Well, well, well – what a fascinating past 48 hours with Donald Trump becoming president – elect of the USA. Very few saw that coming so now Mr President – elect you won the battle with the talk – the talk where now the walk part will be fascinating to watch. Nobody saw nor heard the silent majority army in this election which will have politicians across the planet in a state of panic. One thing you can expect is for politicians to start mimicking Trump speak in publicised debates.
For example, one of the hottest topics in Australia is housing affordability which has been ignored by governments for way too long. Last month KPMG released a report Housing Affordability – What can be done about the Great Australian Dream? Strange that not much was said nor even mentioned because that is the way politicians chose to handle such reports. Well now, isn’t that about to change post Trump.
‘The Executive Summary – Some Solutions’ strikes at the heart of what has been said and ignored by governments for decades now.
“KPMG recognises the challenges associated with resolving the problem of housing affordability are complex and they involve a range of both supply and demand side factors. We have offered a number of solutions that provide a way forward for housing affordability to be improved on a permanent basis. These include:
1. CGT reduction: reducing the capital gains tax discount from 50% to 25%, thereby making property investment marginally less attractive
2. Aggregate property tax: abolish stamp duty on the transfer of residential property and conflate rates, land tax, insurance taxes and emergency service levies into a new Property Services Tax
3. Systemic reforms aimed at maintaining the supply and diversity of land and housing in established and growth areas, through:
a) Set targets: a stronger role for target setting for “net additions to stock” to drive Local and State Government planning schemes;
b) Affordable product: target setting would also focus on encouraging greater diversity of housing stock and deliberately encouraging smaller, well designed affordable products;
c) Streamline planning: making further improvements to the planning system to capitalise on the Government’s planned use of structure plans as a means of reducing the holding costs associated with planning delays – and providing developers in both the private and public sector with greater capacity and incentives to bolster supply at times when the market is under substantial demand pressure;
d) Empower public supply: supporting a stronger role for government land authorities to focus on housing affordability for middle income households within the context of a broader sustainability agenda.
4. Targeted Reforms aimed at improving access to those groups who are the most excluded from affordable home ownership. This package would focus on:
a) More low cost housing: the production of a greater volume of more sustainable, well-designed, lower cost house and land packages;
b) Improve assistance: better targeting of existing State first home owner assistance to increase the overall value and impact of that assistance;
c) Promote shared equity: the introduction of a shared equity program with a percentage of that equity exempt from rental interest charges for the life of the loan or a part of it to be provided by Government and/or the private sector.
• KPMG also believes that the solution for Australia must involve all levels of Government working together, given the factors driving the problems are not under the remit of any one level of government. It should be a priority area of public policy.”
Under the present mismanagement by all three Australian levels of government a generation is being wiped out from the home ownership market whom are now called Generation Rent, and the generations following Generation Rent will be faced with the very same dilemmas.
I have no doubt that the established housing market will be even stronger in 2017. We are now seeing the most competitive rates being offered with 3.64 per cent variable and 3.59 per cent fixed for three years. This explains why home owners are frantically renegotiating rates and locking the new rates in.
Sadly, this does not apply to Generation Rent which is a growing silent majority and a force to be reckoned with come election time. In the case of Donald Trump, we kept hearing that he had no political experience although he has plenty of business experience. Housing affordability can only be corrected by business experience which clearly shows by the KPMG report.
This is further explained by why we are yet to see the political experience housing affordability report – because it simply does not exist. Well that was before this week’s US election which has now globally altered the playing fields – for the better I believe.
MOSMAN – 2088
Number of houses on the market this time last year – 75
Number of houses on the market last week – 59
Number of houses on the market this week – 57
Number of apartments on the market this time last year – 61
Number of apartments on the market last week – 45
Number of apartments on the market this week – 49
CREMORNE – 2090
Number of houses on the market this time last year – 13
Number of houses on the market last week – 7
Number of houses on the market this week – 6
Number of apartments on the market this time last year – 16
Number of apartments on the market last week – 21
Number of apartments on the market this week – 24
NEUTRAL BAY – 2089
Number of houses on the market this time last year – 5
Number of houses on the market last week – 5
Number of houses on the market this week – 7
Number of apartments on the market this time last year – 36
Number of apartments on the market last week – 26
Number of apartments on the market this week – 28