That’s essentially the message from the February Housing Finance figures.
With the property market bubbling at extortionate levels, housing investors have decided to go to sleep at just the time they are most needed. In seasonal terms, housing investment fell in total by 3.4%.
Housing investment crept upwards by just 0.4% in February. Owner occupied investment again fell significantly by 3.1%.
This signals that genuine home owners are stepping away from the market. First Home Buyers again fell, this time by 2.3% from 20.5 to 18.1%. Thankfully they have wised up, remembering that they peaked at 28.5% of all purchases in May 09.
That’s a 10.4% drop in home acquisition by exactly the people who should be buying homes.
One can only conclude that the people who need homes have been scared away by a mix of institutional and foreign investors.
Have investors only remained in the market because of beneficial tax breaks?
Developers have gone on holiday, realising that they can reduce risk and increase profitability by rationing supply. This is the unique aspect to housing. Scarcity breeds desperation in a market with no alternative.
Our colleague Andrew Sadauskus calculate that there was over 1 year’s supply of auctionable properties sitting vacant throughout Melbourne.
But yet the media is littered with comments that land supply is to blame. Drive through any recent property development and you will meet families struggling to meet their mortgage as they innocently pass the ubiquitous vacant block, sleeping idle until the time has come for its rationing.
In the meantime those poor first home owners who are buying 45km’s north of Melbourne are forced to spend an hour each way in traffic jams.
Why are government policy analysts asleep at the wheel? Property is not a productive investment vehicle. No matter how much foreign investment, you can’t produce more land. Such investment can however, make those lucky enough to already own even wealthier.
The Henry Tax Review had better recommend a higher, flatter Land Tax so that such property bubbles become a thing of the past. Perhaps Brumby could show some vision and replace stamp duty with a higher, flatter Land Tax.
Without such a reform, property (read land) speculators can continue to earn more than most of us in their sleep. Why be a working family KRudd?
Strike a match for prosperity over short-termism KRudd, Ken Henry.
My Letter Regarding John Irwins letter to the Northcote Leader
His opinion comments of just take a look around at all the new cars filling the car spots of public housing tenants
Response:-Come on John, don’t be silly, Public housing tenants should not be forced to live out your stereotypes of driving old unroadworthy
Rust buckets and clunkers, that are a public safety menace and pollute just so they look in keeping with your hobo public tenant Idea’s to match the era of the building. Your idea of ‘deserving’ looks something like old eastern block communist Europe and gated community’s with no signs of luck or progress. If you want to take pot shots at the undeserving, level it at the greedy interstate and local investors, doing Victorians out of affordable housing and the state and federal government that encourages it with out 1960’ tax system that only encourages multiple property portfolio land and property speculation, while doing first home buyers out of a bid.
One Last word, Clithroe was Late night Live ABC
Does anyone know whether he was all for the FHBG that now has thousands of couples in financial trouble? with intrest rates up. I suspect he would have been all for the FHBG,’Money for Jam’ its simple clown casino ‘economics 101’ tony, and all the other cliche onliners, He seems to be a merchant of the positivity of that 1980’s power dressing, baby Boomer dellusion corp cult mentality of the past four decades? which is comming to a rapid close.