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John Hargreaves talks to himself on housing affordability

By johnboy - 28 February 2006 35

ABC Online has a humourous piece in which Minister for Housing, John Hargraeves, asks some truly stupid questions on the subject of housing affordability.

“I would challenge the private rental market to think about the profits that they’re taking out of the private rental market,” he said.

“I’d be challenging developers to say whether or not they really need to make so much profit out of development

They key word here is market. Which means supply and demand. Want to lower prices? Increase supply. Want to raise prices? Reduce supply.

Well-intentioned but dimwitted legislation being a tried and tested way to reduce supply.

What’s Your opinion?


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35 Responses to
John Hargreaves talks to himself on housing affordability
areaman 11:24 pm 28 Feb 06

will be paying more intot he mortgatge than they are getting from the rent coming in

um… that’s the whole point, otherwise we’d all be buying rather than renting.

seepi 6:02 pm 28 Feb 06

I think Hargreaves should challenge himself to see whether he needs to profit from his fat pay packet. Perhaps he could offer up his govt car as a refuge for a homeless person? Not all landlords are cashed up profiteers like he seems to think. Anyone who boughttheir investment house in the last few years will be paying more intot he mortgatge than they are getting from the rent coming in.

Indi 3:35 pm 28 Feb 06

I’ve said it before in another thread, but “I wonder if the newly annointed Human Rights Commisar will deal with Housing as a Human Right for those who cannot access public housing due to the selfishness of those who have the means to move into the open market?”

Of course the human rights act can’t be applied for housing as the govt would be faced with a quandry of who has ‘more’ rights to a public house.

johnboy 3:03 pm 28 Feb 06

Hmmm…

Safe, secure, appropriate and affordable housing is an essential human right,without which a number of other rights cannot be effectively exercised.

A lot of devil in the detail of that “Appropriate” there.

And that’s just the opening sentence.

Thanks for the link though.

I don’t think the market has failed, i think it’s responding rationally to the stimulus’ it’s been given.

It needs different stimulus.

Roland GRNS 2:45 pm 28 Feb 06

here’s a link to a document from ACTCOSS and ACT Shelter called
THE WEALTH OF HOME – A Call for Action on Affordable Housing in the ACT

http://www.actcoss.org.au/publications/The%20Wealth%20of%20Home.pdf

It talksa bout market failure among other things, and what kind of interevtnions across the world seem to be successful.

annie 1:50 pm 28 Feb 06

The private rental market isn’t the problem. It’s the government.

To my way of thinking, there are properties priced at various points on the scale, from dirt cheap to ultra expensive.

And renting sucks sometimes, because you don’t control the property. You can’t decorate to your own taste and maintain it the way you want. You might get a landlord that won’t fix your hot water service for a couple of days because they can’t be stuffed paying the extra callout fee, even though said utility is classified as an essential service under the lease and must be fixed immediately.

Public housing isn’t much better as an alternative because in New South Wales at least, they look at your GROSS income and assume it’s all disposable when assessing eligibility. You can’t qualify if you earn more than $580 for 3 people.

On top of that you have to pay water rates etc. to the Housing Commission, which doesn’t usually happen in the wider private market. Also you have to wait ages and ages for a place to become available because there aren’t many properties on the Houso register.

So the rental market has a lot more problems than just simply landlords and developers with a profit motive.

The government has encouraged this with their pennypinching, failure to supply enough land and their negative gearing policies, both of which have contributed to higher prices if you want to buy.

I hardly think it’s fair to point the finger at developers and say they’re very bad for doing exactly what you encouraged them to do in the first place.

Here endeth the sermon.

Maelinar 12:51 pm 28 Feb 06

ROTFL Kimba.

Perhaps the government should look at building an affordable housing department in the same vein as banks, telecom, etc if this is such an issue.

Then they can go into direct competition with the free market and drag prices back down like a huge anchor…

But can you see a Liberal government proposing that ?

They’d rather people who drop off the bottom end of the income line to live in multi-storey coffin apartments. (until they can get back on their feet – yeah right)

kimba 12:40 pm 28 Feb 06

Yes, I agree the market should be government controlled. Yep we should ban free enterprise and no one should dare make a profit.

We shouldn’t stop there, we can also rename Australia – The People’s Democratic Socialist Republic of Australia.

Spectra 12:35 pm 28 Feb 06

Maelinar – I figured there probably was an example – I was exaggerating for effect 🙂
Fact is, though, while there are no doubt examples such as the one you gave, expecting an entire market to take that approach over a prolonged period is really grasping at straws for a solution.

Thumper 11:53 am 28 Feb 06

Areaman,

After lunch all bets are off…

Hahaha…

areaman 11:31 am 28 Feb 06

I’m sure areaman can supply the statistics that the private rental market according to the world of foskey and other life-dodgers is indeed quite affordable and therefore John Hargreaves is spruking shit.

Nup, I agree housing, both rental and purchase, is amazingly expensive in Canberra. Of course scrapping the security of tenure policy on public housing wouldn’t chaneg this one iota, which has always been my point.

As to how we deal with houseing affordability, from memory the housing affordability talk force had some good ideas, only one of which was increasing supply. I am also pretty sure that “asking landlords nicely to make less money” didn’t make the final report. If Hargraeves was talking to himself maybe it was after lunch, in which case all bets are off.

Maelinar 11:04 am 28 Feb 06

Spectra, a loose analogy however I recall IKEA ran a day where all profits would go to their staff since they had already exceeded their profit forecasting for that year.

I had to rack my brain for that example though.

johnboy 10:43 am 28 Feb 06

I’m all for making housing cheaper,i just don’t think asking landlords and developers to examine their consciences is going to achieve very much.

releasing more land for development would make housing cheaper,

putting Housing ACT onto the open market and using rent assistance to achieve social welfare goals would make housing vastly cheaper.

increased regulation of landlords and developers will make housing more expensive.

Spectra 10:43 am 28 Feb 06

The guy needs to ask himself: Has any profit-driven entity ever, in the history of the universe, said to itself “You know what? I don’t need to make this much profit – I could stand to have less money”. The answer, of course, being “Of course not! Are you insane? What are you smoking?”. So it’s not exactly a sound policy to ask nicely for this to occur, in the hope that it will solve the problems.

Maelinar 10:38 am 28 Feb 06

I’m sure areaman can supply the statistics that the private rental market according to the world of foskey and other life-dodgers is indeed quite affordable and therefore John Hargreaves is spruking shit.

Since he’s been quick to impart these gifts of knowledge over our previous conversations at least.

I think I’ll sit on the Hargreaves side of the fence on this one, housing affordability is at an all time shocking rate regardless of any statistics you can put in front of me, the information I am citing is the rental guide and the prices therein – an active document.

However, as JB said, the market will charge what they will because they can, not for some higher obligation to provide cheap accomodation to strangers.

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