this week we released our 7th Speculative Vacancies report – Empty Investment Homes Ignored, finding 46,836 empty homes in Melbourne. Read the press release.
Despite your valiant efforts in bending over backwards to provide extensive land re-zoning both in the outlier suburbs and here in the CBD, a fundamental economic problem is undermining your work. With investors now running over 40% of housing loans in Melbourne, investors are crowding out first home owners. It is housing use rather than supply that is the issue in an alluring world of 23 advantages for property investors. When this is combined with the incredible mobility of capital, speculators can easily ignore the effects of 50% income expenditure on mortgages in voting communities. Are you happy that soon we will be taking out 50 year mortgages? That’s not the sort of freedom a visionary leader can be happy with.
What are you going to do to ensure the Liberal Party moves to reform a fairer use of our valuable land? When the capital gains for a median Melbourne house has bumped up to $60,000 y.o.y and rents are barely $18,000, there is less and less incentive to rent a property out.
In the sprawling suburbs we see first hand examples of developers drip feeding housing in a scientific manner, in ‘staged releases’ of 10 – 20 properties depending on demand. Dennis Family Homes, for whom taxpayers have just paid some $50 MILLION each for two train stations, is up to a staggering Stage 128. And they have barely started. Is this not an example of price manipulation?
Developers begged through the 90s and 00s for 15 years land supply. We recently found that developers nationally hold 14.9 years of land but all they have done is reduce the size of houses to maintain the per metre value of land in the sprawl.
Way back in 2006 you attended our Please Explain, Mr Brumby lecture in your seat of McEwen (Craigieburn). At the time you said you had never heard of these concepts and found it very interesting. Now we must ask of you to Please Explain, why with the most vigorous re-zoning agenda on record has the housing affordability issue only got worse under the Napthine Government?
Do you support removing the $36,000 imposition on moving (AKA Stamp Duty) with a holding charge on land? As 30 years of government tax reviews have told us, a broad based Land Tax has many more advantages for Victoria than a GST.
I invite you to appear on my drivetime Renegade Economists radio show (next Wednesday 5.30 – 6pm) to earnestly discuss the good, the bad and the difficult of planning for housing affordability.