Treasurer
Joe Hockey confirmed yesterday in New York in an interview with CNBC that our
large migration program is one of the key drivers of housing unaffordability
for young people.
He
told CNBC that “Australia is a long way from a housing bubble….The fact is we
have a very generous immigration program and we have very slow supply coming in
the market”.
Mr
Hockey is correct that the high migration program is a driver of rising house
prices in Australia. Where I differ from Mr Hockey is that I don’t believe
rising house prices is a good thing. The fact is that housing is a necessity,
like food, water, electricity and petrol. No-one cheers when the price of food,
water, electricity and petrol goes up – why should we cheer when the price of a
house goes up?
That
cheering drowns out the quiet sad shrug of a generation being locked out of the
opportunities which my generation and the one before me had the good fortune to
have.
Kelvin, you are spot on! Unfortunately most politicians like high immigration to show off economic growth (not individual growth) and they are in the pocket of business which likes a big Australia to make more money. We need more polies like you who aren't afraid of telling it as it even if it goes against the party line. Keep up your good work.
ReplyDeleteLove your work Kelvin - pity there are not more genuinely concerned with such issues in our Parliament.
ReplyDeleteOh and whilst you're at it - can you tie-in the issue of negative gearing also compounding the effect?
ReplyDeleteMostly people complain when prices go up. Strangely, not so with houses. It is a rather remarkable thing that banks and other special interest groups have managed to control the message and hoodwink almost everyone.
ReplyDeleteSo, is Mr Hockey hoodwinked or is he just one of the hoods?
As I recall, Mr Hockey isn't the sharpest tool in the shed. My bet is that Mr Hockey is a hood who has hoodwinked himself.
:" I don’t believe rising house prices is a good thing"
ReplyDeleteQuite right.! Everyone I know is complaining about their house being work more. Mine cost $12000, is now worth $600,000. A disgrace.
Yes, it's a wind-fall for property investors, but not necessarily for home-owners. If an owner of a house of residence must relocate, then they must pay a comparative price. (minus costs and stamp duty). Australia is "open for business", and that means the cashed up property investors, the growth-lobby and millionaires running the country! Our economy is becoming bigger, but not better for people at the grass-roots. "Farming" people, profiting from masses of migrants coming into our country, means what we have must be shared between more people. More and more less wealthy people means they are excluded from the economy, and the great Australian dream of home ownership - turning into a nightmare!
DeleteThe real question is why is Kelvin the only honest one ? The liberals were founded on everyone being able to have a family home. The number of landlords has trippled and they seem keen to make that multiple increase as quickly a possible.
ReplyDeleteBefore my children were born I was worried about the effect of population growth meaning that when they got a house they would have to spend a lot of otherwise good living time commuting to work from more affordable outer suburbs. I am therefore very pleased that one of them (and his partner) has a place close to a railway line only 20 min from the City. Double income essential. What was the point of having a small family to try to mitigate these obvious issues? Not to mention the clearing of 'undeveloped' (ie Australian bush) land for more and more housing.
ReplyDeleteWe need more polies like you who aren't afraid of telling it as it even if it goes against the party line. Keep up your good work.
ReplyDeleteThe mass unemployment that is around the corner will ether change Bill Shorten or he will have to go as he is a Big Australia man!! he has the attitude that because we all came in as migrants (Indigenous not applicable) he thinks we must continue like its our culture, I hope the indigenous people latch on soon as they will loose even more land.
Here, here, Kelvin. Not only that because of the massive build up in migrants and refugees over the past six years, we have raised demand to an unbelievable level. Add that to the recession we've been in, in our two speed economy, we've had little supply of housing. Something will go bang soon.
ReplyDeleteAnd lets dump negative gearing
ReplyDeleteSpot on!
ReplyDeleteLet's stay focused. Reduced immigration and decentralisation are the overarching issues to traffic,planning and infrastructure etc.
DeleteWise words – the other side of the discussion is the seeming increase in house prices is booming at the top end as we give a permanent visa to someone who spends over $5M. The top suburbs in our cities now have vacant mansions left as a crash pad for global citizens and a safe house here. These people are not engaging in our communities. Fewer houses with bigger numbers hide the reality. And for a country that strives for home ownership we seem to have no trouble selling our land which actually creates wealth for us and is not a passive personal asset – funny world we live in!!
ReplyDeleteJust though I would pass on a bit of an epiphany. The following quote is from a financial article talking about national debt – nothing to do with population. If you think about the big picture then given our growth based economies and increasing use of debt there is only really 2 ways to prevent a total destabilisation of society 1) everyone accepts some serious, I don’t have enough to eat, type poverty or 2) we increase the population.
ReplyDeleteBig pictures always make people freeze up – our minds only seem to be able to think in simple problem / simple solution. Maybe we should be shifting the population debate more into the economics arena – there are a few hard economic truths that need to be dealt with for a decreasing population but there are also some pretty harsh economic consequences of a rising population as well.
http://www.dailyreckoning.com.au/why-trade-deficits-do-matter/2013/10/03/
"Most people think in terms of countries instead of individuals or households. In that case, the trade deficit is actually a symptom of instability in other areas. One example is the gap between savings and borrowings which too much consumption creates. An economy needs savings for the same reason a household does, to buy capital goods that improve productivity. Without savings, productivity stalls and an economy can only grow by increasing its population (or by borrowing more). Economic growth is overrated by many, but is incredibly important when you're in debt."
When you are debt, it is per capita economic growth that gets you out of debt and improves your indiviual circumstances. It is an empirical fact that for some time after population has risen beyond an optimal level, further population growth will:
Delete(1) Increase the total economy
(2) Not increase per capita wealth.
This is the stage that nations like Australia and Canada have been at for the last 30 years.
However, if we persist in further growing the population then:
(1) Total economic output will stop increasing and eventually decline
(2) Per capita wealth will decline more rapidly and then much more rapidly.
This is the phase that the world is presently transitioning into.
The social disruption that this transition is causing is more than evident in places like Egypt. But it is also evident in places like Canada and Australia --- where individuals must compete on a global labour market that has far more workers than resources for them to work with!
Good luck to us all. We need it.
Thank you Kelvin, for speaking on behalf of my generation. You brought a tear to my eye. As a renter in my 30's, married with a 2 year old, I would like to confess that with the exorbitant amount of money we are paying out for rent each month, it seems like an impossible dream that we will one day be able to afford a house to call our home to raise our child, to put love into. Thank you, thank you for speaking on behalf of the generation that our economy and as it seemed most politicians forgot.
ReplyDelete