Why Australia’s Housing Crisis Is a Warning for the World [video]

I'm from Croatia and what you're describing only checks out if you live in rural/undesirable area IMO.

This has huge implications on QoL :

- social circles

- schools/kindergarten and socialisation for your children (if you have them of course)

- usually worse pollution than city ironically, unless you're really isolated (a lot of these villages have terrible wood burning chimneys, usually some dirty factories etc., smell from farming/primitive animal styes in the area and zero regard for ecology/enforcement of environmental standards)

- bad infrastructure (common electrical outages, terrible internet), transportation options (highways are decent), hospitals

For example a 100m2 newly built apartment in a middle class area will cost you ~400k€ (can be a bit less but expect significant tradeoffs).

A house of similar quality will probably be 5-600k+.

Realestate inflation changes the equation of living here substantially - it used to be you could remote for 30% less money and live way above the standard you could get in more expensive countries.

Now the lifestyle is not significantly more attainable and everything else is worse than in richer countries.

That's not nothing, especially if you're occasionally needed in-person on the east coast.

I don't think this can be understated. Being a landlord is so normalised here that people seemingly can't connect the dots between every able person collecting 'investment properties' and the impact it has on the housing market (among other things).

Same in London. Furthermore I have the suspicion that this contributes to the low productivity in the UK. Freshly minted MBAs whose business plans are... buy property, collect rent.

    Australia has had one of the highest rates of housing construction in the developed world

    We also have one of the highest numbers of construction workers per capita in the OECD

    Australia also ramped-up housing construction to record levels last decade

    However, this surge in construction was swamped by the unprecedented jump in net overseas migration from 2005, which is projected to run even higher over the next five years

In view of the fact we are world leaders in building housing the other explanations we are given like "land availability" or "state government bureaucracy" or lack of public housing are IMO just furphies. Government subsidies for house builds only make sense if we have spare capacity. But we've already maxed out our building capacity, so the builders pocket the money. As a consequence these federal attempts to subsidise their way of the problem doesn't get more houses built - they just pour fuel on the housing price fire.

Perversely, it's been a factor in bankruptcies in the building sector. With so much demand builders took on more work than they could complete in a reasonable time frame. Yes, it was pure greed, but it was also only possible because demand is so high. And usually locking in sales like that would be harmless and even prudent (apart from pissing off the customer because it took 18 months rather than 7 to deliver the built house). But that work was for a fixed cost and we got hit with COVID inflation so the self inflicted long leads times lead to builders making a loss - and going under.

But it's not just the building sector. When your growing your population at about 2% per annum [0] all sorts of things start going wrong. You can't build hospitals fast enough, and we get ramping [1]. Roads clog faster than you can build them. [2] Public schools can't be built fast enough, and you can't find teachers. [3]

The icing on the cake is it's the State's that cope the blame for all of this because they are the ones responsible for delivering roads, hospital, schools and releasing housing land, and they aren't delivering fast enough. But the root cause isn't them - it's federal population policy. And so far, feds have got with their the "Big Australia" policy scot-free, with none of the blame for the down sides attributed to them.

I'm not against population growth, but it has to be done at a reasonable pace and clearly the current pace is not reasonable.

[0] https://blog.id.com.au/2023/population/population-trends/aus...

[1] https://theconversation.com/ambulance-ramping-is-a-signal-th...

[2] https://www.abc.net.au/news/2019-08-20/queensland-traffic-co...

[3] https://www.9news.com.au/national/teacher-shortage-mental-he...

Vienna has a pretty good housing story.

The interest rates in most of the world are bad for would-be homebuyers across the board, though.

The US has a lot of 'low hanging fruit' in terms of being able to get rid of a lot of onerous zoning that could really make a dent in the housing supply. And we've seen a fair amount of progress in the short time frame that YIMBY groups have been a thing.

The quick way to lower prices would be to annually tax vacancies (if you can't show a CA resident/corp paying rental income on a residential/commercial property) then pay the sales tax income the city would have received from those in an occupied location. This would encourage people to lower rents/prices to fill vacancies. Prop13 has made the property taxable rate so low that many people would rather have an empty rotting hulk than an occupied older property since it would lower their leverage on asset appreciation. A residence tax wouldn't be limited to the Prop13 assessment (5-10% of current value).

If there is ever a bubble pop, prices would likely to stay low for a generation. Just like Japan. It's not that different from bitcoin/NFT (other than some people live in them).

Sydney has topped net internal migration for years now. It's desirable for everyone who doesn't live there, actual locals are getting out at a ridiculously high rate.

1. No more non-human purchase of houses. No companies, corps, trusts, funds etc. should be allowed to buy houses.

2. Ban Airbnb and other short term rentals less than 30 days.

Hoping they do, as it's required. Just haven't heard any mention of them doing so (yet) is all. :/

I live in Vancouver, I'm pretty familiar with Tel-Aviv, and I visited Sydney ;)

Tel-Aviv is expensive because it's the place people want to be. As you say, it's cheaper outside of Tel-Aviv and there's a reason for that. Vancouver is like that as well, there are more amenities, more jobs, a better "life style" so to speak, in Vancouver. And people are willing to pay for that. And part of why it's like that is because of the density and the people that live there. So sure, in theory you could build another city like Vancouver on the Sunshine Coast, or on Vancouver Island, but in practice you can not - it's the results of decades of evolution.

In Israel lessay Hadera or Netanya could be Tel-Aviv... But they're not. And so you pay less to live there.

There's plenty of "land" in Australia but most of it is a) desert you don't want to live in, b) too far from anything. The Sydney metropolitan area is very large. Not unlike Gush Dan or Greater Vancouver. And in that area there isn't "more land" so all the other land, like all the other land in Canada, doesn't matter. Israel being a speck compared to those does actually have a shortage of land since you aren't going to turn the entire country into a city (one would hope).

That said it's true there's been a bubble, mostly related to interest rates. But as they say the market can remain irrational longer than you can remain solvent. Even if prices correct in Israel or in Canada or in Australia the highly desirable areas are likely to still remain relatively, and absolutely, expensive. Things that can change that are reduced demand, economic downturn, those areas becoming less desirable, etc.

People keep talking about lack of affordability, but the reality is there are (a lot of!) people that can afford to live in those places, the 1%. The 99% can't afford but those aren't the ones buying those properties. All these cities have a population that's significantly more affluent than lessay 40 years ago. In Vancouver and Tel-Aviv e.g. a lot of tech workers.

People have been subdivided and densifying older blocks, building two houses on one block.

Working off a criminal sentence for a decade then receiving emancipation and ownership of large land holdings was the original lifestyle of the convicts sent over to AUS. It's in the culture to value land.

One of our five major cities covers the distance of greater london measured north-to-south and has a population of 2.3mil, compared against 13mil for london.

We need to make the Bush/Desert liveable. People don't realize how much work goes into maintaining housing outside the 'butter zone' where everything works.

There's more thought put into terraforming Mars than there is, keeping salt out of the wind in the outback, or making it economical and affordable to keep wildlife out of your housing, or transporting water large distances for cheap. Basically we need rivers in the desert.

The economy is built around sexy projects and consumer bait, but the real expansionist policies that could secure Australian housing and Australian life for centuries to come, are basically an afterthought of silly politicians.

There's not just endless land in Australia but there's also endless room to grow cities upwards. There's nothing technical about our lack of housing, it's 100% a decision.

I am genuinely curious where you moved.

> The thing that strikes me about Australia's property prices are, who will be the generation to pay prices like this again? I personally can't imagine the prices to eventually go anywhere but down.

I imagine the opposite. Price will keep going up and up. It's a ponzi scheme, it's literally "too big to fail". The government cannot allow a fall in prices so it will simply never come.

Regarding who will pay again? No-one, land will concentrate amongst the few who already own land and can use that equity as leverage, while the rest of us will live via rent. I am 80% sure that most people born after 2000 will never own a home.

I've lived in Adelaide my entire life, and it's impossible to find reasonably priced accommodation currently, and I'm saying that as a working class software engineer. You might not feel the pain, but there's an entire corpus of people besides you who do.

Did you even try? Jobs, careers, social networks, familial support networks.