Why the Australian Governments housing policy was always going to fail.
| The intention was clear. Make property investment less attractive and more homes would return to the market, increasing supply and improving affordability. Instead, many investors have made the same decision. Wait. Most people selling in today’s market are doing so because they have to, whether through changing circumstances or deliberate lifestyle decisions. Those who don’t need to sell are continuing to benefit from rising rents while waiting for conditions to improve. The result is that many of the properties expected to come onto the market simply haven’t. Buyer demand hasn’t disappeared. Buyers are still competing for quality homes, they’re just competing over fewer of them. If interest rates begin to fall over the coming months, confidence is likely to strengthen even further. Unless supply increases at the same pace, today’s balance could shift surprisingly quickly. The irony is that policies designed to increase housing supply have, at least for now, encouraged many investors to delay selling instead. Governments have many levers available to improve housing affordability and ease cost-of-living pressures. The challenge is that when policy changes don’t produce the intended behaviour, the people trying to enter the market are often the ones left waiting the longest. |