Wage growth suffers from record increase in Australian land prices.
“The $593.7 billion uplift in land prices announced today is thirty times larger than total banking profits. The average annual gain has been around $180 billion, so to have an increase some $400 billion higher than normal shows just how much money has been made in real estate in the last year. Such significant increases are detrimental to the economy. This is the second largest increase on record.” said Prosper Australia President Catherine Cashmore.
“The ABS quantified Australian land values at $5.76 trillion. This is more than three times the size of all companies listed on the ASX. Few talk about the effect of rising land prices on wages or consumer demand.”
“Small businesses need to recognise that for every extra dollar spent on housing, there is less money feeding the productive sectors of the economy.”
“A return on investment of 11.5% for average landholders is triple what many small businesses earn. Wage growth is limited when rising rents have to be paid.”
“The $593.7 billion increase in land values is equivalent to some 90% of the taxes required for all levels of government spending. Taxing income and employment more than land results in an economy dangerously skewed towards land speculation.”
“The saying ‘the harder you work, the luckier you get’ has been replaced by ‘the more property you own, the less work you need to do.’”
“The Federal government should be doing all they can to encourage the states to replace stamp duty with land tax – an important first step towards more realistic land costs. This would put downward pressure on land prices.”
“Australians need to understand that rising land prices do not benefit the Australian economy as a whole” finished Cashmore.