Quote:
Originally Posted by Lever T
I haven't read all before, but in my opinion the real estate agents have a fair old responsibility in all this - I reckon they are the new 'used car salespeople' - ripping every one off for their own end, driving prices higher and higher, no-one has really put them under the microscope - they buy into new estates, take a lot of the land just to drive up prices
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I've never heard so much BS in a long time! but I'm going to give you the benefit of the doubt and assume you have confused 'Real estate agents' with 'Developers' ...they are 2 very separate people......less than 2% of properties that are sold would actually be owned by the agent selling it. (i've been working in the property industry for over 30 years, so I know a bit about the topic).
The buyer and seller sets the price.......if there's no willing buyer, the property won't sell regardless of what the vendor (or THEIR agent) wants.
Housing affordability is a combination of factors:
1. Supply and Demand...prices are higher where people want to live (currently Sydney & Melbourne). This also varies between types of properties and the popularity of Suburbs. Apartments are more affordable than houses because they are currently making more of them and they are not in short supply.
2. Available Credit.....it's been relatively easy and reasonably cheap to borrow money. If that changes, so will house prices.
3. Overseas Investment......we are seen as a solid and stable place to invest, so money has flowed in and pushed up price. But this also connects back into supply. If the supply of homes was greater than the demand, prices would fall.
It's the big cities that have the supply problem and therefore the high house prices, it's not as bad in the regionals. The government needs to create more housing stock in the city by re-zoning OR encourage people to move to the regionals. Commuting around the city is becoming difficult already, so regional cities would be a better solution but jobs will need to be created. Private business will only move there if Government departments move there first (creating populations to do business with).
Unfortunately first home buyers need to realise that the may need to start with something in the less desirable suburbs/areas and work their way up (and that's always been the case even 30 years ago).
Without negative gearing, there would be a real shortage of private rental accommodation, it would be a disaster.
Capital Gains Tax came in in 1987 and was originally discounted for inflation but became difficult to calculate so they made it apply to 50% of the gain which is a much clearer formula.
Developers are not the bad guys either, they have to risk large sums of money and navigate plenty of Government red-tape to create blocks of land.
When the market collapsed in the early '90's the majority of them went broke, and some never recovered. If development land was more plentiful (cheaper) there'd be more blocks for sale, more houses built, therefore less competition for each house, therefore more reasonable prices.
Simple economics.....the price of anything rises when demand out-strips supply.