Housing Affordability

Property has two elements: land and buildings. Price changes like those of the last decade accrue to the land, and fall into the pockets of anyone selling to anxious buyers. Opportunity is denied, families are delayed, banks and developers enriched in times of high land prices. These eras always end badly, with debt-depression, unemployment and sad regrets.

Fast facts:

  • Why call it a housing bubble? The land is what goes up in value – houses depreciate.
  • The land value is determined by that golden real estate strategy of location, location, location. Why does economics ignore locational value?
  • Taxes have switched away from assets and onto incomes over the last 30 years, encouraging speculators to make easy money ‘in their sleep’.
  • Investors were 12% of the market in the mid 80’s, today they average 36%

This graph defines the problem:

Investors_crowding_out_FHO's

More reading:

20 Advantages for Investors

Necessary Vic Government housing policy improvements

90,000 vacant homes in Melbourne

Prosper’s Campaigns

Englobo – code for land speculation

Housing Affordability tags

https://prosper.org.au/primers/housing-affordability/