Re. “The crisis in our housing markets” (yesterday, item 2). David Imber is right to point to the self-seeking publicity from the real estate industry. I’d like to add that the emotional term “home” and the more neutral one “house” disguise the fact that the largest component in domestic property prices is often the land.
Travelling through country Victoria over Christmas I saw many houses in agent’s windows half or even a third the price of otherwise equivalent properties in my city, Canberra.
The reason that the city properties cost more is simply demand — that is, their value derives from the proximity of services and employment, not the hardware that goes into their construction. House prices are rising, too; not because of better hardware, but because of demand.
What we need to do is to slice off this unearned value increase and return it to the people who created it (the Australians who provide the demand and the services), not allow it to slip unremarked into the pockets of “property developers” and “investors”.
Despite the logic of this solution, do you think it will happen?
No way — almost every legislator in this country has property investments and is counting on pocketing some unearned value for themselves — the parasites. The Tenants Union is probably one of the few places to look for unbiased policy advice in this area.