So many problems here, it's tough to know where to start. Lets ignore the tax incentives investment properties and everything else and focus on purely supply + demand:
- Immigration at 659,000 people[0]
- Natural Births at 315,705[1]
- Housing + Unit construction at 180,000[2]
Assuming number of births is roughly consistent with number of people wanting to move out(I suppose there's about a 20 year gap, so lets say 250k, thats how many babies born in 2004), then there's roughly 909,000 additional people each year requiring housing, and 180,000 units of housing being constructed each year.
Then you have to wonder how long this deficit has carried on for, and just how much longer it can go on.
Something has to give eventually. I just hope we don't end up voting for nutjobs who capitalize on the fact the two main parties seem to not care about this at all because they all personally benefit from this situation.
We are on track for a million immigrants this year without the infrastructure or housing for our current population.
> Migration arrivals rose by a third compared with the previous year to hit 765,900, driven by international students and workers on temporary visas, while departures slipped to 217,100.
We are just next door to Asia with many billions of people and the massive Chinese economy. Meanwhile we’re at 26 million for the entire country.
International students and economic migrants price locals out of housing (during covid rents were at all time lows relatively), hammer infrastructure and receive the benefits of the Australian social safety net (medical, etc).
All this happens because we have a kind of entrenched criminal crony class who actively want this. Corruption is absolutely rife and practically omnipresent in this country but it’s not seedy gangsters with briefcases full of us currency, it’s a couple of “mates” giving each other ”favours”.
- There were 190,939 deaths in 2022, almost 20,000 more than 2021.[0]
- Migrant departures decreased 2% to 219,000 from 223,000 departures a year ago.[1]
So, about 400,000. I guess adding that all up, we have 509,000 net additional persons requiring housing, vs 180,000 additional housing units being produced. So, about 2.8 people per housing unit.
So I guess the next question is, how many people live per housing unit, on average? ABS Knows:
> In 2046 there are projected to be between 2.4 and 2.6 people per household on average[2]
There's still a bit of a discrepancy there, but nowhere near as bad as I thought initially.
I'd guess the only question left is "how many people would prefer to live in a less crowded house, if they were financially able"?
Not really. People would be jumping all over building new housing to solve their housing woes if that were the problem. That isn't really happening because new houses cost even more!
Realistically, the root issue is prolonged high employment coupled with our failure to bring much automation to home building. If people were desperate to accept any work that they can find, the cost of construction would be decimated, but so long as construction remains relatively unattractive work to a workforce full of choice it needs to pay a lot to convince anyone to do it; a cost that gets passed on to home buyers, and eventually renters by association.
So the problem is that people aren't being paid slave wages? Estimates are that labor is 35-40% of the cost, while materials are 50% of the cost. That seems a little high but not unreasonable
> That isn't really happening because new houses cost even more!
Could it also be a factor that wealth is extremely concentrated at the top, and the people at the top own a vast outsized share of the land. 25% of the properties in Australia is held by the top 1%. People who own a lot of property are getting fabulously wealthy when the median home price is $950,000AU, just not people who need to put a roof over their head.
Remember that materials are also largely labor cost, just the labor of all people who harvested refined and transported the materials. This work it largely similar to construction and is subject to the same growth in expenses.
> So the problem is that people aren't being paid slave wages?
As before, the problem is that people in need of housing can't afford them. If they could afford them, they'd just build a house already and the whole housing problem would be solved. But when new houses cost even more than the used houses they already can't afford...
if you keep building more house it can't be that people keep buying them as investment with no one to rent it to. Cost of construction can be fixed with policies but it's a secondary factor after supply/demand
> Having said housing problem comes from lack of developments more than anything.
I would argue it's more to do with the various incentives encouraging the financialisation of property. Low interest rates, discounted capital gains rate, negative gearing, lack of regulation around short term rentals, etc.
Ultimately, with the proven lack of political will to address these incentives, I believe that the only thing that will fix this problem is sustained higher interest rates.
Yeah nah you can inhabit it. Just geez kalgoorlie if you think otherwise. Middle of nowhere, water gets pumped in.
Housing problems come from legislation that promotes housing as an investment.it also comes from protectionist legislation that keeps the profits of housing and realestate investors safe. Long list of contributing factors. Almost entirely artificially created. Things such as but not limited to, foreign ownership laws, negative gearing, investment incentives, lack of supply, consistent growth in demand and so on.
It is kinda crazy. I thought Northern Virginia prices were insane so I moved. I always heard that Canadian and Australian housing was "crazy" too but only recently learned that it is mind-blowing crazy.
More housing will have to be built or people will have to move further from population centers. No way the average person is going to afford a $1MM house (not even large, or grand at that).
Or just wait. There is a lot of inventory out there now, and not much in the way of sales activity. Something has got to give and, as you point out, it isn't apt to be the buyers.
That is for the cities though. It's significantly lower for towns. They have their own infrastructure issues, but the option to move is still there. Seeing how hard it is to get some jobs/repairs done within a few days and based on job postings, it looks like there's work opportunity too.
Overall it'd be cheaper compared to Sydney and maybe one or two other cities, but more expensive than the rest. Plus the obvious, that living in the middle of nowhere can be quite isolating.
"middle of nowhere" is really vague here. I'm not talking about a station in WA not accessible in the wet season. There's a good number of 30k+ towns around VIC/NSW where you can find lots of social contact.
- Immigration at 659,000 people[0]
- Natural Births at 315,705[1]
- Housing + Unit construction at 180,000[2]
Assuming number of births is roughly consistent with number of people wanting to move out(I suppose there's about a 20 year gap, so lets say 250k, thats how many babies born in 2004), then there's roughly 909,000 additional people each year requiring housing, and 180,000 units of housing being constructed each year.
Then you have to wonder how long this deficit has carried on for, and just how much longer it can go on.
Something has to give eventually. I just hope we don't end up voting for nutjobs who capitalize on the fact the two main parties seem to not care about this at all because they all personally benefit from this situation.
[0] https://www.theguardian.com/australia-news/2024/mar/21/migra...
[1] https://www.aihw.gov.au/reports/mothers-babies/australias-mo...
[2] https://hia.com.au/our-industry/newsroom/economic-research-a...