We address the issues related to land valuations and investment properties and the impact they have on the housing crisis in Australia.
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Will your MP support changes that will help to restore housing affordability?
Everyone is talking about the current housing crisis in Australia. Property availability is very low, prices are at an all time high and interest rates are relatively high.
There are many reasons for this.
- High demand due to:
- Low development approvals by Local Government
- High immigration, partly to provide labour to meet the need for more housing
- Lower construction through the COVID pandemic
- High financial stress due to:
- High inflation due to supply problems following COVID shutdowns
- High borrowing costs due to high interest rates set by the RBA to combated high inflation
- High property prices
The Land Market & Land Valuations
In a normal market such issues would be temporary and prices would return to a fair value. In the land market supply seldom matches demand so there is continual upward pressure on land prices. Annual State Government land valuations lock in exorbitant prices which then form the basis for land investment decisions.
There is a growing awareness that property prices have risen to a level that makes it almost impossible for first home buyers. Grandparents worry about how their grandchildren will get a deposit for a property, families work multiple jobs to get enough to pay the mortgage and food banks report record numbers of people looking for help.
“Secure and affordable housing is fundamental to the wellbeing of Australians. Home ownership continues to be a widely held aspiration in Australia, as it affords owners with security of housing tenure and both long–term social and economic benefits.”
Systemic Factors Affecting Land Prices
This blog is about identifying systemic factors that have been, and still are creating upward pressure on land prices, factors that are caused by State and Federal Governments treating land as an investment.
- State Government land valuations
- Federal Government Tax incentives for investment properties
The pricing and valuation of land in Australia needs fundamental reform to maintain the social and economic health of our country.
- Stop negative gearing
- Limit 50% capital gains tax discount to property sold to first home buyers
- Freeze State Government land valuations until major reform can be implemented
- Government land policies need to acknowledge and support secure and affordable housing as fundamental to the wellbeing of Australians
- Peg land valuation increases to CPI increases
- Value new lots by the actual cost of producing and marketing the lot, in consideration of neighbouring valuations.
About
As someone who is concerned about the impact of land valuations on the Australian economy, Keith draws on his experience to highlight the issues that need to be discussed and addressed.
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