Jim Penman argues Australia's housing reforms will backfire. Removing capital gains tax might lower prices for buyers, but pushing investors out of the market will raise rents for the poorest renters. He says the real fix is relaxing zoning laws to build more homes.
Under Labor, for the first time in a generation, first home buyers are getting a fair crack. After 25 years of Howard and Costello pushing home ownership out of reach, we have reformed negative gearing and capital gains tax. When everyone can see that it's not fair—
Yeah, mate, what you've done is you've got rid of capital gains tax, yes, and it's actually taking prices down a little bit, but what's actually happening though is that you're forcing up rents because you're driving the investors out of the market, which is true. So the people who are most in need, which is the homeless and those who are renting, are going to get charged more. What we really need is a proper solution, is you've got to relax the zoning laws so that the price of houses can come down so people can afford to buy them and people can afford to rent. These are ridiculous solutions. You're actually helping the people who can just afford to buy a house, who are the better off, but you're really stuffing up the ones who can't afford to buy their house, like the renters and the homeless.
Rising mental illness and falling birth rates have the same cause, it is this.....
