Media Release
A Housing Affordability nightmare – Australia’s land prices are out of control
Today’s national accounts revealed record land price inflation – triple the highest ever previously recorded. The cost of land in Australia has gone up by $1.72 trillion, 97.1% of which is in residential land.
“We’re astonished that the $1.67 trillion increase in residential land prices is $1 trillion beyond our most optimistic forecast”, says Karl Fitzgerald, Advocacy Director at Prosper Australia.
“The Federal Government must address the runaway problem of land prices. Australia’s housing debate is dominated by misleading calls for added supply to address affordability pressures. The past year has shown this is nonsense – we have had negative migration levels and yet a record increase in land prices. The incessant call for more land supply has been snookered by today’s data. This is a clarion call for a land policy that captures this sky-rocketing value to invest back into our communities”.
National land values have pushed beyond $7.8 trillion, making it by far Australia’s largest asset class. It dwarfs the entire ASX, measuring the wealthiest companies in the nation, which enjoys a $1.8 trillion valuation.
Karl Fitzgerald adds: “The need for urgent reform of our tax system is apparent. The Federal government must repeal the capital gains discount and negative gearing concessions for property investors. Land taxes should be broadened in order to replace both payroll taxes and stamp duties”
NOTES:
- The pandemic induced hit to net migration of -95,300 was equivalent to an extra 36,653 homes.
- NSW and Victoria accounted for 69.3% of the national land price increase.
- Total national land prices have increased by 86.1% since 1999, when the Capital Gains Tax was halved.
Something that is not being talked about openly is that in the inner suburbs, prices are being artificially inflated out of local people’s reach in part by investors, land bankers and developers who do not need to negatively gear because they are bringing in the money from overseas, either to buy for themselves, or in Syndicates. Multiple properties are being purchased and held.
This lack of the financial need to borrow and also to rent out the property and the FIRB rules which prevent this for some, are leading to many of the empty houses you have previously written about.
There are huge numbers of very high value empty houses all around these suburbs which should be on the rental market but are not.
People are taking part in activities to hide this by leaving shoes on the doorstep and having others drive around once a week and put out their bins and then collect them etc.
Even electronic devices being used to remotely open and close blinds.
Obviously no empty house state taxes being paid there and house prices are being pushed up. The state is losing millions in unpaid taxes. Young people cannot buy.
In older suburbs, often some of these places are also new builds which have replaced heritage homes that have been demolished for no community benefit much to the dismay of local people. Heritage houses are also being left empty to degrade.
Another key sign of an empty house is often over grown gardens and front nature strips.
Are you interested in following up on any of these issues? Are you aware of them?
Great to hear from you Christina. Sounds like we have been living in parallel worlds! We are certainly well aware of vacancy and its impact on pricing and have been campaigning on this very issue since 2007 (even back to the early 1900s post the 1890s depression when there were so many vacant homes we barely built a house for 20 years). Please have a read of our most recent Speculative Vacancies report. There’s another 9 reports here with multimedia. You may also like this article on the money laundering inquiry we tweeted out last night. Good to be in touch and please feel free say hello, we need more people like you ;)