If there were an Olympic gold medal for inflating real estate prices Australia would win most of the time.
We have two of the five least affordable real estate markets on the planet — Sydney and Melbourne.
We have an unfettered banking system that lends like there’s no tomorrow.
We have an abundance of cashed up foreign buyers with free access to purchase and shelve properties.
And, we have a tax system that advantages “investors” and disadvantages people who just want somewhere to live.
So, the question must be asked: “Who benefits from high real estate prices?”
It’s certainly not average people. They get stuck with a huge and perhaps even perpetual mortgage. A young couple might have to give half (or more) of all they earn to the bank.
The real winners are:
They get to make record profits every year as Australians are forced to take out bigger and bigger mortgages to finance a house.
- Real estate agents
Who get a percentage of ever inflating sale prices.
- Property speculators
Who get carried to wealth on the tide of rising prices.
Who are we running the economy for? Is it these three special interest groups or is it ordinary citizens?
It’s a shame that ordinary citizens don’t have cashed up lobby groups prowling the halls of power.