No I agree with you, and I don't know who would support an unlimited free market, because sometimes govt. is required to step in. But I see this govt. intervention working against big business like the fuel thing you mention. I am less keen to support govt. intrusion in smaller private affairs, like a bloke who owns and lets out 7 houses.

Remember not many want to rent, supporting landlords at the expense of housing affordability is madness and is both Howard and Kev's policy probably because they don't want to alienate key voters.

Absolute madness.

Wasn't there talk in the uk of taxing second properties becuse of their effects on small towns and house prices for locals/key workers?

Hiya,

I am aware of Demographia’s reports although I must confess that I have not read the 2006 study in any detail – just had a quick flick through and some points to keep in mind:

The authors of Demographia are not exactly un-biased (in my humble opinion). As I understand it there are two authors one is an academic with close ties to the development industry (Wendell Cox) the other is Mr Pavertich of ‘Pavetich Properties’. So, these are people that have a vested interest in promoting more house-building, and in promoting relaxation of planning laws/regulation.

The other is that the have been known to quote some sources which are a little spurious – when writing professional reports and so on I don’t often quote something from the newspaper – but I note that in their 2006 report they quote from people with titles like ‘newspaper columnist’! Not sure about you but in my world newspaper columnist are not necessarily right – they are just giving their opinion, and often these opinions are ones designed to sell newspapers (ie controversial).

The seem to tie everything to ‘excessive urban planning regulation’ and discount any other influences in the increase in housing supply.

Give you an example from where I work at the moment – I KNOW that there are a couple of large housing sites that have planning permission. But they are owned by large companies and they have not yet been developed! Developing those sites NOW would (I presume) result in a reduction in housing in the local area by providing an influx of new houses onto the market. Yet this has not been done! This could be for any number of reasons, perhaps the company cannot find enough tradespeople, perhaps they are waiting on some key piece of infrastructure (sewer or road connection) perhaps they are simply holding back these sites because by doing so they are artificially inflating the eventual house prices (thus making themselves more profit). Whatever the reason, its not over-regulation, because the sites have planning permission already!!!

The Demographia report does not take any other factors into account – what if there is a shortage of tradespersons in Perth, or a shortage of electricians, or that delayed investment in infrastructure, roads, sewer, water, electricity, public transport or any other of a number of factors is slowing housing? What if Development companies are releasing new housing/land slower than they could do because they will make more money? I’m not saying that any of these reasons are correct but surely they may have some impact. At the very least they should be listed in their report as factors?!

Also, the comparison of housing prices with incomes is a little tricky without all of the information. And by this I mean, what if housing process in Austin have gone up significantly, but in the past decade the median income has also risen significantly? The net result would be housing being more affordable (as a percentage of earnings). This is a long shot I have to admit – but what if there was the establishment of some high –tech laboratory (like the Pzizer plant in Kent which employs thousands) or new banking buildings opened in Austin and the average wage went up significantly?!?! The point is, that in order to compare housing prices to income you need to know IF incomes have changed as well. We need more info on the Austin economy to say for sure (I don’t know anything about Austin so can’t comment – but shouldn’t the report make this clear if it is going to be considered to be robust??)

The other comment that I am unsure about is where the report says something like:

“In Perth, the home building industry is permitted to build only as many houses as are allowed by the state government, which has been considerably less than the demand”

I have nbever worked in WA but as far as I am aware government Policy does not support htise quote – the WA ‘Urban Growth and Settlement Policy’ (March 2006) lists general things to consider – nothing that anyone would argue against (like, new development should be supported by infrastructure, and new areas should not compromise existing ecologically sensitive areas etc)

Western Australian Planning Commission NETWORK CITIES document says (for housing in Perth:

‘Planners must respond to this trend, which is expected to continue, and the need to provide at least an additional 13 500 new houses, on average every year, to accommodate the population by 2031.’

Note that it says AT LEASY 13,500 homes per annum – there does not seem to be a restriction on any maximum number of houses

(I might be corrected on this and if anyone could clarify I would be grateful – as I said I don’t work in WA and would be interested if any government would provide a maximum amount of housing – especially under the current climate of affordability issues etc


I have to point out here that I am in no way trying to defend the planning industry – I am as critical as anyone of Government Policy and yes, planning can cause problems – but its there for a reason.

Its there so people don’t have chicken sheds built next door to their house, so that infrastructure can keep pace with growth and so many of the aspects of Australian life that many people love can be protected (who wants to live in shitty suburbs with limited transport, congested roads, flooding cause infrastructure can’t keep pace?)

The key, in my opinion, is getting the balance between regulation and freedom! It’s a difficult balance to achieve and planners are pushed from pillar to post by all of the relevant lobby groups etc.

On the one hand they are blamed (as per the Demographia report) for holding back housing and causing affordability problems, but if they allowed free reign of development how many would complain about poorly laid out towns with limited access to services?)

Just some comments – I could make more but have waffled long enough!!

To be honest I think it's too complex to predict and if any of us could we would be loaded

Thanks Andy, what you write sounds like common sense to me. But Perth houses are much more expensive than Austin houses (for example) - so if this is because Perth wages are lower than Austin wages, the effect is still the same I presume - harder to buy a house.

Also, wild development shouldn't be encouraged anyway, because while a small percentage of the UK is built on, and a tiny percentage of Australia, the last thing we want is housing estates all over the hills and valleys and coasts!

Despite all the figures, housing is still considered affordable in that it represents a third of the average household income. Surprisingly enough.

OK 2 incomes rather than 1.

I think the times have just changed permanently in this respect.

It will slow down for a while.

As for the portfolios - like alot of speculative wealth creation, the first 1M is the hardest, and most risky then it gets piss-easy. ALot of these investors don't make the mistake of collateralisation in pyramid fashion so they can't lose it all.

Yeah, I think that the report is useful in telling us the relative affordability of housing compared to wages in various cities - but beyond that its a bit speculative - the reasons WHY housing is more expensive in certain areas is a complex one that would take many many reports to understands fully. What I don't like about the report they have presented is that it says basically:

Houses are expensive - this is because there is not enough supply - supply is held up by the planning system.

Its very simlplistic and does not really represent a balanced view of ALL the issues affecting housing supply (and affordability)

A

Yeah, I think that the report is useful in telling us the relative affordability of housing compared to wages in various cities - but beyond that its a bit speculative - the reasons WHY housing is more expensive in certain areas is a complex one that would take many many reports to understands fully. What I don't like about the report they have presented is that it says basically:

Houses are expensive - this is because there is not enough supply - supply is held up by the planning system.

Its very simlplistic and does not really represent a balanced view of ALL the issues affecting housing supply (and affordability)

A

It seems to me, contrary to the arguments that you have put forward, that the problem is clearly with planners. You are a planner, so of course you will defend your profession. But, please tell me what purpose the planning system serves other than to slow down development. What value do they add? It seems to me that planners merely fuel the beaurecratic fire.

T

I am a self certer, hideous mortgage I have , someone should pay for giving it to me, and is why my house is on the market.

Just cant afford it, more to live than bricks and mortar....when you are struggling to pay for everything.

Well, first, just because I am a planner does not mean that I will automatically defend the profession - in fact, I primarily work for big developers, so if anything I should be arguing to reduce the planning red tape etc that is in place.

What does planning add - well, for a start its what gives (or used to anyway) people their quality of life in places like Australia - the reason people can live (on the most part) in nice houses, in a nice area with appropriate schooling nearby, health systems and tranport, access to employment, a nice park up the road for the kids and a state forest an hour away for camping on the weekend! the beach down the road is protected from development and the National Park up the coast is there because it provides recreation to all those peple that live nearby (as well as having conservation benefits) - all of these things are there, providing you with a quality of life because planning required it to be so!

There is often an argument put forward by developers to say that the market alone should detemine house building - but the market would then result in just that - HOUSES!! (cause thats where the money is to be made). What makes a good place to live is not just houses at an affordable price but also the amenity, facilities and protection of some areas for the enjoyment of everyone - recreation areas, access to decent transport and employment opportunities and activities for your kids to enjoy nearby. Ask people on here to list what they like about where they live and I'm sure many will say that its the services, facilities and recreation they can enjoy, their tranport links etc - planning helped put those things there! Development companies (who I represent, don't forget) are not really interested in providing things that aren't making them profit - schools, hospitals, nature reserves, doctors surgeries, parks and gardens...everything you love about your area (other than housing) is NOT high on the priority list of developers - so if you take the planners away and let the housing companies go for it, sure, you'll end up with affordable housing - but they would be houses in an area that noone would want to live.

I don't agree with the argument that planning is there to slow development!! Why the hell would planning (or planners) want to slow development!!??

Planning is about putting things in the right place! the only argument about timing of delivery comes with regard to timing if key infrastructure is not in place (and thats not planners, thats the people paying for the infrastructure). If there is to be an argument that the planning system is slowing development, its because the key INFRASTRUCTURE and FACIULTIES are not in place to allow the development to happen!

For example, do you think a new subdivision of 1000 homes should go ahead NOW when the freeway and train network to connecting it to the city (employment) will not be open for 3 years!??? Of course not, because you will create a shitty ghetto without links to employment, that will deteriorate over time to be hell on earth!

What happens when you just forget the planning, when infrastructure doesn't line up with new homes etc - well, you get what you have in the South East of England at the moment - housing, housing, housing is the way forward for england and its planning system - 100,000's of thousands of houses are now being built (tens of thousands in some towns - like Ahsford in Kent for example.

What has this resulted in?? cheaper housing - ummmm. NO!!

What about shitty sprawling suburbs with poor facilties, YES! Lack of employment opportunities and commuting 2 hours each way to London YES, with trains that aren't capable of dealing with increased passengers YES (people are STANDING for their daily 90 minute commute each way - not much fun I don't imagine!) Water supply problems with drought conditions and hosepipe bans every year for the past decade (except this year) YES, NHS system that can't cope with the increase in population, YES. Shall I go on........??

Planning isn't about holding things up - its about putting things in the right place! You can't building houses where the infrastructure won't support them - pretty simple really. The UK South-east is a classic example!

If you substitute the 90 minute commute for 60 mins + (yes, standing!) you could be talking about Brisbane!

If this is your only reason for going to Australia you shouldn't go. You won't make it.

Exactly right - these are the sorts of things that happen when good planning is ignored based on some misguided view that it will result in cheaper housing, or its what the community wants or whatever.

How many times do you think I have been in meetings with politicians (of all persuasions) or senior gov't people and said "well, you CAN put all those houses there, but the people that live there will not have access to X, Y and Z because of ......."

You just end up with places that are NOT as nice to live in as they would otherwise be!!

You want cheaper housing - provide some infrastructure!!

Tax would have to start heading north for this to happen.

or add 10 mins you could be talking about Mornington to CBD