Home Buyers Strike on Red Symons ABC

I should have known better....
Creative Commons License photo credit: patries71

Our campaign made ABC prime time radio at 7.22am this morning. In good humour Red Symons begins the interview with “I’m completely and utterly against whatever you are standing for!”. Listen to our campaigner David Collyer explain why now is not the time to be buying property. (running time 5.53).

In case you need more convincing that now is not the time to buy, auction supply levels were up 46% in February (year on year) according to SQM Research (subscribe to their e-news then click on E-news Archives and Stock up for February.

However, property sales volumes were at their lowest levels in a decade in 2010 according to RP Data.

The big question is, where has this mystery supply of properties appeared from?


  1. Matthew30-03-2011

    Stamp duty is the most disgraceful tax ever on mankind.
    Stamp duty was introduced in the 18th century to pay for the English French wars. It was a tax on the wealthy, those who owned their own homes. Stamp duty was meant to be abolished with the introduction of GST.
    $30K of stamp duty added to your mortgage will cost you $110,000 after 25 years. Interest for the banks, cash for the Julia Liars government- do not buy houses in Australia and fund Gillards wasting.

  2. Karl Fitzgerald
    Karl Fitzgerald30-03-2011

    Well said Matthew. It also penalises the turnover of property, deterring sellers until the price rises over the expected stamp duty hit.

    Far better to follow what Dr Ken Henry proposed – replace stamp duty (& negative gearing) with a higher and flatter land tax on all property. Then we could cut income, corporate and GST so we could compete with leaders like Hong Kong in terms of attracting genuine business, not speculative capital.

  3. alan30-03-2011

    This is all rather commendable and understandable, but the reality is that on the other side of the equation you are suggesting that the people who have slaved away for years
    Paying off their mortgages would potentially have their property values halved.
    Be realistic in your goals, this is what bought the world to its knees during the GFC, the Government of the day, the Reserve Bank and the banks just could not let it happen.
    The problem with housing is the cost of land, the houses standing on them are not, they are generally fair value.
    One possible way to lower the cost of land is for collectives to form and purchase land for development which would remove the profit for the developer or another is for the Govt be it State or Federal develop land and lease/rent to a prospective tenant who would only own the improvements, that is house etc.

  4. Karl Fitzgerald
    Karl Fitzgerald30-03-2011

    Alan – if people have paid off their mortgage, or those that are part way thru and can maintain their incomes, then in time land values will somewhat recover. This is a 12 year bubble, the longest in our history according to respected land valuer Bryan Kavanagh, so when the correction comes it will unfortunately be ugly.

    Regarding collectives – please see our posts on Canberra, especially Australia’s most innovative housing policy, the ACT govt’s Land Rent Initiative. You should become a member Alan ;)

  5. Miles30-03-2011

    Nice idea alan. Collectives buying land. Create the website and they will come. I’m from the UK so know about housing bubbles and crashes. People tell me “we’ve never had a crash here”. Is that true? Australians have never experienced a housing crash? I guess it’s going to come as a nasty shock. A bust won’t be so bad. It’ll just give this generation a chance to buy a home. If the house you live in is worth 20% less in 12 months, what difference does it make to you, the home-buyer, if you intend to keep living in it? If you’re a property-investor(and that seems to be the problem in Australia) you might get burnt. So be it. In Europe a house is a home first. Here a house is an investment. Australians must start to think differently if their children are going to be able to buy a home. If my $500k house drops in value to $400k that’s OK with me. The house I want is currently $800k but it will drop to $640k. I’ll be $60k better off. Falling prices could be a very good thing for a lot of Australian families.

  6. Gordicans30-03-2011

    As admirable as your organisation’s aims are, I find it a little naive to talk of strikes etc if the actual cause of high house prices are not understood and attacked. Anything other than doing that is simply pissing in one’s pocket and playing with the steam.

    There are other ancillary causes (first home buyers grants, low building rates etc) but the primary reason for high house prices in this country is high immigration rates. Until the high immigration rates causing high population growth rates are addressed, we will have high house prices. It’s not rocket science.

  7. BBB30-03-2011

    BANK CREDIT is the cause of high property prices. Regulate this and you regulate price growth.

  8. Simon30-03-2011

    This is ridiculous, your asking people to cause a meltdown. If the housing prices fall in Australia, we all won’t be doing so well. Yeah follow this method, and create a crash, I mean who wouldn’t want to bring on misery quicker right?

    This guy starting this obiviously wants to buy a few cheap houses too. All you will be doing is helping people like this control the market, and reap the benefit of planned foresight.

  9. Andy30-03-2011

    Sorry Simon but control is an illusion. No one is being asked to cause a meltdown. This is how capitalism works… We overshoot, particularly with distorting taxes that reward speculation. No one but the Government and the Banks can be blamed for this. The fact that a large majority of Australians are unable to afford housing is the only thing driving the popularity of this campaign. Prosper is right to raise awareness of this issue – anyway that they can.

  10. Andy30-03-2011

    @Gordiacans Says: You’re showing your ignorance and compounding it with comments like ‘its not rocket science’. Anyone who bothers to check facts before making statements about the relationship between immigration and house prices should know better. If immigration was the real driver, why the high vacancy rate? Or are you unaware of this as well? Read & think more / talk less…

  11. Toluol turkey30-03-2011

    Nonsense, Simon. Seems to me Prosper Australia isn’t wanting to create a meltdown, but to warn new buyers of the extreme risks they face if buying into the current market. Some are largely unaware their new mortgage will shortly be underwater when the bubble bursts.

  12. Kane Sherwell30-03-2011

    That is fantastic, 1st home buyers deserve a easier run.

    Check out my site, I aid first home buyers by getting the banks to pay $1000 for going direct.

  13. Yendis30-03-2011

    Warning people of an impending fall in the market is all well and good. Knowing what part of the market is falling is even better. The price of a basic 20sq home still hovers around $150,000. Anything more for the “property” is land value. Land value is the elephant in the room. If saying that the land of Australia belongs to Australians means anything, then the value of that land must belong to Australians. Collecting that value is practiced by all state governments in the smallest way they can. They have been reducing land value rates (local government) and the State “Land Tax” for years. The result is the present huge bubble.

    Add the FHBG and things have really wound up. The politicians need pulling into line. Looks as though some of you have started that process…

  14. Gavin R. Putland30-03-2011

    Yes, stamp duty impedes property transfers. In particular, it impedes the transfers that are needed to bring new accommodation to market, and therefore raises prices and rents. And because the duty applies to the combined value of land and buildings, it must have some deterrent effect on the construction of those buildings, further reducing supply and raising prices and rents.

    Fortunately it’s quite possible for taxpayers to gang up and stage a STAMP-DUTY STRIKE. If you don’t already own property, all you need to do is to participate in the buyers’ strike. If you already own your home, then instead of selling and re-buying next time you move, you can put tenants in your old home and rent the new one: http://www.onlineopinion.com.au/view.asp?article=7291&page=0 .

  15. Jan31-03-2011

    I hope you guys make it. Big Business will probably shut you down before you can gain too much ground. Great idea though! Around here I know baby boomers who own four houses and their children cannot even afford one. I guess they hope to inherit it all one day, but it seems a bit unfair?

  16. John Topping31-03-2011

    As a property valuer and land economist, I agree with David that it is not the right time to be investing in property in Australian.
    However, there is no need to call a buyer’s strike. I think common sense will prevail. Why buy a property in Australia that gives a net rent return of 1% to 2% and has very poor prospects of capital gain over the next ten years? There are plenty of offshore property markets that offer 6% to 7% net rent return and have much better prospects of capital gain. It’s simple logic.
    As for all the ostriches with there heads in the sand that havn’t noticed property prices falling over the past two years, let them dream on.

  17. Mark Wadsworth31-03-2011

    Keep up the good work!

  18. Fadi31-03-2011

    To my fellow Australian
    Look at what happen in our state, the housing bubble and learn form that.
    I have a lot of friend in Arizona that they are upside down on their mortgage and they lost their retirement saving, I was one of the lucky people that did not buy a house during that 2005 mess,
    It is very ugly when that bubble going to burst, if you really want to see that come over to Arizona and I will show you…5000SF homes were sold at $1mill now it is around $500K

  19. Glenno31-03-2011

    Saw the interview on Sunrise today 31/3/2011.
    Why did David Koch say lower house prices would result in 10% unemployment. What a BS statement.
    Lower house prices would stimulate more buying and increase production of home building, not to mention lower mortagage debts on buyers, leaving them with more to spend on life’s fun things like a night out or perhaps a new pair of shoes…..

  20. allen white31-03-2011

    This is a great idea! But how can we raise community awareness. I would love to have a “Don’t Buy Now – Not for Sale” sign, just like a spruikers, outside my home! Where can I get one??

  21. Karl Fitzgerald
    Karl Fitzgerald31-03-2011

    Well said Glenno. The problem is that since the hollowing out of manufacturing, so many people are employed in housing. That’s the government’s excuse. Gen X,Y are meant to bend over for the next 25 years with huge mortgages….and pay extra to finance the boomers alzheimers. How convenient that some will be able to forget the pain they have caused.

    Interesting that Iceland, who let their banks fail, is recovering faster than the UK, USA who bailed out their banks, their ‘developers’.

  22. Ru31-03-2011

    What are you people talking about? Don’t you know that house prices double every 7 years! We’re running out of land!!

    lol, nah, just kidding. This market is going to fail spectacularly. Maybe this movement is enough to prick the bubble, but at the very least it should serve as a warning to those most vulnerable at the bottom of this ponzi scheme.

    We just need to spread the message, get this going viral even more than it is now. Even if direct action isn’t very successful, the fear campaign could be.

    BTW, the Resource Rentals tax reform is a fantastic idea.

  23. Chris31-03-2011

    This all sounds great in theory and I commend the intent. Unfortunately, it fails to address the prime cause of inflated real estate prices, land shortages and what I call too much investment.

    Thanks to red tape it takes forever to get land onto the market and almost inevitably demand outstrips supply.

    Economics 101.

    This situation is further compunded by resistance of coastal residents in cities like Perth to any form of high rise residential deelopments.

    That opposition feeds prices and creates another problem which is acute in Perth, urban sprawl.

    There are a few issues that need to be faced, especially if, with the exception of Queensland, Australia continues to hold the bulk of its population in the major capital cities. Land has to be released faster and density of living must increase.

    Additionally, we have to question whether large scale investment in private real estate is good for the community as a whole. In Western Australia at the peak of the housing boom in 2006 70% of all real estate purchases were investors.

    For example, in Perth, urban redevelopment has seen some less desireable suburbs public housing estates redeveloped and sold. Great idea. Especially as the housing was by any reckoning affordable. People who could not afford a house had the chance at semi resonable prices.

    Problem was investors snapped up most of them. A covenant could have been attached requiring purchasers to be owner/occupiers, therefore excluding investors and in turn financial drive for capital growth, rather than a chance to own your own home.

    Failure to address these issues and land prices will continue to rise. It’s an economic certainty.

  24. Gavin R. Putland31-03-2011

    For Matthew and Karl: STAMP-DUTY STRIKE launched – http://is.gd/psd_strike .

  25. Simon31-03-2011

    Sorry I was smart enough to buy my house before this happened, I’m only young and I watched alot of people live off the success of Australia. I bought my home from a very young age, it was hard, I watched alot of people living life up, cars and endless pockets, not planning for the future. These are the people whinging now. These are the people complaining saying its to dear.

  26. Fadi01-04-2011

    Why the housing market gone that high???? watch out fopr the bubble, just like what happen in USA.
    I am warrning everyone out there.

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