Forget about a royal commission into our banks, what Australia really needs is a full and transparent inquiry into Australian property markets. Australia’s population currently sits at 24 million. By 2026, our single households are projected to increase by a staggering 39%. A recent planning report found that, within the Greater Sydney basin, just 340,000 potential housing lots remain. What do we need to implement to ensure we have healthy cities?
Just imagine the terms of reference
There are thousands of questions and they need answers.
Why is Sydney in a pattern where we currently have the lowest amount of established homes on the market? Why are we seeing the lowest ever number of first home buyer sales? Why have the baby-boomers decided to stay put in their principal place of residence? When and what caused these changes in homeowner behaviour?
What is the impact of negative gearing on Australian residential real estate? What is the precise impact of state taxes on our property markets? Why does the federal government allow 100% of off-the-plan sales to foreign buyers? Why have foreign student numbers increased by a record 11% in the year to July 2016 and why are they allowed to purchase real estate with no price restrictions while studying? Why has the federal government never policed the sales of these properties when the students complete their studies?
What transport infrastructure needs to be built to meet this growing demand? What is the best housing practice – a principal place of residence that allows for tax deductions on all outgoings and a tax charged on the sale? Or a principal place of residence that attracts no tax deductions and no tax payable on the sale?
Why do Australian property prices always figure among the most expensive in the world? Why are governments at all levels intent on driving new red tape initiatives through businesses, yet have absolutely no accountability for the way they manage their own economies of scale?
The list just goes on and on, and the federal government doesn’t even have an appointed housing minister. Why don’t our elected politicians want to know anything about these issues? Australia does not have a single major transport infrastructure model in place for discussion. The only problem as I see it is that such an inquiry would deliver scathing findings on federal and state and territory governments. This conversation is seriously overdue, although nobody wants to start it.
Arrivals highly concentrated
Brisbane, Sydney and Melbourne remain the hotspots for new arrivals, recently capturing a record 85% of Australia’s total population growth. Sydney is setting the wrong records with workers in the age bracket 20 to 29 years packing up and leaving. Earlier this year, the NSW population soared past 7.7 million and we don’t have to guess where the vast majority of them want to live. Why has net overseas immigration been allowed to accelerate into NSW and Victoria only?
The average price of a Sydney home has jumped a staggering 44% since 2013, when real wages have only managed a 2% increase. Australia’s housing affordability is now at crisis levels. The only time that we collectively hear about such problems is in the run–up to a federal election.
There has never been a better time to hold such a real estate inquiry. It has never happened before simply because these questions fall on deaf ears.
Robert Simeon is a Director of Richardson and Wrench in Sydney’s Mosman and Neutral Bay and has been selling residential real estate in Sydney since 1985. He has also been writing the real estate blog Virtual Realty News since 2000.