On your last point regarding the $10bn subsidy - can you clarify what you mean by "I am wary that the promised $10 billion of subsidies will end up being a handout for housing that would have been built and sold to FHBs anyway, thus offering no public benefit"
Are you saying that the fact that the program only subsidises the house and does not build and sell the full house at a reduced rate (Singapore style) is the problem?
I’m just wary that, like the NRAS, a large proportion of the subsidies will go to homes that would already be built and sold to FHBs. How would we distinguish the EXTRA new homes and not end up subsidising them all if a FHB buys one?
Could this issue be remedied at least at the outset by focusing on building rental stock for the growing group of people who can’t afford to buy even with FHB subsidies?
Also please let me know if this sounds right/wrong to you:
I agree with your point in this article that these ebbs/flows in price fluctuations and demand subsidies are as old as time and are largely unavoidable due to the political realities of 2/3rds of households owning property.
But would you agree that these fluctuations are generally on an upward trajectory in the direction of a higher and higher gap between median property values and median wage? Ie even though these ebbs and flows occur, we’re not going back to a 20% deposit taking 3 years to save for vs 11 years now. It might go down to say 9 years and then shoot up to 13 years later on this upward trajectory.
My point being that they will keep subsidising demand until they can’t, and while that is happening there will be an ever increasing caste of low wage earners who will not (perhaps ever) be able to afford a mortgage.
If this is the case, then would their demand for new housing not disappear from the calculation? In the same way my desire for a sports car does not show up on Ferrari‘s radar - because I can’t afford it.
Long story short - if you’re building homes for people who can’t afford a new build then doesn’t that address your issue?
Ah mate, absolutely gutted I couldn’t sort out my citizenship papers in time—another election without a vote for me! Make sure you get out there and double down on the democracy sausages for the both of us. Sauce on top, obviously.
Next time, I’ll be there flipping snags and ticking boxes. Cheers for holding the fort!
It would be nice if politicians were focusing on long term prosperity by reducing income taxes or changing immigration laws but alas they're just chasing the next macro cycle as you described.
Australia must choose: keep risking super savings abroad to defend fragile asset gains, or rebuild real security through homes and infrastructure. A New Super Deal can secure lasting retirements for all?
On your last point regarding the $10bn subsidy - can you clarify what you mean by "I am wary that the promised $10 billion of subsidies will end up being a handout for housing that would have been built and sold to FHBs anyway, thus offering no public benefit"
Are you saying that the fact that the program only subsidises the house and does not build and sell the full house at a reduced rate (Singapore style) is the problem?
I’m just wary that, like the NRAS, a large proportion of the subsidies will go to homes that would already be built and sold to FHBs. How would we distinguish the EXTRA new homes and not end up subsidising them all if a FHB buys one?
Could this issue be remedied at least at the outset by focusing on building rental stock for the growing group of people who can’t afford to buy even with FHB subsidies?
Also please let me know if this sounds right/wrong to you:
I agree with your point in this article that these ebbs/flows in price fluctuations and demand subsidies are as old as time and are largely unavoidable due to the political realities of 2/3rds of households owning property.
But would you agree that these fluctuations are generally on an upward trajectory in the direction of a higher and higher gap between median property values and median wage? Ie even though these ebbs and flows occur, we’re not going back to a 20% deposit taking 3 years to save for vs 11 years now. It might go down to say 9 years and then shoot up to 13 years later on this upward trajectory.
My point being that they will keep subsidising demand until they can’t, and while that is happening there will be an ever increasing caste of low wage earners who will not (perhaps ever) be able to afford a mortgage.
If this is the case, then would their demand for new housing not disappear from the calculation? In the same way my desire for a sports car does not show up on Ferrari‘s radar - because I can’t afford it.
Long story short - if you’re building homes for people who can’t afford a new build then doesn’t that address your issue?
Wow. Such a thorough and detailed analysis. Very insightful and helpful in understanding the housing crisis in Australia.
Ah mate, absolutely gutted I couldn’t sort out my citizenship papers in time—another election without a vote for me! Make sure you get out there and double down on the democracy sausages for the both of us. Sauce on top, obviously.
Next time, I’ll be there flipping snags and ticking boxes. Cheers for holding the fort!
It would be nice if politicians were focusing on long term prosperity by reducing income taxes or changing immigration laws but alas they're just chasing the next macro cycle as you described.
Australia must choose: keep risking super savings abroad to defend fragile asset gains, or rebuild real security through homes and infrastructure. A New Super Deal can secure lasting retirements for all?