“That the people who suffer most from this heartless monopoly release of land are from the working class or households with annual gross incomes of under around $110,000 shames the ACT Labor Party,” writes columnist JON STANHOPE.
IS it just me or have you, too, over the last few months (or even years) heard – or at least imagined hearing – a heartbreaking wail outside as you sat down to breakfast.
It may be that that experience was as you opened the daily paper or a news website or turned on the radio.
I fancy I hear this mournful wail every time the media reports, with what always seems to me to be misplaced pride, that the housing market in Canberra remains the “strongest” or most “robust” or “resilient” in the whole of Australia.
Good old Canberra, a real estate agent’s paradise, the strongest housing market in Australia. Punching above our weight again.
Having the “strongest” housing market in Australia means simply, of course, that houses in Canberra are increasing in value at a faster and higher rate than incomes and inflation and higher than anywhere in Australia.
It’s not surprising then that for those in Canberra not lucky enough to own their own homes that rents are increasing commensurately and also at the fastest and highest rate in Australia.
As I mentioned, the news about the “strength” of the housing market is usually presented in a celebratory fashion.
And indeed, those of us who are comfortably middle class and proud owners of a detached house on a nice block with a garden and back yard have much to cheer about and celebrate.
Without lifting a finger, the value of our house and net financial worth is increasing at a stunning, if not obscene, rate. Even a median-priced house has in recent years been increasing in value by between $40,000 to $50,000 a year. Fantastic isn’t it?
Fantastic for some of us, yes, but sobering and sad if one stops to think about where the money that our houses are making for us comes from and who it is, at the end of the day, that’s paying the price for our good fortune.
It is, of course, young families, first-home buyers and people from the working class and lower-income households who are desperately seeking to break into the housing market and who pay the price both in terms of being fated either to never own a house in Canberra or forced, because of the lack of affordable housing stock, to pay a price that they can’t really afford.
And so every time I read or hear news reports about the “strength” of the Canberra housing market it’s not cheering that rings in my ears but the sound of a young Canberra mother crying. I even have a face to put to that young mother.
In the recent past I attended the auction of a house. I accompanied my daughter and her husband and their children who planned to bid for the house. There were six other registered bidders – all young couples with children. The agent had advised in pre-auction inspections that his best estimate was that the house would sell for between $590,000 and $640,000.
There was an air of understandable anxiety and tension as the bidding began. All the young couples were no doubt praying that this time they might be lucky; they might finally have a home of their own and fulfil a precious dream.
However, in a sign of the “strength” of the housing market the bidding opened at $660,000 and one of the young mothers gave out a wail that haunts me still and burst into uncontrollable tears, gathered up her distraught children and left.
As an aside, the property, a 50-year-old, renovated, three-bedroom house in an outer suburb, sold for $700,000. My daughter was not the purchaser.
That scene, which plays regularly in my mind, is one of the reasons I’m so unremittingly critical of the land-supply and planning policies of the current Labor and Greens’ members of the ACT government.
The harsh reality is that the decision taken by Labor and the Greens to deliberately restrain the supply of land for detached houses has created a level of pent-up demand that simply cannot be met by the current strategy. The market has failed.
The consequence is that young families and people in the bottom two to two and a half quintiles (i.e up to half of all Canberrans, who are currently not in the housing market) will never, for so long as the government asserts its monopoly control over the release of land, be able to afford to buy a house in Canberra.
That the people who suffer most from this heartless monopolist ideology are from the working class or households with annual gross incomes of under around $110,000 shames the ACT Labor Party.
My colleague Dr Khalid Ahmed and I have written extensively about these issues for the Policy Space blog of the University of Canberra. The evidence to support the claims I make above is incontrovertible and is detailed in the posted articles.