Ben Schneiders hit out at the IPA/ Costello push for land supply forever in this cunning article:
IT WAS one of the most pernicious of the myths peddled during the 2007 federal election campaign – that state Labor governments were largely to blame for the record low levels of housing affordability and all they needed to do to ease the problem was to release more land.
He goes further:
Data compiled by The Age in 2007 showed that, rather than there being a shortage of land, big developers were swimming in it and the top six listed players were aggressively acquiring it. Their land banks – the number of lots on their books – had risen nearly 20% in a year. Some of the biggest players, such as Stockland, had more than tripled in the previous five years.
Of course, the Costello/IPA “argument” to release more land, would be great for developers, which could stake a claim on great swathes of Melbourne’s paddocks and the outskirts of Australia’s other big cities.
Recent moves in WA and China to cut property taxes will see this trend increase. This will enable fat cat landlords to be even lazier. With clearance rates plummeting last weekend from 50% in Melbourne (when we were averaging in the 80’s this time last year) to a gob smacking 27% in Adelaide, a rising tide of property is backing up.
This can only be good news for first home buyers. Hold off! Over the next 3 – 4 months we will see a severe drop in house prices as people realise the price they paid is not reflective of the earning capacity of the average aussie. The market will be flooded with houses as speculators try to bail out before the market well and truly tanks. Our own credit crisis will set in similar to what America has gone through.
However, policymakers worldwide are doing their best to bail out baby boomers and force those generations who will have to clean up the climate mess with a lifetime of record rents. Rudd implies that we should be paying 50% of our income on rent with his policy decisions so far. Outrageous.
The cutting of holding charges on land will only prolong the pain. Housing prices should be encouraged to fall as quickly as possible so that small business can find cheap rental property to start-up.