You want an inquiry? Have one on Australian real estate

I would add: how much does the real estate industry pay the commercial television networks to get all that advertising on the so-called 'news' each evening? Why is the auction clearance rate on the weekend a compulsory item in the Monday evening 'news'?

And, why can real estate people give what actually amounts to advice without the sort of licensing that financial planners have to get before they can say anything? Why are there no requirements on real estate agents to point out the costs of owning a property and the investment risks that go with the asset class, instead of just talking about the alleged benefits of negative gearing all the time?

Etc, etc.

I once read that the reason for the different treatment of real estate agents and financial planners is that there is, under the law, no on-going relationship between a selling agent and the property purchaser. I don't get why that means that lies and deception are, therefore, permitted in the relationship.

Agree with Jeremy - a PC investigation rather than an RC. But should be looked into.

Perfect inquiry for the Productivity Commission.

Excuse the cynicism but whilst the people ultimately in control of the decision to release more land for residential housing development have a conflict of interest due to their ownership of residential &/or commercial property either individually or via their SMSF or private company\businesses, the housing affordability equation will always favour those who are conflicted over the rank & file trying to achieve "the dream". Dig into the property interests of the "officials" who we elect to "govern" and you'll find a conflict of interest quicker than the sprinting abilities of Speedy Gonzalez and the Road Runner....

Stella, agree. Another factor why baby boomers are staying put is the emergence of the reverse mortgage.

"Why have the baby-boomers decided to stay put in their principal place of residence?" There are significant financial deterrents to down-sizing.

Points that most discussions overlook are:
1. Real estate agents' fees for selling a property (could be $20,000), and
2. Stamp duty payable on purchase of another one (could be $30,000).
Why would anyone want to spend that $50,000 if it isn't essential?

Another contributing factor is use of the baby boomers' home by their extended family. There are plenty of other non-financial reasons too.

State governments can do something about housing affordability by reducing stamp duty on real estate purchases. Perhaps the real estate industry could reduce fees too.

You can add real estate agents to that one. The GFC rightly saw focus on cleaning up the financial advice industry. The shortcomings of the real estate industry continue to be ignored.

An excellent set of observations Robert and you have nailed all the main issues that seem to have been forgotten in the big affordability and planning debate . Everything is linked and needs to be looked at in tandem and it exactly the direction REINSW have proposed for a National summit on housing and affordability. We will be seeking input from members for REIA to create a submission to Federal government on the issues early in the new year so your contribution would be greatly appreciated

“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?”

Heaven forbid we should ever have that !

Every time you change a light globe, put up a picture hook, paint your letterbox or plant a flower you would need to keep the receipts.

And the decisions you would need to make every day when you came home from shopping are too awful to contemplate.

Obviously new carpet would be tax deductible, but what about a door mat ? Could you deduct a mower man as a landlord could ? What about a cleaning lady ? And if you can deduct a mower man, what about the cost of the mower if you do it yourself. If you can deduct a cleaning lady then what about the chemicals you use to clean the bathroom yourself or your vacuum cleaner ?

It would solve the unemployment problem in one fell swoop. Everyone would train as accountants to deal with the shoeboxes (or tea chests) full of receipts that had to be processed every time a house was sold.

Not to mention the fire hazard of all this paper stored in people’s attics.

And would anyone actually make a capital gain after all the costs of rates, power, mortgage interest, light globes, mower men and cleaning ladies were deducted. I somehow doubt it.

Would you be allowed to carry forward the capital losses and use them to reduce any gains from shares or other assets, or would they only be deductible against future gains from selling future principal residences ?

Would anyone actually want to own a home with the prospect of all this record keeping ?

Laine, it's an interesting concept that needs to be explored. It's not that difficult as people complete such record keeping for investment property- simply the same rules would apply. The benefits of allowing tax deductions makes it more affordable for owner occupiers (I think everyone agrees we want to help this category) but it's not a free lunch as the benefit is offset by eventual CGT upon sale so effectively it brings forward the benefit from a lump sum upon sale to more evenly spread out throught the term of ownership. .

All valid questions, Robert. At a TIAA Real Assets media presentation in March this year, I recall hearing that across the globe people are moving from smaller to larger cities. There are likely to be a broad range of reasons for why this is happening - the geographically concentrated nature of some industries, for example - but I would welcome formal analysis.

The lack of any clear-cut forward planning, both to pave the way for sustainable growth and to placate market participants, is another product of short-term thinking, one of the great challenges of our current political system.