It's pretty easy to work out. The present system has been engineer to benefit those holding assets. Until this paradigm is fundamentally challenged, wealth is only going to accumulate upwards. The middle class thinking that their home price rising by bank created money bubble was wealth building have been lead down the garden path. They have basically consigned their kids back into being mere working class.
Agreed: The burden of saving for a home deposit and near non-existent real wages growth combined in a perfect storm.
Naturally, if housing is becoming prohibitively expensive expect that people will need to shave their consumption to put a roof over their head or pay rent.
But immigrants are not the source of the problem. Remember that when immigration came to a halt during the pandemic house price inflation took off. Now, the people who reaping a 50cents in the dollar tax deduction as they write off the expenses attached to owning more houses, including the marginally increased interest rates, have got the bit between their teeth, and they are going for it. Perth house prices up 22% in the year to May 2024.
The home building industry is stuffed by over-regulation that binds the would be 'owner builder' hand and foot.
Add in the desire of developers to meet the demand for four bedroom homes by NIMBYs, who are chasing capital gain. Result, no four by twos.
Unfortunately, here is what I think is going on. After a relatively brief 60 year period (1920 to 1980) many developed economies are moving back towards a state of affairs that, ever since the formation of city states, has usually been the norm: i.e., low growth and highly unequal wealth and income distribution. While immigration and housing-related policy in Australia of late certainly haven't helped, I fear the forces eroding middle-class economic prospects could be more fundamental and powerful. I wrote and posted an article about this here: https://open.substack.com/pub/kalibali/p/frustration-unmet-aspirations-and?r=48p5dt&utm_campaign=post&utm_medium=web
It's pretty easy to work out. The present system has been engineer to benefit those holding assets. Until this paradigm is fundamentally challenged, wealth is only going to accumulate upwards. The middle class thinking that their home price rising by bank created money bubble was wealth building have been lead down the garden path. They have basically consigned their kids back into being mere working class.
Agreed: The burden of saving for a home deposit and near non-existent real wages growth combined in a perfect storm.
Naturally, if housing is becoming prohibitively expensive expect that people will need to shave their consumption to put a roof over their head or pay rent.
But immigrants are not the source of the problem. Remember that when immigration came to a halt during the pandemic house price inflation took off. Now, the people who reaping a 50cents in the dollar tax deduction as they write off the expenses attached to owning more houses, including the marginally increased interest rates, have got the bit between their teeth, and they are going for it. Perth house prices up 22% in the year to May 2024.
The home building industry is stuffed by over-regulation that binds the would be 'owner builder' hand and foot.
Add in the desire of developers to meet the demand for four bedroom homes by NIMBYs, who are chasing capital gain. Result, no four by twos.
Unfortunately, here is what I think is going on. After a relatively brief 60 year period (1920 to 1980) many developed economies are moving back towards a state of affairs that, ever since the formation of city states, has usually been the norm: i.e., low growth and highly unequal wealth and income distribution. While immigration and housing-related policy in Australia of late certainly haven't helped, I fear the forces eroding middle-class economic prospects could be more fundamental and powerful. I wrote and posted an article about this here: https://open.substack.com/pub/kalibali/p/frustration-unmet-aspirations-and?r=48p5dt&utm_campaign=post&utm_medium=web