What We Want – Buyers Strike

The Home Buyers Strike was launched to warn prospective home owners that now is not the time to enter the market. Sign our Total Abstainers Pledge so we can demonstrate that this is a genuine movement for people who expect that housing is a human right, not a speculative priority.

As of this noon today, 1100 people have signed the pledge nationwide. If 200 are from our hometown of Melbourne, this weekend’s 1000 auctions will be quieter. Two hundred people will be saved from 25 years of mortgage misery. We can’t sit by and let innocent people bail out investors who are leaving the market in a screaming rush. Auction supply levels have been at spring frenzy levels for too long. The alarm bells are ringing loudly but nobody is warning buyers.

Resources:
Lobby Your MP Letter
Buyers Strike Video
Home Buyers Strike poster (PDF) – pin it up in your local laundrette!
Home Buyers strike poster jpeg – better for email.
Sign the Total Abstainer’s Pledge

What We Want

  • 10,000 people to sign our Total Abstainers Pledge
  • Negative gearing limited to new home construction, then phased out completely
  • Stamp Duty eliminated
  • Abolishing First Home Owner Grants (never again!)

Prosper’s longer term aims include:

  • Funding the abolition of stamp duty and negative gearing with a higher and flatter Land Value Tax
  • Reducing the threshold on Land Tax to zero
  • Continuing to transfer taxes off incomes, GST and onto fixed assets like land, iron ore and the electromagnetic spectrum.
  • Government’s at all levels are guilty of turning land and housing into a speculative commodity. To think we will avoid the calamity that has hit our northern neighbours defies economic logic. Our 12 year housing bubble is the longest on record. $805 billion has been capitalised into a bubble of epic proportions. Land Value Tax is the only tax that can’t be dodged via tax havens. It also turns off the speculative spigot, transforming land bankers into active builders. The Henry Tax Review stated that Land Tax will be inevitable in a highly mobile world. The global fetish with property bubbles only underscores this.

    A special thanks to Bullion Baron for putting our original press release on GetUp and all those who helped the Buyers Strike storm up the GetUp Suggestions forum from #111th to 1st place in barely 2 weeks. The importance of this issue must be rammed home to those running the country. Raw numbers are all that counts for them.

    See all our Home Buyers Strike posts

    Don’t Buy Now Twitter page.

    Join our Home Buyers Strike facebook group where comments like this zinger from Adam came through overnight:

    Hey everyone it’s great to finally see a movement like this. I have already bought a house, and am now up to my eyeballs in so much debt that i am under a constant dark cloud of stress and anxiety. I laugh in contempt every time i hear an evil fat baby boomer describe how it was just as hard in their day, and then i’ll go to an auctio…n out of interest and watch in despair as the young couple holding a child, meekly trying to bid for a simple roof over their head gets trampled by a silver haired Mercedes driving asshole adding yet another property to their already disgustingly bloated portfolio.

    Politicians couldn’t care less as they have two major concerns. Firstly, their own wealth, and secondly, the votes of their bloated wealthy voters and campaign donators.

    Bring their world of greed down!


    Media links:

    David Collyer on Ch7 Sunrise
    Online campaign targets high cost of housing
    Property Market slump – Blame Me – the ball starts rolling
    Home Buyers Strike Attempts to Cripple the market – yahoo scaremongering.
    First Home Buyers strike growing – Herald Sun

    Remember the importance of taxing the right activities by listening to:

    David Collyer and Karl Fitzgerald discussing the Home Buyers Strike (23/03/11) on the Renegade Economists
    Magic Money – week 3 of the Buyers Strike on the Renegades with a number of interview highlights played. See the show notes.

    Taxing Mines – Background Briefing

    Let’s hope this campaign gets a few people looking at the economic justice we are missing in the current system. If wages are so limited vis capital gains, we must ask what sort of capitalism our leaders have planned for us. Is paying 40% of our incomes for somewhere to live the sort of freedom we are satisfied with?

    The Prosper E-news service can be signed up from the home page (half way down the right hand side).

    24 Comments

    1. Josie31-03-2011

      This morning I rang a local real estate agent to ask the price of a dump in our neighbourhood. Good full block, good neighbourhood, Perth, western suburbs. House is a wood and asbestos knockdown that has been sitting there for a few months with a big sign and a dumpster bin out the front, but was not on the agents website. So walking my kid to school I called the agent to ask how much. We live in a small unit that we own in this good suburb, and we can’t afford to move, but hey, this place is a dump right, and there have been no offers, right? Well, the nice man said $1.5m. I laughed. Or snorted. I Knew there was a house up the road – another dump but on a fabulous street with a huge block above an enormous park with ocean views, that had languished at 1.5 for about 6 months. Someone has just offered about 1.1 I think. So I laughed, which is an offence to real estate agents, since they have no sense of humour and are unable to engage in self-critical moments as that would burst the bubble of bullshit. He said that there had been a great deal of interest. A great deal, and it was almost under offer.

      Almost, but not quite.

      Well, there you go.

      More truth from the most undignified, unworthy and double-edged profession in the business.

      I love the idea of first home buyers as participating in a ponzi scheme. Brilliant. I think all Australians who need homes to live in should stop buying homes. Let all those on the oilandgasdrip buy up our real estate and run them into the ground and we can all move in together and form our own government.

      Real estate is a joke in this country.

    2. First Home Buyer31-03-2011

      How about also campaigning for regulation of the RE industry?

      I can’t think of any other profession that allows people to tell clients that “prices never go down”, promise returns of 20% per year, advertise for $1000’s less than the real selling price.

    3. Karl Fitzgerald
      Karl Fitzgerald31-03-2011

      good detective work Josie. SQM research enews archives has a ‘stubborn vendors’ list. A number of properties have been on the market for over 1000 days, the #1 property on the list actually increased their price by $120K during that time. This is the unfair advantage private property owners hold over wage earners (and why we need a decent Land Tax system in place).

      First Home Owner – fair call – there should be a Housing Ombudsman … Neil Jenman has been on the case about these issues. Who can believe the Minister for Housing?

    4. frustrated31-03-2011

      sorry i think this is just rubbish! the only reaosn people are snowballing into debt and cant afford their payments is becasue they are buying out of their means.
      if you cant afford to buy then dont!

      i just bought my first home and am living quite comfortably – still have foxtel, internet, 3 dogs, 2 cars etc?

      working in a real estate agency i know what goes on behind the scenes – 80% of the time it isnt the agent that states the price its the seller and there are many people asking way too much for what their house is actually worth atm. An agent researches what has sold around the area, gives the seller a ball park figure and then it comes down to the owner with what they want!
      Too many agents are just after the listing and are not working for the owner.

      So people need to stop bagging out agents and actually start pointing fingers at sellers!

      And as for banks not lending to first home owners what crap – again i just bought my first home and had finance approval within 48hrs? again it comes down to people buying out of their means – banks arent going to lend $500k if what you earn can only give you $300K – its not rocket science people!

    5. John Ward31-03-2011

      Great site, great idea. I visit Oz a lot, and I’ve never seen a property bubble so inflated – and I’ve lived through three in the UK!
      Australia is in blissful denial about the factors bound to doom the property market:
      1. Recession as China slows down
      2. Salary to average price index is miles out of wack
      3. Interest rates must rise soon because of China, US, UK and EU problems.

      Get real now – keep giving out the right advice!
      http://hat4uk.wordpress.com/2011/03/30/breaking-us-government-bond-spreads-in-historic-narrowing/

    6. Gavin R. Putland31-03-2011

      Elimination of stamp duty on property purchases is the aim of the STAMP-DUTY STRIKE: http://is.gd/psd_strike .

    7. Anne Williams31-03-2011

      Great campaign.

      I might as well jump off a cliff now then. How dare you interfere with peoples lives.
      Built my house and moved in 2009. Got cancer. Put house on market 6 months ago to a crashing market as I can’t work anymore to pay the mortgage. Now can’t sell even to get costs back and pay mortgage and you think you are clever. Hope this stays in your mind when you think about the affects it’s having on real Australians.

      I am sure you all have lovely equity in your houses but for the real people on struggle street, like new home owners who can’t afford to keep repayments going due to interest rate rises, you are handing them more debt.

      Go away and find some other great cause to play with.

    8. Karl Fitzgerald
      Karl Fitzgerald31-03-2011

      @Frustrated – perhaps you would be willing to perform in our new Reality TV program: where property investors get sent out to buy a 1st home on the current av wage…

    9. Karl Fitzgerald
      Karl Fitzgerald31-03-2011

      @Anne William – the market was already crashing before we launched the campaign. All we are hoping for is that more people don’t end in a hole. I hope you are not saying that others should suffer because you have? It is difficult for all. Why should we sit by, allowing the government to continue to do this….to allow such bubbles to occur in the 1st place?

    10. stevieb01-04-2011

      The harsh reality is this – over the last 10 years melbournians have been seduced by greed and the promise of fast profit.
      Hell, there were even TV shows and mags about how to make a mint by buying and renovating.
      What we’re seeing now is the result of the 10 year generation’s race for greed.
      Those obsessed by the pursuit of money have no compassion for the generations coming up behind or anyone else for that matter.
      It’s a disgrace that Australians allowed themselves to succumb to greed .
      I hope and prey that it all collapses soon, as it should.People need to know that investments can fall as well as rise and there is no such thing as a sure thing.
      The answer will not be solved with new developments as these new developments are selling dog boxes for 400 grand- again, an attempt to profit on todays disgraceful over inflated market.
      It the government is doing nothing about population and new developments are out of the reach of even first home buyers then there is only one solution- refuse to buy , refuse to be ripped off, sit back and wait.
      Don’t buy into this psychotic episode that is the housing market.
      Help reduce demand to zero and start to right this terrible wrong
      it will come crashing down to what is fair and reasonable for those people looking for a home and not an greed driven investment.

    11. James01-04-2011

      How is it that we give tacit recognition to values of fairness and respect for land/place in indigenous culture and religious traditions, and simultaneously allow it to be used as an asset to gain economic advantage at the expense of people in need?

      Do people really comprehend the despair and difficulty faced by single parents and others who have no chance of any domestic security because this market has become so inhumane?

      The importance of land in our society is reflected in laws and statutes which themselves are a massive investment, and the profession (government and private) that guarantees security of land tenure in Australia is possibly unmatched anywhere else of earth. These people do real work. The speculators do not, but they are dependent on the former.

      It is time that the trading of land was subject to the same societal values. Speculative gain and associated pressures leading to ridiculous prices indicate that some industries and many individuals are operating in a glass bubble – with one-way glass. First home owners will continue to be forced outside unless something is done.

    12. Anon01-04-2011

      My comment is simple mathematics.
      Let’s say I want something average in today’s market.
      $400,000 @ 7% for 30 years.
      (400000*.07*30) divided by 2 gives me an average interest bill of $14,000 per year every year for the next 30 years.
      Say I am 35 years old, which means I don’t own my home until I retire.
      Presume I’m currently paying $400 per week in rent.
      That’s $20,800 giving me an affordable $6,800 to pay off the capital of my loan (not including all the additional costs associated with my own home).
      At this rate it would take me 58.8 years to pay off my first home which the bank has only given me a 30 year term (because I’m not likely to live 58.8 more years to actually pay it off.
      So I’m paying off a 58.8 year term in 30 years, or to say, for the next 30 years I’ll be paying off about twice as much as I can afford.
      And that’s why I cannot afford to buy a first home for my family.
      A home today is not security for my family, it’s an endless money pit.

    13. Jane Quinn01-04-2011

      Thank the lucky stars I’ve found this site, after watching Kochie on the morning show trying desperatly to be tactful with his comments “but you don’t want to see a market downturn?” or something like that.
      I have been feeling that there has to be another way to find affordable housing. My adult children have just moved back home (we rent) because they cannot afford rent, never mind attempting to but a place.
      I have been racking my brain to think of a way apart from as someone else commented – all moving in together, to own a home. My plan is to (maybe) buy a block in the bush for 10,000 (there are about 200 in WA)up to this price and put a kit home on it by retirement time. I will have to live in the bush, inland, far from the ocean that I love but can go to the sea for holidays. Either that or is anyone willing to find 400,000 people to put up $1 each a day and then keep paying the $1 for the next house untill 400,000 days later we’re all dead!

    14. Ian01-04-2011

      My reply to Anon’s post above.

      It is accually a lot worse than that.
      The following is straight from the CBA home loan calcualtors.

      Loan amount $400,000
      Total interest charge $557,357
      Total repayments $957,357
      Loan term 30 years and 0 month(s)
      Lump sum repayment Not applicable
      Show detailed summary Loan Schedule
      Months 1 – 360
      Repayments $2,662 per Month

      NOTE:
      Payments made over the 1st 5 years of a 30 loan are
      about 85% interest. You pay $159,720 in payments and only
      about $23,500 is paid off your loan, $136,220 was interest you paid.
      That is why many call a 30 year loan a mugs loan.

      To qualify for a home loan for $400,000 the applicants must
      fill the following critiers.

      2 combined applicants: (no children)

      * A combined income of $72,500 per year.
      * No credit cards or loans at time of application.
      * A minimum of $20,000 deposit.

      Single applicant: (no children)

      * An income of $72,500 per year.
      * No credit cards or loans at time of application.
      * A minimum of $20,000 deposit.

      2 combined applicants: (1 child)

      * A combined income of $80,500 per year.
      * No credit cards or loans at time of application.
      * A minimum of $20,000 deposit.

      2 combined applicants: (2 children)

      * A combined income of $87,000 per year.
      * No credit cards or loans at time of application.
      * A minimum of $20,000 deposit.

      Single applicant: (1 child)

      * An income of $80,500 per year.
      * No credit cards or loans at time of application.
      * A minimum of $20,000 deposit.

      Yearly income to borrowing power:

      $35,000 per year = $152,958
      $40,000 per year = $188,627
      $45,000 per year = $221,395
      $50,000 per year = $254,163
      $60,000 per year = $319,699

      Yearly income to borrowing power:
      (with 1 child)

      $35,000 per year = $102,778
      $40,000 per year = $138,447
      $45,000 per year = $171,216
      $50,000 per year = $203,948
      $60,000 per year = $269,520

      Yearly income to borrowing power:
      (with 2 chilren)

      $35,000 per year = $55,258
      $40,000 per year = $90,928
      $45,000 per year = $123,696
      $50,000 per year = $156,285
      $60,000 per year = $221,121
      $80,000 per year = $353,193

    15. Tim Hamilton01-04-2011

      Please see my contribution to the debate at the website below:

      http://cpd.org.au/2011/03/tim-hamilton-costing-us-the-house-reforming-policy-for-affordability/

    16. Kelvin Thomson01-04-2011

      During 2009 housing affordability around Australia declined by over 22% due to a massive gap between the number of dwellings being built and the number of new people wanting housing. The Housing Industry Association said Australia’s fast growing population was pushing new dwelling requirements to record high levels. The inevitable consequence of this is rising house prices, rising interest rates and declining housing affordability.

      Escalating population growth will mean Melbourne will almost double and reach 7 million people, Sydney will become a city of 7 million people and Brisbane will double to four million. Metropole Property Investment Strategists Research have forecast that median house prices will be well over $1 million in every capital city at the end of this new decade, and in many cases considerably more. John Edwards, an economist with HSBC, has noted that Australia’s high level of migration is going to keep upward pressure on house prices. It is a similar situation for rent. The General Manager of Australian Property Monitors, Michael McNamara, has said the shortage of rental properties will continue to worsen because of rising migration.

      Property developers and the real estate industry talk about declining housing affordability too, but their solutions are always on the supply side. They want new suburbs on the urban fringe. Never mind the traffic congestion and loss of open space this urban sprawl causes. Henry’s tax review accepted the impact of population growth on strong underlying demand for housing but his emphasis was on supply-side solutions. I believe, however, that runaway population growth is damaging our young people’s chances of buying a home. Our children’s chances of buying their own home are fading away, and unless we take steps to tackle runaway population growth, they will disappear.

    17. Gavin R. Putland01-04-2011

      Dear Mr Thomson MP,

      In a country with about 7% of the population of the USA, but with more expensive housing than the USA, population growth may be responsible for many evils, but unaffordable housing sure ain’t one of ’em!

      What about the vacant inner suburban lots that aren’t built upon because municipal rating systems tax values of buildings, and because land tax isn’t high enough to force owners to generate income from land?

      What about the investment houses that lie empty because in order to negatively gear them, you don’t actually need to get tenants, but only need to pretend that they are available for rent?

      What about the neglected boarded-up properties that don’t even pretend to be available for rent (again because land tax isn’t high enough), and which consequently don’t figure in official vacancy rates?

      What about the developers who drip-feed land to the market because land tax isn’t high enough to make them develop and sell their land banks more promptly?

      What about the rule that allows investors to negatively gear existing properties, so that they don’t have to add to the supply by building new properties? What about capital gains tax discounts that similarly don’t require investors to contribute to the supply?

      Ah, but if you wanted to address any of those issues, you’d have to take on people with real political clout. Much easier to pick on migrants.

    18. Gavin R. Putland01-04-2011

      P.S.: A colleague has directed me to:

      https://secure.wikimedia.org/wikipedia/en/wiki/File:Real_Melbourne_House_Prices_1965_-_2010b.JPG

      Note the lack of correlation between home prices and population growth, and the stronger correlation with monetary and tax policies.

    19. Mr. Sheeple03-04-2011

      Buyers strike sounds great.

      But have you considered the implications of a bubble burst?
      -What are you going to do if the government reintroduces the bank large deposit and wholesale funding guarantee to stabilize banks? They’ll bail the banks with the taxpayer’s money. Sweet!

      Its a win-win situation for those who run this ponzi scheme: the politicians, the banks, the developers and the real estate industry.

      “…expect that housing is a human right, not a speculative priority.”
      -Get real! We are no better than the livestocks that are raised!

    20. Miles04-04-2011

      What is shocking for new migrants from UK, USA and Europe is the poor quality of new homes being built in Australia today. $650k is silly – but for a house built of cardboard!!! You Australians are nuts. Half the homes in Sydney going for $900k are build of board and asbestos. They are SHEDS and would be worth zero in most countries we compare oursleves to. $500k buys you a lovely, brick, detached house 45 mins from London. Have a look at http://www.rightmove.co.uk and see how proper houses are now so much cheaper in the UK. When did London houses become cheap compared to Sydney? When did Australians think paying 60% of income to pay off a mortgage was OK? If house prices don’t come down in Aus, there’ll just be a generation left out in the cold.

    21. Daniel Kelso06-04-2011

      I’m 39, with wife and young daughter living in Sydney. It shames me to say I don’t own my own home. The family home right now is a rented three bedroom townhouse. Saving the required deposit poses a significant, perhaps insurmountable challenge on my modest income. Maybe that’s for the best. I’d be financially crippled for the rest of my working life. I’m surrounded by people so proud to have gotten a foot in the property market. And they tell me rent money is dead money. Perhaps so. But what do they call the interest payments they’ll be paying for the duration of their mortgage? They commit themselves to this massive financial burden with a clear understanding that the value of their property will always increase. It’s just supply and demand pure and simple. They’ve little comprehension of how negative gearing and other taxation systems keep the market artificially high. That’s just foolish mumbo jumbo that doesn’t affect them. For now, they live in blissful ignorance. Should I feel guilty if sanity ultimately prevails and prices plummet resulting in my friends and colleagues losing all they’ve worked for?

    22. Billy Boy07-04-2011

      After looking at 500 odd properties over 2-3 years, only to be chasing the tails of landbankers, inheritees, empty nesters, & predatory investors,it makes me puke to see papers running articles on the post-war home buyers rubbing their mits in glee at their $23,000 home selling for over $1.5 million! That is 65x what they paid or a whopping 42,000% tax free profit! I think the demolition of housing co-operatives and demise of a public housing presence in the market is a disgrace. It makes me feel sick that, as an Australian, governments of both persuasions (state and federal) and the well-heeled NIMBY lobby, are more interested in the stellar increases in landholders equity than a mum and kids living in a car or tent. Whilst I do not condone detention centres, I equally detest a man living on the street, or young Australians living under a bridge. Hang you head in shame Australia. Look what you have done to your children. In less than 10 years, you just threw them to the mercy of landlords.

    23. Karl Fitzgerald07-04-2011

      @ Billy Boy & Daniel, let’s hope we can keep building our numbers into a political force. It is just so frustrating with the ‘rising property prices are good for everyone’ news media hype line.

      This needs more work but what say you on “If rent money is dead money, mortgage repayments are bank profit dismayments.” a slogan is coming….

    24. Vivienne07-10-2011

      The problem is not population size so much, but our unsustainable population growth rate, that is pushing up prices. Immigration levels ensure the demand for housing, a basic human right, remains high, and the “shortages” all spurn the prices upward due to more competition. With only a small amount of arable land in Australia, much of it is being destroyed for more “developments”. Why are people so frightened of facing up to the fact that our immigration rate is unsustainable – socially, environmentally and economically? At a net immigration of 70,000 per year, our population could be stablized, and there would be enough housing for everyone.

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