Why families can't afford a home (letter)by Marc FlorioNews Weekly
, June 9, 2007
In Colin Teese's analysis of housing prices (News Weekly
, May 26, 2007), he leaves out an important player that contributes to rising prices and housing unaffordability: the investor.
Any real estate agent will confirm that, over the past 30 years, the percentage of investors at auctions has increased substantially. It is now common for baby-boomer investors to own multiple residential properties, limiting the supply of housing available to owner-occupiers.
At auctions, I have many times witnessed an investor compete against a family for the same property. Invariably, the investor wins at the expense of a family wanting to own its own home. Families, especially single-income families, cannot compete with investors.
In the debate about housing affordability, I find it astonishing that little is said about the impact of negative gearing - that is, the offering of annual tax advantages for property investors over that of home-owners.
And we call this a "free market"? There is no greater example of the state subsidising the wealthy.
If the number of investors in the housing market were reduced, we would see a decline in housing prices and a rise in housing affordability.
But of course, there is no political will for this, as the interests of the wealthy are of more importance than the interests of struggling families trying to buy into the housing market - an Australian dream that has become a nightmare for many young families.Marc Florio,
Keilor East, Vic.