Prosper Australia

photo credit: Derek Farr ( DetroitDerek )

Earthsharing Australia, our sister organisation, had its I Want to Live Here report quoted today in the Age article Agents accused of hyping up real estate crisis.

Social justice group Prosper Australia analysed residential meter readings over six months and found more than 7 per cent of properties used less water than is required for one person to survive.

Study author Tohm Curtis said the findings suggested that many investors could not be bothered with the upkeep and fees associated with owning rental property.

Prosper Australia’s Karl Fitzgerald said low auction clearance rates meant the rental market should be easing, and the REIV survey was the “last desperate call to dupe young home buyers into purchasing at the top of the market”.

Some of the hard hitting statements you need to read in the report include:

“The suburb of Carlton alone has sufficient vacancies to house all 220 reported homeless students at Melbourne Uni” said Mr Curtis.

“Last week the Housing Industry Association tried to claim that land supply is the cause of rising housing prices. Yet the 90,000 blocks opened up by Brumby earlier this year, on top of the 38,000 existing empty blocks of land held by Australia’s 6 biggest developers, have done nothing to curb rising land prices. Obviously there is another factor at play and our report demonstrates that it is speculation.” stated Project Coordinator Karl Fitzgerald.

The I Want To Live Here report calls for genuine tax reform as the only means to ensure long term housing affordability and ensure future Boom Bust cycles are avoided. Higher and flatter holding taxes on land should be implemented to balance out the advantage that property speculation has over all other forms of business.

Below we can see 2 examples of former Commonwealth land being released ‘to the market’. Snapped up by a developer in Melbourne’s most impoverished neighbourhood (Braybrook), such large ‘land banks’ are manipulated to drip feed houses to the markets so that high prices are assured. The building of homes is moderated by land bankers to ensure the supply of housing does not push down housing prices.

Is this the sort of level playing field we should be happy with? Kevin Rudd’s plan to release more land will result in the similar trends. It is only when a decent holding charge on land is implemented that housing prices drop. Why? The higher holding cost for land ownership will see the main component of an auction price – the land – pushed down through added supply. Land bankers will become land (& housing) builders.

Spinoffs include benefits to the poor when GST and (in time) income tax are abolished by the transition to holding charges on land through a Land Value Capture tool. Anyone for self funding public transport?

Braybrook’s Central West land bank has been a gravy train for close to 5 years, with a handful of building teams limping the supply of auctionable houses along. One can see this by looking at the top right hand and bottom left hand corners to see many vacant blocks of land. An auction is held every couple of months. In the meantime, young families are forced to live on the outskirts, spewing pollution and steaming in frustration by the time they return home from the commute.

Future home owners are being held to ransom by a tax system that encourages wasteful use of our most precious resource – land.

• Central West Land Bank



























• Laverton Land bank