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Housing Crisis: Who's to blame?
High interest rates and property taxes drive investors out, worsening the housing crisis. Government's' fiscal policies and taxes contribute to high rents and prices, affecting affordability and investment.
High interest rates, high property taxes and high property prices all lead to one outcome: Property investors are keen to quit the market while they are ahead. It's easy to blame landlords and property investors alike, and say they are the reason why people are struggling more than ever to own their first home. When really, it is the intervention of governments - both state and federal, which has exacerbated the initial problem - a housing shortage.
Government debt and inflationary spending keep interest rates high, driving investors to alternatives and worsening the housing crisis
Taxes inflate costs
State governments are mostly responsible for the ridiculous increases in property taxes. The ATO collected $68bn in property taxes last year - and that's excluding capital gains! Also, the Victorian government introduced new taxes last year which have led to Melbourne being one of the weakest property markets in Australia.
The federal government is also responsible, after handing down a budget which puts them in the red for the foreseeable future - in a time where the government is nearly 1 trillion dollars in debt! This encourages the RBA to continue keeping rates as high as they are, because government spending is inflationary, and the Labor government has shown it favours short-term politics over good judgement.
Investors stabilize housing
The exodus of property investors to alternative opportunities - such as cash and equities - is NOT to the benefit of our society and its housing crisis. Property investors provide more than 80% of the homes occupied by renters in Australia. But for many, including our very own Prime Minister, owning a rental property has become burdened with costs which outweigh the potential benefit.
I'm not suggesting that property investors need a hand, not for one minute. I'm suggesting that governments should, at the very least, not interfere with the opportunity that investors provide for renters - because by extension, the unintended consequences are higher rent and higher property prices. Neither of which are helpful when Australians are under cost-of-living pressures they are today and trying desperately to break into the property market themselves.
Pictures from Habitat for Humanity Victoria website.
Source: http://gippsland.com/
Published by: news@gippsland.com
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