9 ms·
It will make very little difference in the end. Australia's land tax system makes it effectively impossible for large corporations to own large chunks of resid
by rgmerk 9mo ago
It will make very little difference in the end.
Australia's land tax system makes it effectively impossible for large corporations to own large chunks of residential property, but our real estate is amongst the world's most expensive and landlords are still awful - it's just that the landlords are hundreds of thousands of dentists and, yes, software engineers rather than corporate entities.
If you want housing to be cheaper and renters to be better treated, increase supply. Everything else is window-dressing.
- lewdev 9mo ago> It will make very little difference in the end. I feel like there will be a difference between a handful of large corporations owning a majority of properties vs thousands of dentists and software engineers. Are you saying that all of these property owners are also soulless profit-optimizers? I remember watching some video of tenants being priced out of their rental apartments so when they tried to contact the property owner, they found layers upon layers of managers and companies. It just seems better when there are more thousands of owners than just a handful of corporations.
- rgmerk 9mo agoYou would feel that, but you would be wrong. Small businesses are often just as ruthless as large ones, just less competent. In any case, most rental properties are managed through agencies, who are soulless profit-optimisers.
- DoesntMatter22 9mo agoSo what’s your solution exactly? No businesses at all?
- weakfish 9mo agoThat’s… not what they said, you’re putting words in their mouth
- rgmerk 9mo agoSee my OP. In short, the appalling treatment of renters in Australia is due to the chronic undersupply of housing; if landlords had to compete for tenants it would not be possible to mistreat them in the way many currently do. There is also scope for better regulation of tenancies and indeed the Victorian government has passed some reforms in this area.
- seanmcdirmid 9mo ago> I feel like there will be a difference between a handful of large corporations owning a majority of properties vs thousands of dentists and software engineers. Are you saying that all of these property owners are also soulless profit-optimizers? Do we want to trade crazy high prices in the American real estate market for absolutely crazier high prices in the Australian real estate market? That is a bit simplistic though, there could be other things going on in Australia, and all the other rich countries (e.g. Switzerland, England, China) where American prices look like a good value. I'm sure at the end of the day supply is the main factor, and not having a hot economy also helps, so I'm sure the USA will get there fairly quickly.
- ghaff 9mo agoAnd, everywhere, it's about people wanting to live in some specific cities. Even a bit outside of those specific locations isn't necessarily particularly expensive. (Leaving aside ski resorts, especially nice college towns, and the like).
- seanmcdirmid 9mo agoI don't know...some countries are just expensive full stop. Lausanne for example, and since public transportation is good enough, you can live outside of the city and still get to work...so those places just get expensive also. Australia I assume you mean the few places where people actually live in the country vs. the undeveloped outback?
- rgmerk 9mo agoAustralia is so big that there's still plenty of land available where you could build new cities (and not just in the desert). It's just that everyone[1], given a choice, would like to live near the beach in Sydney's eastern suburbs[2], and there is most definitely no more land available in those suburbs. So the only alternative is to build up, and the boomers sitting in their multi-million dollar houses that were originally bought for $3.95 don't like that prospect one bit. [1] Not everyone, but you get the point. [2] and Melbourne's inner east, and the desirable parts of Brisbane and Perth.
- SecondHandTofu 9mo agoIt's the opposite in the UK. Most landlords are individuals, own one or maybe a couple of properties. It's awful, rogue landlords who do everything they can to not do repairs or improvements and when they do it often comes after a long time. Often as they have underestimated all the expenses they're liable for and find that the profit is not very much. Give me a company that owns a whole block every day, they've modelled the risk better, have economies of scale, and you have more recourse against them.
- mmooss 9mo agoIME companies are worse: professional investors highly focused on maximizing profits - driving up rent and minimizing costs - rather than a long-term investment by someone with another job, a sidelight and retirement plan. I don't see how you have more recourse against a company with lawyers that can ignore you, and mom-and-pop. The latter are much more likely to respond to reason. Of course, any landlord can be bad.
- bell-cot 9mo ago> increase supply. THIS. If Supply & Demand just feels too complex, then spend a day watching kids play musical chairs.
- cloverich 9mo agoIt will make a _small_ difference, and then also banning individuals from owning multiple homes would be a bigger difference (and then building enough supply, the biggest). We can do all three.
- Someone1234 9mo agoThe problem with "increase supply" is that existing property owners rarely want that. In almost all cities land has run out, so the only way to actually increase supply is to increase density. That means fewer single-family-homes, and more townhomes, multi-family, condos, and apartments. The "American Dream" is a single-family-home, surrounded by other single-family homes, but even with urban sprawl we simply run into the limits of a commute and prices skyrocket. Ironically we actually solved this problem: Indefinite Telecommuting. But then decided to take our solution that reduces property prices, reduces air pollution, and improves quality of life and then just threw it away because commercial property owners were losing money.
- TulliusCicero 9mo agoI think it's possible to make apartment/condo living more attractive in the US, but you'd need a few changes. For example: * American apartment complexes are typically ugly as hell. They're little building islands in a sea of asphalt, disconnected from the wider street grid too. They'd be more attractive if they were more like the complexes I saw while living in Munich: more green up front, car parking basically all underground. * Require substantial backyards/courtyards for said complexes. * More tenant protections that prevent landlords from arbitrarily non-renewing a lease, so that people in apartments can have long-term stability. If you break the rules repeatedly or severely, then sure, landlords should be able to remove you, but otherwise you should be left alone to live your life. While in Munich, we lived in the Solln neighborhood. It's mostly apartments of some kind (we lived in an apartment, and then a backyard duplex), but they just look a lot less ugly than they typically do in the US. Example area: https://www.google.com/maps/place/Munich,+Germany/@48.0810982,11.5147612,3a,75y,33.61h,87.24t/data=!3m7!1e1!3m5!1sEYx6YYv7lZuGugHdoA53qw!2e0!6shttps:%2F%2Fstreetviewpixels-pa.googleapis.com%2Fv1%2Fthumbnail%3Fcb_client%3Dmaps_sv.tactile%26w%3D900%26h%3D600%26pitch%3D2.7583242022445233%26panoid%3DEYx6YYv7lZuGugHdoA53qw%26yaw%3D33.605882165687746!7i16384!8i8192!4m6!3m5!1s0x479e75f9a38c5fd9:0x10cb84a7db1987d!8m2!3d48.1351253!4d11.5819805!16s%2Fm%2F02h6_6p!5m1!1e2?entry=ttu&g_ep=EgoyMDI2MDEwNC4wIKXMDSoASAFQAw%3D%3D https://www.google.com/maps/place/Munich,+Germany/@48.081098...
- psunavy03 9mo agoNo, we threw it away because executives wanted their control fantasy of being able to push people around like little chess pieces, as opposed to setting a vision, hiring professionals, and then giving them the tools to achieve the vision and staying the hell out of their way.
- austhrow743 9mo ago>It will make very little difference in the end. It will make very little difference if Wall Street investors hold very little property. Putting a finger on the scale of how much real estate is individually owned definitely makes a difference though. It makes it worse. 100,000 individuals who own 100,000 properties have far more political power than 10 companies who own 100,000 properties. >If you want housing to be cheaper and renters to be better treated, increase supply. Everything else is window-dressing. Yes. However supply is artificially restricted by government, to the approval of the average property owning voter. So more specifically, that is what needs to be changed. Everything else is window-dressing. This is a country sliding further towards being us, with their housing being more restricted and more expensive.
- ZeWaka 9mo ago> 100,000 individuals who own 100,000 properties have far more political power than 10 companies who own 100,000 properties. Is that really true in the US?
- austhrow743 9mo agoConsider every other expense that people have that's supplied by companies (see: literally everything). Why have those companies not successfully lobbied to prevent competition? Industries where it happens are the exception, not the rule.
- mpyne 9mo ago100,000 votes (and really probably closer to 150,000 influenceable votes across those households) is a significant number compared to 10 companies who own an average of 10,000 properties each, yes.
- _silicon 9mo agoCompanies with tremendous wealth manipulate voters and lobby their representatives. Don’t presume that voters are remotely well-informed of who backs their interests.
- gregw134 9mo agoIt's a good start. Would be nice to add a gradually increasing tax on multiple home purchases, e.g. buying a third home has a 5% tax, 4th 15% tax, fifth 25%, and if you want a sixth home you have to build it yourself. Would prevent regular people from buying up dozens of homes to rent.
- noisy_boy 9mo agoIt should be much more punishing from the 4th home like 45%. One can understand 2/3 homes, e.g., one to live in and the rest as investment for retirement income. More than that is just greed. Also, if you don't live in one of your properties, either sell one to keep the total number within 3 or pay additional tax.
- immibis 9mo agoif you allow each person to have 1-2 investment homes then you have the exact same problem but now it's decentralised and more people (more voters) benefit from the problem continuing to worsen
- noisy_boy 9mo agoI mean that can be adjusted/tightened - you can say one to live in and one for rental and that's it. Other factors like other investment income etc can also be part of the criteria.
- bombcar 9mo agoChanging the excessively huge (and probably financially needed) capital gains deduction for selling a home and buying a new one to only work if you literally buy new construction - would probably spur something. Existing stock would be depressed in value as the pool of buyers would be smaller, but they'd be more likely to be first time buyers anyway (no capital gains to deal with) and demand for new would increase. But you could end up with insane inversions where existing stock was pulled down to build new to take advantage of the gains exclusion.
- LAC-Tech 9mo agoDon't be a coward, and talk about demand for housing, which in Australia is driven by sustained mass migration. The inevitable outcome of this is increasing homelessness, and likely slums when homeless just start building themselves make shift shelter in such large numbers that authorities can't stamp down on it.
- bombcar 9mo agoWe're not supposed to notice that the best thing about migrants (especially the illegal ones!) is that you can cram them 10+ to a house in squalid living conditions that would be abhorrent to most. It's a price we're willing to pay since we're not paying it.
- LAC-Tech 9mo agoI mean the only downside is the lowering housing and working standards of the native born working class population, but who the fuck cares about them right?
- m463 9mo agoI've heard that japan has a system that keeps real estate dynamic with lower prices.
- ropable 9mo agoIn Australia we've treated the family home as an investment, a primary mechanism for wealth creation (rather than an essential for life) for far too long. I fully agree that supply is the #1 driver for housing affordability, but like many things it's mult-factorial. Tax incentives, market forces, town planning, land use regulation, etc. all play their role. I'm hopeful that successive governments over here show the courage of their convictions and enact enough change that my kids have a chance of getting into their own places, same as I did. Tangent: how should we approach changing the housing mix in a city like Perth where 95% of new homes are large four-bedroom detached houses? It's all very well saying "That's what the market wants" when that's also all the market supplies. How do we bootstrap the idea of smaller, denser, affordable, more-diverse housing options?
- ebbi 9mo agoIt's the same in New Zealand - property is the primary mechanism for wealth creation, and you have boomers with 10+ properties that they use for rental income for their retirement. The issue is exacerbated by the tax structures not incentivizing investments in other assets - e.g. in NZ if you invest over $50k in offshore equities, there is an annual FIF tax that must be paid, even for unrealized gains.
- jorisboris 9mo ago“Show me the incentive and I’ll show you the outcome” Presumably most politicians own one (or more) houses The fact that there is a housing crisis in most of the western world seems to prove this
- sqrt_1 9mo agoCurrent government has explicitly said that they will not lower hose prices: "We're not trying to bring down house prices," Housing Minister Clare O'Neil declared on ABC's youth radio station triple j. "That may be the view of young people, [but] it's not the view of our government." https://www.abc.net.au/news/2024-12-14/housing-minister-says-house-prices-shouldnt-fall/104724144 https://www.abc.net.au/news/2024-12-14/housing-minister-says...
- 9mo ago
- danny_codes 9mo agoWell said. A solution so simple and obvious it’s clear why Americans haven’t gotten there yet
- cush 9mo agoCertainly this is better than nothing though, right?
- khannn 9mo agoIncreased supply comes in majority black and/or low-income neighborhoods here and it's "luxury" units all the way down. Gentrification is the name of the game, while simultaneously reducing social services. In that light, this move is A-OK with me.
- phendrenad2 9mo agoRight, and the large corporations just buy up all the service companies in the area and squeeze both the landlords and renters at once. The only way to achieve fairness is straight socialism.
- drekipus 9mo agoAnd reduce demand, by not importing 3% year on year, where we can't keep up
- SamDc73 9mo agoAs long as houses are treated as an investment, there will be all kind of incentives to make them go up in value. China did "over" solve it by building loads of houses, so everyone's house value just crippled down like crazy. If buying a house delivers 5–10× the ROI of the S&P 500, that’s not “smart investing” then there is a huge problem to be addressed ... (preferably by building more)
- elektronika 9mo ago>China did "over" solve it by building loads of houses, so everyone's house value just crippled down like crazy. That's not really a bad thing unless you believe real estate should be a vehicle for investment. However, in T1 and T2 cities asset prices are roughly on par with western major metro areas. However, property management fees tend to be lower. I suspect the Hukou system contributes significantly to keep housing affordable, and it's not just the massive supply.
- bombcar 9mo ago5–10× the ROI of the S&P 500 - which is really only true because we allow massive leverage on real estate that we'd not on stocks themselves. And leverage brings all the problems associated with it; if you own your house outright and it goes down %10 you're out 10%; if you only have 10% equity and the same happens you're down 100%. The gains, of course, work similarly which is why for so long it's been a heads I win, tails I win.
- nikanj 9mo agoThe window-dressing is great. You get the votes from the renters because you are doing ”something”, and you get the votes from the landlords because property values remain high
- servo_sausage 9mo agoWe have a significant number of problems related to housing; generally I would call it a demand side issue not a supply side however. My reasoning is we have a massive construction sector compared to other nations, with a relatively high productivity in terms of dwellings built per capita. We also have pretty slack standards, with even weaker enforcement. In addition to that, we have a very weak growth in productivity per capita; and since we are trying to rapidly grow, we have to play catch up to provide the same level of services. This needs to happen while our construction sector is stressed, so the same amount of wealth goes a shorter distance again. You can also see this in rental prices; negative gearing should allow the capital price to decouple from the rental yield to a larger extent than without it; but we still see high rents...
- like_any_other 9mo ago> increase supply There's a counterpart to supply in supply-demand. I wonder if we could also adjust that.
- gadders 9mo ago>>If you want housing to be cheaper and renters to be better treated, increase supply. Everything else is window-dressing. You can also look at reducing demand due to mass migration.
- baggachipz 9mo agoYeah, start wars with NATO allies and people will flee your country like it's 1940.
- kmkemp 9mo agoIt's all a policy choice, though. The USA could, for example, increase property taxes on non-primary homes and offset investor losses by adding an incentive to sell non-primary residences for some length of time (say, 2 years). The problem isn't that the solution is a mystery. It's that we barely live in a democracy and the people that own multiple homes have more power than the young-ish (median first time home buyer is up to 40 years old now) population that doesn't vote in large (enough) numbers to offset the power imbalance.