While Australian policy makers continue to pretend the nation’s housing woes are about the lack of properties to satisfy the market demand for them, real life has a way to prick the illusion. Cities like Melbourne, Hobart ad Darwin recorded falls over the last month. In the longer-term, the rate of rise has been shrinking, not hugely, but it’s definitely there.

The data doesn’t suggest that the era of excessively priced homes has come to an end. It suggests that the supply and demand explanation mises the point. Everyone needs a home. Not everyone can afford to buy one. This is the problem. So, while there is demand, what is called the effective demand trails behind it. Effective demand refers to demand that the person is able to pay for. With housing, lagging effective demand takes the form of unaffordable housing.

Thus, the existing housing crisis can’t be solved by building more homes to be sold at market prices. The reality is that in Melbourne’s CBD only 5 percent of private dwellings have no tenants. In Sydney’s CBD its 3.1 percent. But if we look at the wider picture, the 2021 census revealed that more than 1 million homes were empty. This hasn’t changed in 2024. In fact, the unoccupancy rate has been increasing since at least 2026.

Some of these homes will be new sales changing ownership and occupancy. Other will be holiday homes. But if this is all there is to it, as some in the industry are claiming, the proportion would be stable and not consistently climbing over time

Data from the Reserve Bank shows that in the 15 years to 2015, the proportion of investment properties versus owner occupiers grew consistently. The failure of the Reserve Bank is that it assumed all housing ownership is mum and dad housing. It did not factor in that driving the increase has been the entry and expansion of corporate housing. This is ownership of large portfolios by big companies.

Wall Street and Fleet Street property investors have moved into Australia. They are getting hold of an ever-increasing proportion of the available housing stock and engaging in major building projects. They have market power and the capacity to use digital information to manipulate the market and impact significantly on prices.

In Australia, they can operate almost anonymously. There is a lack of regulating legislation and oversite.

There is a lack of oversight, and this is made worse still by government providing generous handouts in the forms of negative gearing and capital gains Tax offsets when they sell properties. Government projects said to be to provide affordable housing engages the same Wall Street investors, giving them an extra bite of the public purse.

The proportion of the total market that corporate ownership takes is up to question. Government authorities don’t publish statistics on this, and the industry has no interest in doing so. Claims are as high as 60 percent of new properties. The proportion may not be this high. But we can be certain that it’s high enough to enable monopoly power to increase the cost of housing and rents.

Negative gearing encourages corporate owners with large portfolios to keep their properties empty, because the government pays them rent foregone, and empty properties cost less to maintain. It’s highly likely that corporate ownership is a major reason for the rise in unoccupied properties.

For instance, a common practice in major housing projects is what is called staged release. Only selling or renting a portion and holding the rest back crates an artificial shortage that effectively gets buyers and renters outbidding each other., and this is legal in Australia.

On top of this, when they partner on government projects, they enjoy a 63 percent increase in depreciation write offs, can sell off rental properties after 15 years, and are gifted with a 50 percent cut in land tax. These projects are ostensibly to build more affordable housing. But they also encourage more corporate takeover of the total housing market and all the disadvantages that come with it.

Corporate ownership is definitely a big factor in the property price bubble and excessively high rents.

The Wall and Fleet Street investors, generally hiding behind other names ae involved in partnership with the redevelopment of public housing estates. No wonder public housing is being decimated.

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Melbourne’s high rise public housing tenants are fighting the Victorin government’s plan to forcefully demolish their homes. There has been no consultation, and most of them, 20,000 out of 30,000 will be thrown out into the high costs public housing market.

Some will be offered places in newly defined “affordable housing,” where the rents are set at up to 70 percent of market rent. Public housing residents will still be put into much worse position by losing the 25 percent of income rent they now have. They will be excluded from the high-cost inner suburbs where many ow live.

Not only this. the dispersal of public housing tenants will destroy communities that have been built over years. These communities are an important support that adds to the quality of life.

Public housing is being deliberately destroyed by the greedy. The government’s plan unveiled by the previous Premier Dan Andrews in the state government’s housing statement last September, is really a vehicle to hand over valuable land to developers looking for a quick profit. The residents are treated as the collateral damage of a business deal.

Bulldozing ahead through its agency Homes Victoria, the state government is pressing on a plan that effectively eliminates public housing. The quantity of public homes is being reduced, and this is being covered by vague talk about social housing and affordable housing. The harm is in the detail and not the labels.

By failing to listen to the tenants, this government is proving its low regard for them. Providing genuinely affordable housing isn’t the objective. The real objective is serving the ideology that the market knows best hoe to provide housing.

Public housing was never given. It was forced from government by those who fought for it in the past. Their concept is that there should be alternatives to the high cost of housing, which would ultimately be available to everyone. They fought for these public homes to be in locations that gave access to work, life, and had access to public transport.

It’s thanks to them that we have housing estates and other public homes in the wider community. Their legacy is now being destroyed.

Public housing never sat well with those lining their pockets in the private market. Most of those warming their seats on government benches didn’t like it either. They like it even less now, because the property price bubble offers more cream, Land now occupied by the housing estates is a big bowl of cream for those able to cash in.

The dismantling of public housing has been going on for some time. First of all, it was reduced to a charity for only the poorest, when it was supposed to also be for those normal wages. This eventually provided the cover to gradually reduce the budget on existing homes and neglect maintenance needs and the quality of departmental service.

Under today’s cost of housing crisis, there is even more justification for public housing and its availability to all. Instead of being destroyed, it should be expanded big time. Existing residents should not be allowed to become the victims of government servicing greed. These people are fighting back, and they need the support of the wider community.

A class action to stop demolition is before the courts. Residents at 33 Alfred Street and 120 Racecourse Road in North Melbourne, and 12 Holland Street in Flemington. Have engaged Inner Melbourne Community Legal for this, but legal manipulation has been used to delay the hearing. This will now begin on 28 October. Meanwhile demolition is about to begin anytime after 19 July. They won’t wait until the hearing. This will be fought all the way.

In total, 44 towers across all public housing estates have been listed for demolition. This must not happen.

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The Parliamentary Budget Office (PBO) has released some information requested by the Greens relating to the cost of negative gearing and capital gains tax discounts. This revealed that it will cost taxpayers a massive $165.58 billion between the 2024-25 and 2033.24 financial years.

Negative gearing is what landlords get when they are not getting rent from tenants. Capital gains tax discounts are the write offs their taxation enjoyed when they sell the property. The bulk of this money goes to corporate landlords.

These provisions have encouraged big time investors to enter the real estate market, making them a major factor in the home cost bubble. Highly inflated property prices and rents are the result. Thus, a corporate grab on government funds feeds the existing home affordability crisis and not a lack of supply, as suggested by the government and real estate industry.

The graph below shows that the gap between real disposable household income and the rea national house prices is widening. The home affordability crisis is getting worse.

Imagine if $165.58 billion was spent on low rent public housing instead. This would force prices and rents to fall. This has not happened for two main reasons. Successive governments have not been willing to cross an industry, especially property developers, who are major donators to political parties and has an effective lobby. According to a case study by think tank The Centre for Public Integrity, they handed out more than $54 million between 1999 and 2019. This is the tip of the iceberg, because Australia’s disclosure laws have cracks wide enough to drive a truck through.

The other reason is that a large proportion of parliamentarians jumped onto the gravy train and have their own property portfolios. Cutting negative gearing and capital gains tax would hurt their own hip pockets. According to an investigation by the ABC in 2017, this applied to almost half of the members of the Federal Parliament. They have little incentive to upset the gravy train.

Overlay this with an ideological commitment to the worship of the market, and we know why nothing has been done, even though belief in the market should mean no government involvement. But this principle is flexible. It all depends on who gets the benefit.

The Greens have called on the Albanese government to wind back both handouts, in return for support of its Help to Buy scheme, which is currently being held back in the Senate.

This scheme is to enable lower mortgages through shared cost and owners between prospective buyers and the government. It rides on the premise that the problem is a shortage of supply. The main beneficiaries are once again the developers, builders, real estate industry, and the banks who provide the mortgages. For many, and especially first home buyers, the price will still be too high. They will still be locked out. The Help to Buy scheme will be for the better healed.

Nonetheless, a compromise that starts to wind back a major cause of the housing affordability crisis is worthwhile.

And it must be a staged wind back to avoid dislocation to the economy. Other measures must be included. Scaling up government investment in low rent public and cooperative housing would be a good start. The need for lower cost housing for essential workers has already been identified. Interest rates on mortgages could be frozen. Control of rents by imposing a ceiling on what landlords can charge is another worthwhile measure. There can be a limit on how many properties a single landlord can own. This would help remove the corporate induced upward pressure on prices.

Current legislation to encourage built for rent projects by developers stipulates that 10 percent of these homes must be provided at an affordable rent. This means up to a maximum of 75 percent of the market rent. This is not nearly enough to make a real difference.

Don’t expect more action soon. Our politicians are averse to it. Only public opinion and sufficient pressure can make them reconsider.

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