Excessive house prices: land use regulation and not immigration is the solution

Tony Abbott must surely be the only possible route by which Australia can emulate the benefits that the US is now reaping from the election of President Trump.

While being a more refined politician than The Donald but falling short of many of our hopes when in office, Abbott shares Trump’s goals of small government, and like him contests Political Correctness, and is pro-liberty and democracy.  Abbott’s unadvertised selfless, personal charity work among Aboriginal communities marks him as unique, possibly differentiating himself from any other politician in the world.

In his agenda, Abbott identifies several policies that most of us would welcome, at least as a start.  They include:

  • Stop all new and frivolous spending to fix the budget
  • End further subsidies of intermittent and unreliable energy.
  • Keep Jihadis off the streets. Stop hate-preachers.
  • End funding for bully bureaucracies and welcome straight talking.

He also seeks to make housing more affordable, again something most people would welcome, but his policy to accomplish this is, “By scaling back immigration to migrants who can make a contribution from day one”.

Scaling back immigration numbers to include some genuine political refugees among a general programme largely limited to those that offer a net benefit is to be welcomed. But not because this would take the pressure off house prices.  Pressure on house prices is not derived from immigrant numbers – and certainly not from the immigrants from basket case countries that are causing social problems.

Last week, the 14th Annual Demographia survey of global house prices was released.  This measures prices (in 293 markets across the world) by comparing the median house price with median family incomes; while other measures might be preferable, they do not differ greatly in their outcome from that of Demographia.

Demographia estimates that Australia led the world in its house price costs in 2017, as it has done for most years.  Of the 92 housing areas containing over a million people only Hong Kong has higher prices than Sydney.  Markets with over 2 million people are illustrated below.

The above data shows that median prices relative to income levels in Sydney are threefold (and Melbourne over twice) the levels found in Phoenix, Dallas, Houston, Charlotte and Atlanta.  These are cities showing much higher population growth than any Australian city.

Increasing the supply of houses is not a difficult process.  The industry is adaptable and can readily increase output by 50 per cent or more in the course of a year or so.  And while Sydney’s builds are, relative to earlier years, presently quite high, with NSW at around 70,000 a year (they have only rarely reached such levels in the past) this is due to the cap on development that has been in place for almost 40 years.  In Victoria approvals are presently running at around 80,000 a year.

Nationally, house prices are at least twice what they would be if the constraining effect of development approvals was lifted and a regime similar to that of the low cost US markets was adopted.  Excessive house prices are due not to immigration or even to the supposed increase in Chinese buying (which has doubtless boosted inner city prices) but stems from bureaucratic restraints on land release and development approval creating an artificial scarcity.  This also has some implications for the nation’s real wealth since property constitutes 57 per cent of Australian households’ wealth (including owner-occupied property at 42 per cent) Table 3.7.

Australia is not a land constrained Hong Kong or even Singapore or Japan (in both of which prices are actually below those seen here).  The cause and solution to excessive house prices lies squarely with excessive regulation.

This entry was posted in Uncategorized. Bookmark the permalink.

72 Responses to Excessive house prices: land use regulation and not immigration is the solution

  1. Lutz

    I also bet it costs a lot less to build a house in the USA than in the big cities here.

  2. Tel

    Pressure on house prices is not derived from immigrant numbers – and certainly not from the immigrants from basket case countries that are causing social problems.

    So the entire demand side of the economy has just disconnected from reality and floated away. Did that happen recently?

    I always thought that both supply AND demand influenced a price. Old school I know, but there was a time when it was uncontroversial.

  3. Barry 1963

    About 2 years ago someone who a published piece saying how the planning approval process in Dallas Texas was so much easier than in Australian cities. Perhaps that’s Dallas was inundated recently. These rules have a purpose: ensuring sufficient transportation, education, sewerage, drainage etc.

  4. Howard Hill

    So the entire demand side of the economy has just disconnected from reality and floated away. Did that happen recently?

    I always thought that both supply AND demand influenced a price.

    But regulation is stifling production. Don’t prices come down when production increases?

  5. stackja

    There seems to be a surplus of units in my Sydney suburb. But no railway. I believe most of the units are probably for HK people looking for a refuge for when Red China collapses. There is only so much land between the sea and rivers to the north and south and mountains to the west. So unit blocks are going up. Yes there is lots of land elsewhere but the new arrivals don’t want it.

  6. Mr Black

    This passage is an utter lie.

    “Scaling back immigration numbers to include some genuine political refugees among a general programme largely limited to those that offer a net benefit is to be welcomed. But not because this would take the pressure off house prices. Pressure on house prices is not derived from immigrant numbers – and certainly not from the immigrants from basket case countries that are causing social problems.”

    Without the unwelcome flood of immigrants, we’d be in population decline which would have a massive effect on the price of houses. I assume that you are either a moron or that you believe your reading audience to be. To hell with anything you think.

  7. Bruce of Newcastle

    Excessive house prices are due not to immigration or even to the supposed increase in Chinese buying (which has doubtless boosted inner city prices) but stems from bureaucratic restraints on land release and development approval creating an artificial scarcity.

    I suspect there’s an ideology component too.

    Australians overwhelmingly want a house and a yard so they can spread out. Government wants lots of little boxes on railway lines. So I suspect a bit of social engineering is going on: encourage apartments and discourage detached houses. Of course a big reason is the climate scam, but there’s also the issue of infrastructure for urban sprawl.

    Unfortunately for government the Nazis of the typical body corporate, the difficulty in keeping pets, playing music and having cars make apartments undesirable…except for inner city Green-voting metrosexuals who like dining and art galleries and Facebooking and not much else.

  8. teddy bear

    Tel some people just love the whole open borders thing and any time it is spoken against reason and facts fly out the window.

    Reducing immigration WILL reduce pressure on house prices and increase availability and affordability but those people would rather the dog gets a bit of help chasing its tail instead of stopping it from chasing it’s tail in the first place.

    Best case scenario would be reducing immigration AND reducing red tape, sadly we are more than likely going to get the worst case scenario of an accelerating immigration program and more regulation…

  9. Bruce

    There is not much point in declaring a “demand” for a house if there is NO way you will ever be able to afford it. Unless, of course you fit the profile of certain favoured groups.

    This is further “complicated” by the interesting situation in Oz that “Freehold” is NOT ownership, but at the whim of the “crown”.

    ALL land is ultimately “crown” land in perpetuity. How our new Chinese landlords will deal with this will be interesting.

    It is one of those wonderful Australian fantasies, that what’s yours is actually “yours”.

    When your home is “resumed” for some project or other, you can haggle briefly and possibly expensively, but the bulldozers will show up at crack of dawn one day and if you haven’t packed your family valuables, tough.

    The “crown” also appears to own everything below the ground, whether they know it’s there or not.

    Try starting a mining operation on your own “property” without a huge amount of paperwork, ‘green tape’ and serious transfer of cash to the “crown’.

    Free country? Yeah! Right!

  10. teddy bear

    Bruce of Newcastle the disturbing thing is even in areas where there is plenty of space the developers and councils are conspiring together to make only tiny blocks of land available. In my regional suburb with plenty of land there was one plot which was so tiny the owners were only capable of building a small house with no backyard only a couple of metres on one side none on the other and a tiny front yard.

    There is ample space to sell nice sized blocks for houses but it is becoming increasingly rare.

  11. Confused Old Misfit

    Housing prices at determined by supply and demand. That is, supply and demand within a particular geographical radius from the loci of commerce in a particular area. It’s sort of a chicken/egg thing. But first come people plonking themselves down any old way (well not really). Then the businesses grow in that locality to service local needs. The businesses need employees and that brings in more people and round and round it goes.
    Australia has plenty of land. Like every other country in the world it does not and cannot have enough land in intimate contact with its major business centres. Demand for housing, of any kind, will be high in these areas. The opportunities to increase supply will be limited.

  12. Alan Moran

    Tel

    Of course demand is a factor but it will only influence price if the supply is inflexible. A surge in the demand for Milky Ways might lift prices but confectioners would soon find ways to up supply at little or no extra cost.

    That would also be the case with housing. The cost of a new house includes land that would be valued at just a few thousand dollars but with the government induced scarcity sells for $400k in Sydney. The house itself would cost only perhaps $150-250k and the land preparation less than $80k. So, instead of a new house on the Sydney periphery costing $800-1000k with a liberalised planning regime it would cost $250-350k just as it does in Dallas and Atlanta, where land, as near Australian cities, is abundantly available.

  13. JC

    So, instead of a new house on the Sydney periphery costing $800-1000k with a liberalised planning regime it would cost $250-350k just as it does in Dallas and Atlanta, where land, as near Australian cities, is abundantly available.

    Yep, Texas population ~28 million and the fastest growing state in the US. Always a good argument terminator that I often use in order to prevent stupid shit being said.

    Alan

    The first thing Abbott did when gaining office was lie and raise the marginal rate. He also spoke about a budget emergency but signed up to every single Liar Party big spending proposal.

    No thanks and no second chance.

  14. teddy bear

    Alan you are conveniently forgetting you can’t just allow people to build houses in a city, you need to provide all the necessary services and the like that go along with it.

    Australia has an abysmal track record of city planning that only gets worse as time goes on. We have long since stopped and perhaps never started planning for future demand, we have been planning for past demand for some time now and it only gets worse.

    The fact that we are so behind in supply of essential services creates not only additional delays in approvals but also ends up scrapping projects entirely because the areas services cannot handle the additional people.

  15. stackja

    My late father bought land in a then isolated suburb. Bridges built across rivers opened the suburb to more people. No railway just roads. More people, more cars, and more cars pass through on there way to other suburbs or Sydney CBD. Why so much business in Sydney CBD?

  16. Pressure on house prices is not derived from immigrant numbers – and certainly not from the immigrants from basket case countries that are causing social problems.

    You’re wrong. The fact that regulations contribute to the affordability of Australian homes does not then exclude other factors from contributing to the problem. Excessive immigration is one of these. Do you think these immigrants from the shitholes of the world are not buying houses? If you do, you’re deluded.

    Here is one of the many ways that it currently works:

    Large Indian peasant family, and we’re talking very large here because they’re all large, pools their monetary funds and selects one of the clan, a young man, to immigrate to Australia. They contact an Indian restaurant in Melbourne; you know, one of those places that is strangely always empty but somehow stays open, to organise a 457 visa for the family member. Last I heard the going rate is 50K.

    Young man moves to Australia and works for the business owner for 4 years for free. Family supports him. In the meantime the family pools more resources and begins to purchase property through our erstwhile immigrant who is contributing so much to the local economy, (snark). At the end of his 4 years he gains permanent residency and begins to bring in his immediate family members with the family migration scheme. They continue to purchase properties. And so it goes.

    Fellow I knew in Australia worked for one of the big Indian consultancy firms. Indian IT guys on 457 visas and whom were being paid peanuts in comparison with the locals, had on average 3 properties to their name in Melbourne. This is how it works. This is the reality.

    For Sydney you can just swap the Chinese for Indians. Same story.

    These Indian clans have hundreds of family members. Chinese have less but they have more money per capita. Yes, our regulations are stupid. But our immigration policy is criminal. You stop the annual intake of 250K immigrants per year and watch the Australian housing market fall over dead.

  17. Mr Black

    Once Alan has shit the bed with his idea that immigration should continue to fill cities that are already sprawling far beyond peoples willingness to travel across, the rest of his nonsense is just waffle. What use is “affordable” land that is 75km from a business centre and 2 hours in traffic each way. If you want to work there you have to…. pay the premium to live near it, which drives up prices. No one wants to live in the areas that fill up with immigrants either, driving up prices everywhere they aren’t. Unwanted immigration is the cause of the rapidly declining quality of life, housing prices is just one aspect of it. But Alan won’t worry, I’d lay money that his neighbours are all white.

  18. Bruce of Newcastle

    What use is “affordable” land that is 75km from a business centre

    Land is pretty affordable here in Newcastle, which is why there’s a boom on.
    Again government red and green tape adds a lot to the price of subdivisions but you can sell your house in an inner suburb of Sydney, buy a nice new house here and put $1 million into investments at 6%. Then retire.

    The price issue is also because people are conditioned to want to live in the sexy bits of Sydney and Melbourne. You can easily pick up a house for $100k in a regional centre.

  19. Eyrie

    “While being a more refined politician than The Donald but falling short of many of our hopes when in office, Abbott shares Trump’s goals of small government, and like him contests Political Correctness, and is pro-liberty and democracy. Abbott’s unadvertised selfless, personal charity work among Aboriginal communities marks him as unique, possibly differentiating himself from any other politician in the world.”

    More refined politician? Um, in which alternate reality does this Tony Abbott live?
    In our universe Abbott is a gutless, big government, statist shit who hates freedom. His work in aboriginal communities is worthless virtue signalling which no doubt makes him feel good but is of no importance.

  20. JC

    Adam

    I fail to see what you missive is trying to prove. Being anti-immigration or large scale immigration is an entirely different argument as to whether or not a demand upswing can or cannot be met with a commensurate supply response.

    Texas has seen more of an immigration shock than we have and what you’ve seen is a strong response in construction. Fact, end of story.

  21. Mr Black

    Bruce, did you contemplate that perhaps people are moving to Newcastle because they can no longer afford to live in the city of their choice?

  22. Confused Old Misfit

    If you cannot afford to live in a particular locality that should sort of, kinda, perhaps, maybe indicate to you that your choice is wrong?

  23. marcus classis

    Australia is not a land constrained Hong Kong or even Singapore or Japan (in both of which prices are actually below those seen here).

    This is not entirely true, as closer study of regional urban geography shows quite clearly. Look at the Sydney basin, for example. It is now constrained by the rugged sandstone country to the north, floodplains to the west, national park to the south, only towards Picton can it expand.

    No, there is also a severe policy failure, and a failure of nation building.

    An entire new city is required in the Pilbara – where is it? An autobahn and Eurostar-linked style of new city is required in the Goulburn area, where is it? Where is the new city in north QLD? Why isn’t there a new city at Twofold Bay?

  24. teddy bear

    JC do you believe that our Governments are meeting our current demand for infrastructure and amenities? and do you believe they are realistically capable under current conditions of meeting demand stemming from a large upswing in dwelling supply?

    Reducing immigration is the “lazy” option but it is the simplest option with the most immediate results that will make it much easier to begin sorting out the mess. Reform of red tape and proper provision of infrastructure and amenities will take a significant amount of time and political will, which is only made all the more harder by continuing to add demand through immigration.

  25. Confused Old Misfit

    No, there is also a severe policy failure, and a failure of nation building.

    Thank God! It’s bad enough now for some. I hate to think what this place would be like if it had been “planned” by government. The policy failure is that there have been policies.

  26. Mr Black

    teddy bear, if immigration is stopped all the other reforms are completely unnecessary. All the cost of services and provioning – unnecessary. We are costing ourselves a fortune so politicians can collect UN awards. Yet all the reforms in the world cannot lower housing prices when there are a million new “citizens” every few years demanding a house.

  27. JC

    Bear

    Infrastructure has badly trailed population and modern demands since I was in school shorts and longer. That’s nothing new. Infrastructure spend always badly trails population growth and demands.

    It’s a universe better than when I was growing in that it took 3.5 hours to reach Essendon airport from south of the city.

  28. Bruce of Newcastle

    Bruce, did you contemplate that perhaps people are moving to Newcastle because they can no longer afford to live in the city of their choice?

    No. I contemplated that people are moving to Newcastle because they can use the capital in the Sydney house to retire on. Why work if you don’t have to? Lifestyle here is quite yum (and there’re 200 wineries 45 minutes away, which is even more yum).

    And if I want to I can work from here for clients in any continent bar Antarctica, and I have.

  29. cynical1

    Perhaps that’s Dallas was inundated recently. These rules have a purpose: ensuring sufficient transportation, education, sewerage, drainage etc.

    Right, so that’s why the QLD floods of 2010 were managed superbly.

    Oh, hang on.

  30. Snoopy

    The fact that we are so behind in supply of essential services creates not only additional delays in approvals but also ends up scrapping projects entirely because the areas services cannot handle the additional people.

    It’s certainly not because we are not paying. To subdivide an existing block in Brisbane to create one additional block costs $50,000 just in council and water and sewerage headworks charges and application fees alone. That doesn’t include any engineering or the cost of installing actual water and sewerage connections from the mains out in the street to the property boundary.

  31. teddy bear

    JC back then the population, urban sprawl and density was far less, problems of infrastructure were easier to address, now increasingly the only means of addressing traffic problems in many areas of Sydney is underground tunnels and thanks to unions at massive time and cost. The train network is easily crippled by the unions as well, which in turn cripples the roads. Then there is hospitals which unions also make sure take forever to build at insane prices and the list goes on.

    Unless the pressure is relieved and enough time given to sort out the mess through proper planning and reforms its not going to get better, instead it will continually go backwards at an ever accelerating rate.

    Housing supply will not be able to ramp up in such a situation and house prices will continue to remain inflated. Also the residents in the wealthier suburbs ensure the density in their areas doesn’t increase, this pushes the demand out to other areas further from the city, areas which already have poor infrastructure further slowing things down and pushing up prices in those suburbs, and I have no hope of any reform in those areas any time in the near or distant future.

    Though it’s worth noting that when it comes to apartments lack of infrastructure often does not outweigh whatever the developers are giving the politicians, but apartments and in particular apartments with no car space will not satisfy demand for a house with a garage.

  32. chrisl

    We are a nation of ticket clippers and regulators
    I am doing exactly what Bruce o Newcastle suggests and am moving from Melbourne to a west coast seaside location
    We are hearing horror stories of ONE YEAR just to get a permit approved 1
    If it ticks the boxes Stamp the bloody thing
    If you are snowed under EMPLOY someone

  33. John M

    There are cities here in the U.K. With broadly similar planning regimes as Manchestervand Leeds, but where house prices are much lower. The competition for housing is a factor in prices, with cities that have more and better jobs bring more expensive. Beyond this we have falling household sizes as everyone gets divorced. And immigration does generate increasing prices, as we have seen since 2001 in particular.

    In England and Wales, policy is to build 3 million homes by 2030. By the time we get there, another million will be required. I have proposed building 5 million and be done with it.

  34. teddy bear

    Snoopy I was mainly referring to city infrastructure and amenities like major roads, rail, hospitals, schools etc. Local councils outside of the wealthier suburbs are generally more than happy of any development that they can get away with so long as the applicant goes through their red tape and coughs up the money, large developers with money to bribe have a disturbingly easy time of plonking down an apartment where one should not be built, smaller developers and residents get bent over and screwed long and hard, presumably to allow more for the larger developers.

    Where there is a total lack of services like transport hospitals etc they end up in an argy bargy with the state Gov about it and things go nowhere fast, unless the developer is paying off both the local and state gov, but that still takes time as our governments are not just corrupt but criminally inept.

  35. John Constantine

    An insurance company advert playing on foxtel boasts that one third of Australian small business is run by immigrants.

    Good on them, but we realise that the small business scam to rort the immigration system is being exploited majestically by Indian organised crime agents.

    Buy a small business leasehold in a small aussie ghost town. rent it out to an Indian peasant for a massive annual profit, but the peasant clan gets citizenship for its anchor chain.

    Australia is wrong pricing access to the system, and house prices are inflated by the demand for the wrong priced product.

  36. Rob MW

    Alan – Pressure on house prices is not derived from immigrant numbers – and certainly not from the immigrants from basket case countries that are causing social problems.

    Tel – So the entire demand side of the economy has just disconnected from reality and floated away. Did that happen recently?

    Tel – did you properly read the ‘basket case’ bit ? It’s hard to see them paying for land & houses with beads, English language classes and harsh words of grievance, except maybe selling their story to Fairfax or the ABC.

  37. John Constantine

    Rental demand from mass imported voteherds, govvie subsidised, does its bit for overall house price demand.

    House price apartheid, where the right sort do flight to areas that the wrong sort cannot afford is part of the process.

    The ripple effect, where high prices wash out from insanely overpriced ground zero house price apartheid enclaves finishes the process.

  38. teddy bear

    Rob MW they don’t need to pay for what is freely given. More than a pretty penny goes into social housing schemes. There is also more than enough gibs and schemes to be rorted to buy one, surely you have heard of the exploits of some of our most industrious immigrants.

  39. 2dogs

    The School of Life blames post-modernist ugliness for the problem.

  40. Rob MW

    Rob MW they don’t need to pay for what is freely given. More than a pretty penny goes into social housing schemes.

    This would make it Gummit property, so it would follow that Gummits must be increasing land & house packages by buying – in the market – what they already own. I don’t think so. Short of that, the Gummit can only give the ‘basket cases’ the land & house therefore there is no impact on house prices short of interfering in availability (supply) market, which is the case in point.

  41. teddy bear

    Rob MW not sure what your post is getting at. Governments are substantially increasing their stock of social housing presumably by building new which I think we agree on. This artificially increases price by giving supply to those who would not have been able to get housing at that price point.

    Rental subsidies and other similar schemes allow people who would otherwise not be able to afford to rent/buy in certain areas to be able to further increasing prices. There exist entire apartment complexes built specifically around assistance schemes for people who would not be able to afford living there. That is deliberately artificially increasing demand for a higher price point.

  42. Rob MW

    Rob MW not sure what your post is getting at. Governments are substantially increasing their stock of social housing presumably by building new which I think we agree on.

    Crown Land – the Gummit already owns it therefore new releases can only, in the most part, come from the Crown Land estate. Social housing is built on, wait for it, Crown Land therefore, apart from impacting the availability of Crown Land being sold into the private open market – case in point, social housing has no impact on house prices.

  43. Philippa Martyr

    Ahhh, Tony Abbott. Gosh, what good ideas.

    What a shame he’s never been Prime Minister with a massive majority and a clear mandate to govern like a grown-up, which he then squandered on a pissweak budget and knighthoods for Prince Philip.

    Oh, hang on …

  44. teddy bear

    Rob MW social housing does affect house prices because the stock is supplied to people that can’t afford it at that price, same with rental subsidies and other schemes. Remove them you remove demand because they can’t afford it and all those properties would be available to those who could.

    If you restricted access to welfare, social housing etc to only people who have been Australian citizens for 12+ years I imagine you would remove a lot of demand due to the fact that many would be priced out of the cities and quite probably the country altogether.

  45. nerblnob

    Texas has seen more of an immigration shock than we have and what you’ve seen is a strong response in construction.

    Yep. I only know Houston well but you get a 5x better house for your less-taxed money there than anywhere in Australian cities.

    And infrastructure in Houston is improving all the time. Like the other JC post says, there’s always a catch-up lag. People can arrive quicker than you can build houses and you can build houses quicker than you can build big infrastructure.

    Melbourne is improving a lot slower than it could and is getting by on 90s/early 2000s legacy while letting greens of all parties block new developments and roads etc.

  46. 2dogs

    Social housing is built on, wait for it, Crown Land

    No.

    Departments of Public Housing will rent from ordinary landlords, and then release to public tenants; and where new housing is built, they will buy off new subdivisions from private developers. Departments of Public Housing compete with private renters and buyers.

  47. nemkat

    Tony Abbott- the Claytons Prime Minister:

    1. Still determined to have an Aboriginal House of Review, even though Turnbull has ruled it out
    2. Still determined to increase the Refugee intake, even though he must know that the U.N. will be choosing those refugees on our behalf, and no one wants them anyway
    3. Still determined to talk a lot of guff, to wit:Keep Jihadis off the streets. Stop hate-preachers.
    Niki Savva was right, for once. The bloke is a fraud, and a complete waste of space.

  48. A Lurker

    Lots of houses for sale in the regions. Good houses with character and age, with decent sized backyards too – if they were located in Brisbane, Sydney or Melbourne then they’d easily each be worth a cool half a mill each. In the regions, however, you could pick one up for under $300K, many under $200K. So why don’t Aussies buy these houses? Because few jobs in the regions. Few doctors. Not city-grade hospitals. Not much in the way of other infrastructure either.

    Perhaps instead of turning Australian cities into versions of the old-East Germany with its Soviet-style apartment buildings, Australian Governments – Federal, State and Local – could spend money on developing, upgrading and updating the needed infrastructure in the regions so that businesses and industry are encouraged to go west beyond the Great Dividing Range and create jobs out there.

    Where jobs go, families will follow.

  49. Herodotus

    I support the concept of people moving to places like Newcastle, and Tony Abbott moving to a conservative party.

  50. Mundi

    There are no Higgins outside the big cities because of regulation.

    You get there same blanket regulation regardless of if you are in lefty unionists suburb or out in the remote country. Same safety laws, same industrial laws, same taxes.

    Australia’s problem is federal regulation and stupid zoning laws. Everything within 50km of a cbd should be zoned for multi storey units, or just deregulate zoning.

  51. Sydney Boy

    Perhaps instead of turning Australian cities into versions of the old-East Germany with its Soviet-style apartment buildings, Australian Governments – Federal, State and Local – could spend money on developing, upgrading and updating the needed infrastructure in the regions so that businesses and industry are encouraged to go west beyond the Great Dividing Range and create jobs out there.

    Correct. And to do so, the government should spread their services around. But Barnaby Joyce has been attacked for moving the Veterinary Medicines Authority out of Canberra and to Armidale. Pork barrelling? Sure. But the University of New England also specialises in vet medicine and science, and has heaps of land on which to conduct research and undertake animal husbandry.

  52. Sydney Boy

    Another thing this graphic shows is that when commentators and politicians and the like jump up and down and say housing is unaffordable; in reality they are are talking about Sydney, Melbourne, and to a lesser extent Brisbane. Housing remains affordable in most other cities and towns in Australia.

  53. Tel

    Tel – did you properly read the ‘basket case’ bit ? It’s hard to see them paying for land & houses with beads, English language classes and harsh words of grievance, except maybe selling their story to Fairfax or the ABC.

    I know a fair number of Lebanese and Syrians who work… mostly trades stuff: building, mechanical, electrical, joinery. They seem quite capable of earning money when they take an interest to do. Some of the Asians turn up with plenty of money already in pocket, but most of them work for it. People coming in from countries like Vietnam and Cambodia where they could hardly earn anything in their home country, quite rapidly discover that with willingness to pick up some tools, they can earn a reasonable living in Australia. They seem to be buying a lot of houses.

    It’s not just houses though, it’s the roads… traffic is ridiculous now and Sydney traffic has never been good but this is something else again. The electricity network just got upgraded and we are already at the limits. The water situation is risky although still reasonable… they are back to demanding everyone have a water tank, after previously telling people NOT to have a tank, but Warragamba was built when Sydney was much smaller and no new dams are getting built so there will be a limit. The trains are jam packed now, that’s not a metaphor, it’s getting like Tokyo (not quite there, but close). All of this can be solved given enough time, but there isn’t time because more keep coming.

    You get lefties (and some “conservatives”) howling “waaaacist” at the top of their lungs but I’m not against immigration, just the massive volume of it has been dominating everything else and Sydney really is full for the time being. The demographics have very rapidly changed just in the last 20 years, and I think growth has been above 3% … something like doubling size every 20 years. Well it’s funny to hear the Greens talk about “sustainable!! sustainable!!” when clearly taking people and just shoveling them into the one city at a rapid rate really cannot be sustainable, yet the Greens are the first to freak out if you so much as mention the problems that come with open borders. Of course I’m not saying anything new that these guys are hypocrites, but it cannot be pointed out often enough.

    And I do think that if you own property in a city, then to some extent you have bought into the future of that city and you are a stakeholder in how many new people should be allowed in. It’s part of your property right. The problem is your vote at the state level is meaningless, and at the Commonwealth level both major parties support open borders and anyway the people in Tasmania and South Australia get the power to decide what happens to my city. It’s gotten to the point where existing residents only benefit if they sell out and leave, which is one option, but I would personally prefer to be able to settle and not be driven out of the city which I think of as home.

  54. Tel

    Australian Governments – Federal, State and Local – could spend money on developing, upgrading and updating the needed infrastructure in the regions so that businesses and industry are encouraged to go west beyond the Great Dividing Range and create jobs out there.

    When I first started learning to drive, the road going West out of Sydney, up and over the Blue Mountains was one lane each way and speed limits were mostly 80 with a few areas at 60. It was bumper to bumper from about 5AM with people driving in to work. The government had just started upgrading a few bits.

    Today, I think perhaps 2/3 of that road has been upgraded with an extra lane, it’s still got quite a lot of 80 zones and maybe my memory is bad but seems like a lot more of it has been reduced to 60 and it’s pretty much full of traffic all the time. At this rate, by the time I retire it will be fully upgraded and the whole lot will be a 60 zone. That’s not even close to fast enough to keep up with the entry of new people, let alone opening up the inland areas.

  55. Crossie

    You stop the annual intake of 250K immigrants per year and watch the Australian housing market fall over dead.

    This, in a nutshell and I’m including Chinese retirement investment in this category. Unchecked immigration is strangling us financially in more ways than one while unchecked Chinese buying has less social impact in one way but still putting enormous pressure on housing prices.

    End immigration for a while and block sales to Chinese non-residents and see the pressure go down. Everything else is at the margins.

  56. Peter

    “While being a more refined politician than The Donald but falling short of many of our hopes when in office, Abbott shares Trump’s goals of small government…….”

    On the subject of housing affordability your conclusion is 110% correct. Excessive regulation (and in particular city boundaries) are far and away he main cause of out of control housing prices. Bad policies and bad “solutions”. brought about by politicians who have got the problem 180 degrees wrong, constantly responding with demand side fiddling (that mostly has exacerbated the problem) rather than going to the core of the issue, which is on the supply side. Why – I would suggest that there are votes in demand side “solutions” because of the scope for pork barrelling and hand outs. And, importantly, because of adherence to more and more and more bad Green Left ideas than you can poke a stick at.

    Take a look at the following paper and especially the land price comparisons in the table on page 9. Case in point, in Adelaide, between 1973 and 2006 land prices rose by a multiple of 69 times. This exceeds Sydney, whose price increase multiple was only 49 times over this period. Sydney -less price increase than Adelaide! Adelaide, with its moribund economy and population growth that is propped up by importing migrants, many on welfare for years. You cannot tell me this is not because successive governments have constantly fiddled with policies that restrict supply. This study is not alone though – many similar ones may be found from America and elsewhere, where inept governments have achieved the same kind of dysfunction.
    I say take every Town Planner you can find and send them to economics classes. If that does not work, send them to Siberia for all I care. And for that matter send the politicians too.
    The Link:
    https://mikaylanovakblog.files.wordpress.com/2016/06/moran-novak-housing-land-regulations-in-wa-april-2009.pdf

    On the subject of Tony Abbott though I have to ask, why the hell did he not do this and all the other things listed in his agenda when he was in office as PM? Personally I think that the Drovers Dog could do better of PM than Turnbull who is nothing more than a self admiring egoist and Lefty (at least the Drovers Dog would be unlikely to be a Lefty) but I saw nothing of Abbott while he held the top job that suggests he would actually get off his backside and implement proper centre right policies. His heart may be in the right place in this regard but he was a failure in office for exactly the reason that The Donald is not. Trump appeals over the head of the Parliamentary crowd of morons directly to the people then he gets on and pushes his agenda and damn the consequences. And many of Trump’s voters trust him for it. Abbott did not. There was a communications black hole at the heart of his office that was never filled. He did not push his agenda, he did not communicate it well (or at all) and so he failed. And that, more than anything was his downfall. And the responsibility for us ending up with Turnbull in the top job has to got to Abbott. had he been better at his job this would never have happened.
    Call me Mr Cynical but I am always suspicious of politicians who claim to have had an epiphany, who have seen the light and learned their lesson. I have seen no evidence that Abbott actually has.

  57. Tel

    Lots of houses for sale in the regions. Good houses with character and age, with decent sized backyards too – if they were located in Brisbane, Sydney or Melbourne then they’d easily each be worth a cool half a mill each. In the regions, however, you could pick one up for under $300K, many under $200K. So why don’t Aussies buy these houses?

    Well there’s not many jobs for computer engineers in Dubbo, so having an expensive mortgage and a job to pay that off is feasible, but having a cheap mortgage and no job is unworkable. That’s the most obvious reason.

    Also, people who have lived in a city for a generation or two have some roots there… you know old people in the family who need a visit and who would be very distressed by a move out to a town where nothing is familiar. Kids want to live at least approximately around their parents or the area they grew up in… that’s not entirely unreasonable. But if the answer is always, “Don’t like it, then piss off and move somewhere else,” then that’s totally equivalent to saying, “Never invest in community, don’t ever bother getting to know your neighbours, don’t build up any local network, because at some stage you will be squeezed out and lose all that.”

  58. Tel

    You stop the annual intake of 250K immigrants per year and watch the Australian housing market fall over dead.

    There’s this concept where you can do things incrementally, rather than all or nothing.

  59. Just Interested

    I thought that Alan thought Abbott was the best leader the Libs had….when not Prime Minister.

    He’s a political hack – the heading to his list of slogans is ‘Let’s Make Australia Work Again’. Nothing like originality (and slogans), eh?

    The slogans on his list are all fine, but that’s all they are.

    It’s all about implementation. He had a chance. He failed.

    It is true the ‘right’ need both a coherent set of policies, enunciated through an identifiable leader with the support of a clear section of the ‘right’.

    But it won’t be this bloke and it won’t be the Liberal Party until the need to cling onto government for it’s own sake is removed by the electorate.

  60. Defender of the faith

    Excuse me. This tony Abbott you’re hawking, who is he? Certainly not the one who foisted the ridiculous and wanton waste of paid parental leave onto people who plainly did not want it? Not the guy who refused to listen when industry explained what was happening in the gas market? Who shut the door on companies explaining that jobs were going overseas for no good reason? The guy who used his captains pick to give a knighthood to Phil the Greek?
    Really? Where do you find this other Tony Abbott?

  61. Rockdoctor

    large developers with money to bribe have a disturbingly easy time of plonking down an apartment where one should not be built, smaller developers and residents get bent over and screwed long and hard, presumably to allow more for the larger developers.

    You get what Townsville ratepayers are experiencing at the moment but as apartments aren’t selling insert stadium or empty suburbs. Couple of big developers up this way still churning out housing estates despite population going backwards or using local positions of boards to lobby for an expensive white elephant on a polluted old rail yard that will significantly enhance one developers own portfolio. We won’t even go into the scandalous $18.5mil gift of ratepayers money to Adani to build their airport. However seeings Jenny Hill being a lifelong ALP agitator & mates with Trad no one will go near it.

    However that highlights a problem with the regions, NQ is in a slump & solar farms aren’t going to fix this. If there was some real industry people may come and the fact the old guard up this way jealously guard their patch in such a way I have been told other than Cairns & Mackay NQ is a closed shop so most don’t bother. How many other regions have the same soft protectionism going on? Many I bet along with a strong NIMBY attitude that I have come across in some regional towns. Fix this culture and you may see people naturally gravitate to the regions along with incentives for business to. Just observations from a lifetime working in rural areas of 3 states, that said have come across some awesome councils in dying towns.

    Lastly as far as apartments are concerned been burnt by negligent Body Corporates when I did own a unit, I now avoid units like the plague. You would be surprised by the amount of people who I have come across with similar attitudes. No thanks never again don’t need the stress.

  62. Crossie

    Excessive regulation (and in particular city boundaries) are far and away he main cause of out of control housing prices.

    I disagree. Those costs are more or less static and predictable while demand can push a price hike in days, weeks.

  63. Boambee John

    Alan

    Delete the word “and” from your headline and as relevant from the article.

    We need less of both regulation and immigration, particularly chain immigration of perpetually dependent family members from culturally incompatible groups.

  64. H B Bear

    You stop the annual intake of 250K immigrants per year and watch the Australian housing market fall over dead.

    Don’t forget the gross GDP numbers. Stamp duty billions from the property pass the parcel. Voteherd population Ponzi FTW.

  65. Rob MW

    No.

    Departments of Public Housing will rent from ordinary landlords, and then release to public tenants; and where new housing is built, they will buy off new subdivisions from private developers. Departments of Public Housing compete with private renters and buyers.

    Well there’s the paradox. It’s interesting that in Dubbo NSW for example, that these private developers allowed the State Government to demolish their entire housing commission estate (the Gordon estate) and then have the sheer audacity to then sell it into the market, yet the vendors were list as the State Government with all their resale covenants in the contract. The Macquarie estate in Macquarie Fields on Sydney’s outskirts I would suggest is not owned by private developers either, after all riots can only occur on Crown Land./sarc

    So I guess your ‘No’ should have been a ‘Yes’ with a caveat or two. Just saying.

  66. H B Bear

    An entire new city is required in the Pilbara – where is it?

    Not there because people don’t want to live there. Emperor Barney built a heap of debt funded apartments in Karratha at the peak of the boom because the place was bursting at the seams. Now they are all empty and underwater.

  67. Kneel

    “…watch the Australian housing market fall over dead.”

    Exactly. Which is the problem. What politician will make changes that drop the arse out of Mr & Mrs Average’s biggest asset, which they have purchased by mortaging themselves to the hilt? Imagine a million or so of ’em, all “losing” $300k+. Won’t happen. The only way a polly will do this, is if they can blame someone else, or if they do it slowly, so that prices stabilise first, then stay steady for a while. Unlikely – required, but unlikely. Kind of like Nuke power here – makes sense etc, but can’t be done without massive blame being apportioned to someone (else).

  68. Kneel

    “House price apartheid, …”

    Fly-over counties? How long before some leftie comes out with that?

  69. max

    no FREE MARKET IN HOUSING

    cheap and plentiful credit
    Official interest rates in Australia are at a record low level
    Limited government release of new land (reducing supply)
    A tax system that favors investors and existing home owners.
    Government restrictions on the use of land preventing higher density land use.
    High population growth (now about double the world average – see Population growth rates chart).
    2008 foreign investment rule changes for temporary visa holders.
    Introduction by local councils of upfront infrastructure levies in the early 2000s.

    We all know residential property in Sydney and Melbourne is very expensive ;
    But high prices are because of one basic thing: people in Sydney and Melbourne like it like that. For generations, state governments have pursued policies that have choked off the availability of land and discouraged medium-density housing to pander to NIMBY voters, while the federal government has driven up the price of existing housing stock with negative gearing policies that help push the cost of housing beyond the reach of many Australians.
    Who’s responsible? Local, state and federal politicians and (if you own a house or have an investment property) you.

    How did this situation come about, and why does it continue?
    Part of the reason is that it is newcomers who have to pay outrageous prices for houses, while it is existing homeowners who vote for laws and policies that drive up housing costs by obstructing the building of new homes.
    Those who already own their own homes are not hurt by soaring housing prices. In fact, they benefit when the value of their homes rises.
    Given this situation and these incentives, it is easy to understand why such things as planning commissions, “open space” laws and “historical preservation” policies proliferate. These roadblocks to building are essentially idealistic-sounding ways of being completely selfish.
    Despite much liberal rhetoric about compassion for the poor, it is precisely in such overwhelmingly liberal enclaves as those in California where high housing costs resulting from restrictive laws have imposed the heaviest burden on lower income people.

    All sorts of lofty talk about “open space” or “saving the green foothills” is used to disguise the plain fact that those who already have theirs want to keep other people out, especially other people not as upscale as themselves.
    Ugly as such selfishness may be, it is no worse than the zealotry of the nature cultists who make life miserable for thousands of other people to give themselves a cheap sense of importance that some confuse with idealism.
    The irony in much of California is that the “green foothills” that environmental zealots wax poetic about are in fact brown half the year. The absence of rainfall during the California summer means that these hills are covered with ugly withered grass.
    The only places where there is green grass during these dry months are places watered by people – which is to say, mostly places where there is housing.

  70. herodotus

    Certainly not the one who foisted the ridiculous and wanton waste of paid parental leave onto people who plainly did not want it?

    Abbott could endorse equal pay for women and be criticised for doing so by both the ABC and Fairfax, plus all the chattering morning TV types.

  71. Fibro

    Sorry Alan, but Tony is not the messiah. He had his chance and floundered, fluffed and farted around more than most. If he had true conviction in his beliefs he would have stared down the media and his own party room to be heard. To do that and get shafted is a lot more noble than laying down and telling everyone I told you so.

  72. I want to apologise in advance.

    Alan Moran is yet another in a long line of intelligent sceptical experts who has succumbed to the charms of socialism and become just another parroting socialist.

    Zombie movies are a parable for socialism where everyone inevitably loses their freedom of thought and sees those still with it as being a heretic that must be violently infected. So much so, that demand no longer exists in the supply versus demand equation.

    So when I inevitably succumb to socialism and start spouting drivel like a special needs geriatric, just shoot me.

    You’ll do both of us a favour.

Comments are closed.