THE REAL HOUSING PROBLEM

So Australia seems to keep having the exact same debate around housing. It tends to point the fingers at investors. Well, they're the problem or negative gearing or capital gains or all these other tax-based measures where the conversation doesn't direct enough towards what the real underlying issue is. Quite simply, we have a supply problem. We are not building enough real estate and we don't have enough people to build enough real estate is fundamentally the problem behind the Australian property market. Now, this article by Alan and Chris Colla, father and son, both in the world of financial economics, and I appreciate them both. They're both epic at what they do. They dig into this in this article. into big detail and they're talking about very much around how there's just simply not enough skilled workers in order to be able to build enough real estate in Australia and our immigration policies are not bringing enough skilled labor into the marketplace. Australia does not have a land problem. We have so much land, it's not funny. Now, do we have the infrastructure in place to be able to build on that land and do we have the people to put the houses on there? And the answer is no. And unfortunately, all the policies have been failing that very key metric underneath and this constant process of pointing the finger at someone or something else rather than looking at the underlying issue. Underlying issue is there's too much red tape to actually to release new land supply. The immigration policies are not set up the right way to create more jobs in the construction industry and there's too much taxes being taken on the way in by federal and local governments to actually make building a piece of real estate a viable thing to do on a consistent basis to create affordable supply in Australia. So the government's Housing Accord target is 1.2 million new dwellings to be created over the next 5 years. That's around about 240,000 properties every single year but the question you've really got to be asking is when was the last time Australia got anywhere close to that number because I can tell you now, we've never done it in a single year ever before. I think the most we ever got to was 220,000. Now, we're not talking about just releasing some new land supply. What we're talking about is completed dwellings and that takes a whole change almost in the industry and the regulation from how the land is released to the regulation to rezoning to the skilled workers required to actually build it and making it viable for construction companies to actually make it happen. In their own targets, they're predicting only 862,000 dwellings are going to be built where they're saying that our target is 1.2 million. That means every single year we're going to be falling short somewhere in the vicinity of 30,000 to 40,000 houses every single year and that's on top of the existing current undersupply which is in Australia. So if housing is really a national crisis like what everybody talks about, then the conversation needs to change from who to blame and pointing the fingers at a certain demographic or a certain group. Honestly, I'm sick of hearing about it. The conversation really needs to shift to how can we create more capacity in Australia to create more affordable real estate so everybody has a home and that's going to take a much more rounded approach from are we going to actually decrease the regulation provided for new land lots to be released? Are we going to change zoning in a much more rapid way? Are we actually to support construction companies and business owners because so many of them are going out of business? Are we going to increase the level of skilled labor in Australia and change immigration policies to actually handle some of the underlying issues? How are we going to increase the production capacity of real estate in Australia? That's the conversation that we need to be having rather than talking about capital gains, talking about negative gearing, or talking about investors that are blamed for the problem in the marketplace.