I’m visiting my son in Melbourne and they are looking to buy a house.
They are looking to spend up to $750000 but the houses they are looking at are war service homes exactly the same as the one I grew up in 60 years ago except that they have had little spent on them in the meantime and many of the houses they are looking at are structurally at the point of being good only for the bulldozer. They are in their peak earning years with professional jobs and yet they face a huge struggle to get a home. Melbourne like most of our cities has immigrants deluging in.
This is the crazy world we live in and there are four big drivers to take note of.
1. A huge pool of superannuation funds floating around looking for something profitable to ‘invest’ in. Property is getting bought up by these funds with the effect that it drives prices through the roof well outside the price range of our children.
At the same time rents get driven through the roof.
So do rates (linked to an ‘imaginary’ $ value) so that old people who have lived in the one suburb all their lives are driven out (into the streets in some cases) because they can’t even afford to pay the rates on an old place.
2. Very similar is what happens with a huge profit pool from a big successful industry like mining. It is absolutely the case that these profits are not evenly distributed across the Australian community. While a big proportion go straight out of Australia what stays in Australia goes differentially to a wealthy elite who then start looking to ‘invest’ it profitably.
Once again our modest homes become a target and drive prices out of reach.
3. Our bizarre lack of boundaries when it comes to letting anyone and everyone in the world buy up Australia our homes and farms. In the olden days our men went to war to protect our nation. Now it is sold out from under us. Whole sections of Brisbane are being bought up by Chinese for example. China and Saudi Arabia are buying up African farms but they are also buying up Australian farms and food businesses.
This stuff is not funny. It is profoundly unresilient. We aren’t making more land for homes or farms. We need places for our children to live not for them to become homeless and impoverished in their birthplaces.
4. Huge numbers of people pouring into Australia. “Boat people” are a diversion. They represent the tiny tip of the iceberg. The biggest numbers are people on temporary visas – students and temporary workers. They are not even counted.