15 May 2005

Hargreaves appeals to Landlord's sense of decency

| johnboy
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ABC Online have an amazing outburst from Housing Minister John Hargreaves asking ACT Landlord’s to examine their social consciences and reduce rentals.

Minister, it is a market, the market pays what the market will bear. As a rent payer I would like to pay less. But most landlord’s in Canberra have a limited number of properties, which are geared up to the hilt, and reflecting a real-estate market your government has driven up with it’s land release policies. If they had to compete they could probably find a way to reduce prices. But very few of them will choose further degrade their not-extravagant lifestyles just so you can sleep better at night.

If you care about this then stop whimpering platitudes, and start increasing supply in the damn housing market.

And for the love of god don’t try and further regulate the market because that will reduce supply.

For those who disdain economics please trust me on this. When you reduce supply you raise prices as surely as night follows day.

And if the rents get too high due to your lunatic policies at least the border beckons. Landowners aren’t the only ones who have to compete Minister, so do you. So do we all.

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i think that when a lot of the slab and tilt apartments come on to the market this year, rents will adjust accordingly. in fact there may be a real market decline.

the act market is skewed by high transient numbers with high incomes.

There must be a unique rental market in the ACT. A quick glance at the December 2004 (couldn’t obtain a more recent copy) and the analysis of the rental market goes like this:

Canberra recorded the highest vacancy rate of 5.2% compared with all capital cities in December 2004. This is up by 0.6% from September 2004. Despite this, house rents increased over the quarter and rents for other dwelling remained unchanged. The high vacancy rate was affected by a large number of new other dwellings developments coming onto the market for the first time.

Therefore, vacancy rate goes up but rents do not shift to adjust to the ‘supply and demand’ theory…

as much as i am all in favour of market forces, i dont believe that it can apply totally in teh case of housing in teh act. it needs to be balanced with a lot of other facors. as a small city state we have limited space, and left to the rapacious developers it would all be built on. there are also environmental concerns which means that copper winged dancing toad habitats need protection, which under rapacious developers would not occur.

the developers delivered teh planning debacle which is gungahlin. i would not let them at it again. a strong independent planning authority, which is not actpla in its present form, needs to be created. it needs to be free of political meddling such as earring boys forays.

will this happen ? i doubt it.

public housing is less developed in oz than in europe for a variety of reasons. one of the main ones is that the govt passes this cost onto you and me by letting us buy second homes and renting them out. tax concessions encourage this practice. recall if you are old enough the debacle that occurred when keating decided to do away with negative gearing.

It would appear that government does not understand the fundamental difference between how a private property market works as opposed to a taxpayer funded one.

Canberra has not struck a balance in how housing is offered – it’s obvious the pot is calling the kettle black here. The government should be very concerned with how it delivers a public housing service and thus, should be offering this service to those who need it most.

Leave the open market to adjust to supply and demand!

Canberra_unsung_hero7:56 am 15 May 05

Thanks for the tip off Ari…I ain’t paying those robbing mob of Gits in London Circuit any Land Tax……they already get their pound of flesh out of me in Rates, parking fees, etc !

Don’t even think of renting your house, Mr Unsung, you’ll be liable for an enormous whack of land tax, quite apart from all the other costs.

I bought a house in the inner north in October last year and didn’t move in for a couple of months as it still had tennants to serve out the remainder of their lease.

The land tax assessment alone was well over $4000/year and the rent was just $350/week for a three-bedroom cottage. Given all the other costs of ownership there’s no way the previous owner was making any money apart from a very substantial capital gain.

Result? He sold it to cash in the capital increase.

My wife and I got our first home, one more property left the rental market and a heap of uni students had to find somewhere else to rent.

Luckily, the preiod of tenancy fell between the land tax assesment dates so I didn’t have to pay, but it scared the bejeezus out of me to think renting it out isn’t a viable option in case our circumstances change.

Canberra_unsung_hero6:57 pm 14 May 05

$1390 a month ! …… I should consider renting out my 3 bedroom house immediately !

Yep I agree entirely. I pay 1390 a month for my place in Kingston. And I’m not even there half the bloody time. I get back in Canberra in late May and I’ve actually decided enough is enough. Ill end the lease early and get out. I’ll crash with a mate for a while then move elsewhere. For the price I’m paying in Canberra I could get a nice apartment in Melbourne or over looking the beach on the Gold Coast. Hell, even the prices in Sydney look pretty favorable. My job enables me to live anywhere so it’s no problem for me to move. It’s only been apathy stopping me really.

I call on Minister Hargreaves to donate some of his salary to rental assistance for p-eople in need.
The new tax cuts may mean people are less interested in negative gearing properties too. Especially now properties are SO expensive. The government might have to increase their housing stocks…

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