Prosper Australia

Prosper Australia today applauded the State Government’s announcement for taking housing affordability more seriously. However, questions must be asked about who benefits most from this announcement.

“Today’s declaration of residential zoning has made Victoria’s land bankers more money in a day than many earn in a lifetime.”

“Questions must be asked why the government is releasing 90,000 blocks of land when the property industry swallowed up at least 38,000 sites in just one year, as reported in the Age (22/09/07).” stated Prosper Australia spokesman Karl Fitzgerald.

“The property industry has dictated all housing affordability policies at both state and federal level.”
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Media Release 01/02

Prosper Australia is elated to hear that the Brumby government is returning to its senses by recognising Land Value Capture as the most efficient way to raise public revenue. However, the progressive tax tiers need to be rolled into a flat tax.

“Land Tax is the most efficient of all government revenue raising systems as it incurs the least deadweight costs on economic transactions,” said Prosper Australia spokesperson Karl Fitzgerald today. “This is widely accepted by economists. However, it is not very popular with those who like to engage in asset protection, otherwise known as tax dodging.”

“The progressive Land Tax rates can be flattened as location naturally captures the higher incomes associated with proximity to services.”

“The government needs to recognise calls from business for a reduced tax burden and less red tape. By offsetting the higher tax take with the removal of payroll tax, the government will help develop Victoria’s competitive advantage.”
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Property lobby pushes all the usual red herrings whilst ignoring the speculative causes to affordability pressures.

Demographia International’s new report on housing affordability again pushes the “unending sprawl forever” mantra. Report author Wendell Cox rolled out all the usual criticisms of land rationing, infrastructure charges and bureaucratic tape.

“The effect of unending sprawl is to stretch government finance such that public infrastructure suffers throughout the city. The resultant doughnut development sees slum pockets develop throughout the city, breeding crime” stated Bryan Kavanagh from the Land Values Research Group.

“Cities that may have affordable land on the fringes suffer greatly from a lack of services that every respectable community deserves. Few of the leading cities in the Demographia survey rate well in the World’s Most Livable Cities indices for a reason” claimed Mr Kavanagh.

Of concern is the fact that ‘land banking’ is never mentioned in any property think tank related report. The heavily criticised ‘land supply’ issue is a diversionary tactic from the large tracts of vacant land that speculators have accumulated. Speculative vacancies act to enforce scarcity and push up land prices.
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ALP policy will continue to subsidise developers over first home owners. The ALP’s new housing minister should look at freeing up the supply of privately held land (aka land banks) by using a Site Rental on all land.

In response to the housing industry’s recent call for the freeing up of land, Prosper Australia’s Karl Fitzgerald said “The only thing free about the ALP’s housing policies is the subsidy it will give land bankers.”

The recent I Want to Live Here report found that there was a substantial supply of land currently being wasted by speculators within the inner city, in Bluestone ward, Maribyrnong.

“In a period where we are constantly reminded of record low vacancies, the release to the market of speculative vacancies would see an extra 1058 people living in just one small community” reported Mr Fitzgerald.

430 properties were found vacant in Bluestone Ward, 93% of which were vacant blocks of land. Taken at current auction rates, this would double the supply of auctionable properties in the area for one year.

“With land prices having increased at 4 times the rate of GDP and dwarfed wages growth since WW2, it is time the ALP had a hard look at the economic fundamentals that sap any gain union wage demands deliver.”
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‘I Want to Live Here’ report release

Earthsharing Australia today released the first I Want To Live Here Report, demonstrating the extent to which speculative vacancies are the key hidden issue in the housing affordability debate.

The ‘I Want to Live Here’ report found that 1058 people could live on vacant sites within the Bluestone Ward (City of Maribyrnong).

"Housing affordability debates focussed on government controlled land supply were today dispelled" stated Karl Fitzgerald, the report’s author.

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Speculators rub their hands with glee at prospect of further tax write offs

“Today’s interest rate increases have rewarded the wrong people. Speculators will today be able to increase the amount of tax they can write off” said Prosper Australia spokesman Karl Fitzgerald.

“The Reserve Bank’s policy tool box is empty when it comes to housing affordability. Higher interest rates hurt first home owners but reward speculators.”

“Today’s Interest Rate increase will see $300m handed to speculators in the form of extra negative gearing tax write offs”

“Higher interest rates allow a privileged few greater tax write offs via negative gearing.”

“Why are those who already own the planet encouraged to own even more?”

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Visiting housing affordability expert Frank de Jong said ‘the Census shows 830,376 vacant dwellings in the country. This demonstrates that it is the private supply of land withheld by speculators, rather than the need for more urban sprawl, that is hurting the housing market’

‘Census figures confirm this by showing that housing has grown by 1.5%, and population growth only 1.2%. So where are all the extra houses disappearing?’

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Strong Link between Vacant Land and Housing Affordability Crisis

Leader of the Green Party of Ontario, Canada, Frank de Jong today launched Earthsharing Australia’s ‘I Want To Live Here’ campaign. The campaign targets the under use of existing vacant land and will record statistics on the real vacancies of land, housing and apartments. Earthsharing Australia will lobby the government to encourage greater efficiency in the land market.

Mr de Jong said, “Vacant land is an avoidable tragedy in our cities and towns. It is not the shortage of land, but lots kept vacant by land speculation that increases the cost of housing.

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Housing Affordability- How will the crisis end?

Alan Moran from the Institute of Public Affairs (IPA) touted earlier this year on ABC’s Difference of Opinion that Australia should subdivide more on the urban fringe to free up land and bring prices down, but according to the Land Values Research Group (LVRG) this will bring increased crime to Australian suburbs.

St Louis, Missouri, the model for the IPA’s recent recommendation to subdivide further urban fringe land, has the highest crime rate in the USA.

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New report points to major recession

A study of 34 years of the Australian property market has resulted in a 28 page report, Unlocking the Riches of Oz: A Case study of the Social and Economic Costs of Real Estate Bubbles (1972 to 2006).

Bryan Kavanagh, Director of the Land Values Research Group (LVRG) has identified that rises and falls in the economy follow those in the property market by 12-24 months (pg 14).

The revelation makes it possible to forecast economic booms and busts, and puts pressure on government and industry bodies to curb the excesses of the property market.

The LVRG has been the only Australian body to aggregate national real estate sales figures since 1972. Its analysis demonstrates the role of taxation in inflating unsustainable real estate bubbles.

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