Australia’s Housing Market Isn’t Broken, It’s Working Perfectly… For Some

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While public housing wait lists blow out in some regions to a decade, in just three years elite property developers have increased their wealth by a staggering 56%. The Australian housing market is working precisely how it was intended to, writes Senator Lee Rhiannon, the Greens federal spokesperson for housing.

Housing is rigged in Australia.

This week Tony Abbott has called for Australia’s immigration intake to be cut in order to address housing affordability.

This is a classic tactic in the conservative-right’s handbook. Find a serious social and economic issue then use it in an attempt to block the movement of people who don’t fit the right-wing view of what a good and proper person is.

mew matilda, tony abbott
Former Australian Prime Minister Tony Abbott speaking in Afghanistan. (IMAGE: US Embassy Kabul Afghanistan, Flickr)

It’s a wonder anyone listens to anything Mr Abbott has to say anymore, after his policies and budget were so wholly rejected by the Australian people. Still, I felt compelled to respond and point out that, obviously, it’s not migrants who are causing housing unaffordability, it’s those who are reaping huge profits from housing (backed by the Liberal party to boot).

It is common to hear of the housing system in Australia being ‘broken’, or governments ‘failing’ to fix it. But the current market-driven system is no accident and not a policy failure. For those who profit from housing, the system is working very well.

My office commissioned research from the federal Parliamentary Library into just who it is that is benefiting from our rigged housing system.

Property developers on the BRW Rich List (graph above) have increased their wealth by 56% in just three years.

Stamp duty (residential land related transfer duty below) and budget surpluses have gone through the roof while spending on social housing remained flat-lined.

20,000 people own six or more rental investment properties (2014-15 data). The profit margin of property operators and real estate services has risen to 57.6% in 2015-16. Investors are so pleased with potential capital gains, it’s estimated that about 300,000 properties are being deliberately left vacant.

For most of us, the system is rigged.

Our housing system has been deliberately designed by people like Mr Abbott to prioritise profit over the housing needs of communities. We’ve got houses for profit instead of homes for people. And while the few make their millions and their billions, everyone else has to cope with further housing stress and uncertainty.

The symptoms of our rigged housing system are everywhere. The Council to Homeless Persons recently drew attention to figures that show the number of employed Australians seeking help for homelessness has jumped by almost 30% in three years.

In 2016-17, 288,000 people were assisted by official homelessness services. 261 people were turned away from these services each day, mostly due to lack of capacity.

Senator Lee Rhiannon, pictured in federal parliament shortly before her maiden speech in 2011. (IMAGE: Greens MPs, Glenn Lockitch, Flickr)

Social housing waiting times have exploded. For example, in every district of Sydney, Eastern and Northern, the social housing waiting time for 2+ bedroom properties is more than 10 years. There are about 1.5 million households paying more than 30% of their income on rent or mortgage repayments.

When you put those two lists of figures together – the obscene increase in profit and wealth of those in the real estate industry compared to the drastic increase of people being locked out of safe, secure housing – you get a very stark image of just how the housing system is rigged. And obviously, migrants are not to blame.

The wealthy elite who are making their money from Australia’s for-profit housing system are not going to want to change the system.

Revenue-hungry state governments who are making billions each year from stamp duty are not going to want to change the system.

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Houses in Glebe, Sydney. (IMAGE: andrea castelli, Flickr)

Power-hungry political parties, like one a certain Mr Abbott is a member of, are not going to want to change the system.

But it is becoming increasingly clear to a majority of Australians that we do need to change the rigged housing system.

The Greens plan to remove a significant chunk of housing from the profit-driven marketplace. We’ll do this by building at least 500,000 new public and community homes funded by a new Federal Housing Trust. These homes will be built and run to serve the needs of communities, not banks, property developers or private landlords.

Creating a bigger, more diverse social housing sector will go a long way to reclaiming housing as a human right.

Lee Rhiannon is the Greens' democracy spokesperson and Senator for NSW.

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