Taxing Homes

This is just silly. Large houses are more expensive anyway and energy inefficient houses have more expensive upkeep. The market is more then able to efficiently allocate resources , we sue don't need some academic to tell us what to do.


PEOPLE who want to build energy-guzzling McMansion-style homes should pay more taxes, an academic says.

And taxes should also be used to make owning multiple plasma TVs prohibitive, says Melbourne University construction expert Dr Robert Crawford.

Rapidly increasing suburban house sizes, more reliance on cars and a rise in demand for consumer goods had wiped out many of the benefits of building energy-efficient homes, he said yesterday.

"The most dominant characteristic of the new houses in these estates is their size ... new residences are well over 200sq m, more than double the average of the 1950s," he said.

Releasing a faculty of architecture, building and planning study on the impact of housing on greenhouse emissions, Dr Crawford said one option was to penalise those who built big houses.

Read more: http://www.news.com.au/money/tax-time/higher-tax-call-for-mcmansion-dwellers/story-fn8qmzek-1226068683960#ixzz1OJ7a15Vx

Home truths

In the post war years housing prices were about 3 times median household incomes and we managed to house millions of new families. Now they are now about 6 times the price . Maybe if we returned to the same level of regulation we had pre 1970 we would be far better off. See Bob Day's essay.

Interest rates going up again

During the 1990's I worked at Centrelink and saw the devastation high interest rates caused families. It looks like we are in for a repeat:

MORTGAGE rates are predicted to hit a horror 10 per cent within the next two years as the Reserve Bank hikes rates to prevent runaway inflation.

Leading economists say soaring commodity prices and rapidly rising employment are stoking dangerous inflationary pressures that the RBA is determined to stamp out.

As a result, economists at Macquarie Bank and Commsec, the Commonwealth Bank's investment arm, have both forecast the cash rate will hit "pre-crisis highs" of 7.25 per cent by 2012 if the economy continues to perform so strongly.

Since banks have expanded their profit margins during the financial crisis, that translates to variable mortgage rates of 10.1 per cent - the highest since 1996.

The worst hit are going to be families who were on modest incomes but took advantage of the Rudd government's home grants. Also maybe if the government hadn't been handling money out as if it were candy inflation wouldn't be such a problem.  

Couples work twice as long for a house

So says todays Telegraph:

AUSTRALIANS have to work almost three times harder to pay off the average family home than they did 50 years ago.

Figures compiled by CommSec for The Sunday Telegraph reveal homebuyers on the average income now have to work for 19,374 hours to buy the average Australian house with the average mortgage.

Based on an eight-hour day and a five-day working week, that equates to about 10 years of work. In reality, it takes much longer to own a home, because wages must pay for all living expenses, not just housing.

Kristina, Barry how about giving families a fair go and come up with a plan to increase the housing supply? Release more land,  more urban consolidation, better transport to areas outside Sydney, etc. etc.

Home buyer grant a mistake

At last a politician who has the sense to tell like it is:

Shadow treasurer Joe Hockey said there was also legitimate concern that the grants might be pushing up the price of housing.

He said there was need for caution as the Government and everyone else was predicting a rise in unemployment of up to 300,000 people.

"I would hate to see that those people being encouraged to go out and buy their first homes and are going to end up unemployed in the next 12-18 months,'' he said. "

It might be great to stimulate and distort one part of the economy.

"But if it means that those poor buggers are going to end up unemployed and default on their home loan in 12 or 18 months time through no fault of their own, then this will be seen to be a mistake.''

And he knows the real issue is supply not demand:

Mr Hockey said all the grants did was increase housing prices unless there was an increase in housing stocks.

"We don't know whether there has been a sufficient increase in the amount of housing provided to meet what has stimulated demand,'' he said.

Joe, can you please send a memo to your state counterparts.

Housing to become cheaper

Heres some good news, well its good news if you are looking for a house to buy. The housing bubble is going to burst:

AN international group has predicted that the housing bubble in Australia is yet to burst.

The public policy group Demographia says a comparison of median house prices with median household incomes in Australia, Canada, Ireland, New Zealand, Britain and the US found Australia has the most cities in the "severely unaffordable'' category - where house prices are more than five times the median income.....

Demographia says affordability in Australia is worsening relative to Britain, Ireland and New Zealand, where prices have recently collapsed. Australia will be next, it said.

The government should do absolutely nothing to prevent this. Let the market work and give a chance for home buyers to enter the market.