in Melbourne. Land taxes, and an end to negative gearing, would help put an end to the artificial scarcity developed by those simply investing for capital gains.
(3) Joel Pringle from Australians for Affordable Housing spoke of the blight of an inadequate housing supply, whether for owner occupation or rental in Australia. He touched on the coalition he represented and noted the first home buyers’ grant was simply capitalised into higher prices.
Each speaker and a number of questioners bemoaned the low priority given to housing affordability during the current federal election campaign.
One thing that came through was Australia’s split personality on the issue of housing affordability: older people are quite happy with their escalating house prices, even though they have the effect either of locking their kids into impossible mortgages or locking them out of home ownership altogether.
Perhaps this generational tension is why the major political parties can’t confront the problem of Australia’s hopelessly unaffordable housing?
It was great to see three different groups coalesce to discuss the Problems with Property. The concern of participants at the Loop Bar that housing affordability had to be addressed and taken further was palpable.
Then, on the way home, my MYKI* ticket got rejected at Parliament Station. The MYKI system hadn’t been able to credit the $10.00 I had deposited into my MYKI account on 27 June yet. That’s correct; back in June. [!] The credit’s in there today though. Oh! That’s right! MYKI tells me it goes in to your account the day after you get rejected for having insufficient funds if you don’t travel by train often enough – unless, of course, I were to go to a 7/11 store to recharge my card, instead of having tried to do it much more conveniently on-line. [??!]
Impossibly-priced housing, plus *a hopelessly expensive public transport ticketing system which doesn’t work. Welcome to “Marvellous Melbourne” 2013, folks!
Australians are surely doomed to experience a property market crash. How deep and prolonged it will be will depend on what actions are taken by your government. As a former mortgage banking analyst, I would urge you to press for regulation that prohibits any bank that accepts government insured deposits from extending credit for the purchase of land or acceptance of land as collateral. That will take some of the speculative momentum out of the market as property prices start to climb upward again.
Of course, the long-term solution is for government to raise as much revenue as possible by collecting the annual rental value of land. You at least have some experience along those lines that may experience an awakened interest.
In the meantime, Australian cities will have to deal with a rising number of vacant properties as property owners default on mortgage loans in the wake of rising unemployment. One band-aid I recommend is for cities to create a scattered-site community land trust program to get these properties occupied quickly by owner-occupants or tenants — but out of the hands of speculators. I developed just such a plan while still at Fannie Mae back in the 2000s. If anyone would like a copy contact me.