Why Does Housing Cost So Much?

The evidence is indisputable. The very people which the public (always) look to for solutions are the same grossly incompetent fools who are responsible for the cause of the chaos.

On average, 200,000 new homes get built in Australia each year, with the combined sum contributed by all states and the federal government being just 3,000 per year (or piddly 1.6 percent).

Albo and all the Premiers saying they are united in their “target to build 1.2 million homes over the 5-years to 2028” is as realistic as using a pile of wet straws to build a new Olympic stadium.

Governments don’t fund housing supply – fact!

Via their exorbitant costs and horrendously inefficient processes, they make it exponentially difficult for everyone else to build.

Their pathetic contribution to rental supply consists of just 9 percent of the total national rental pool.

Even more pathetic is that the 296,000 rental homes that they provided way back in 1976 has only increased to 300,000 nearly 50-years later.

Read that again.

95 percent of the homes that people really want to buy are established properties, not new ones.

But buyers and sellers of those properties are prevented from achieving their life-changing goals unless the buyer forks out an ‘admin fee’ of between $40,000 and $100,000.

The actions of the clowns satisfy every definition of ‘robbery’.

And those with aspirations of one day exiting the workforce without being dependent on a taxpayer-funded aged pension are slapped with enormous taxes from all angles for the ‘privilege’ of using their own money to add supply to the rental pool.

The multi-layered consequences include a shrinking rental pool against the grain of an all-time record high overseas migration intake.

Check out this next piece of alarming evidence.

When all of the property taxes charged by all 3-levels of government are added up, Australians now pay $100 billion per year to the clowns who create the housing chaos.

That equates to $2 billion every week and growing.

Stick graphic on your fridge….

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After contributing stuff all to Australia’s housing needs and longer-term lifestyle aspirations, the pocket-picking clowns then do dumb things every day with the loot that they steal.

Things like putting their hand up to host (literally) the biggest event on planet Earth in 2032 (Olympic Games), only to then say they can’t justify investing the necessary $3 billion to ensure that Australia’s 3^rd largest city can replace the existing inadequate stadium with a modern entertainment precinct that every Australian can be proud of during the 2-week event, and millions of people will benefit from for decades to come.

New homes

Depending on the actual size of the house and the location, the back-of-the-beer-coaster cost of a brand new house in outer-suburb is now between $800,000 and $1 million.

Approximately 40 percent of the price of a brand-new property are assorted taxes charged by 3-levels of clowns in ivory towers.

Only a gullible fool could believe that anyone in the circus truly cares about Australia’s housing needs.

The multi layers of tax built into a new-build price include tax on the initial land purchase, ongoing land tax, council rates, infrastructure levies, GST on materials, payroll tax, income tax on staff wages and company tax on the builder’s profit.

It is like being charged $100 for a multi-layered piece of lasagne that does not have any meat, sauce or vegetables.

The current construction cost for a pretty basic new house on the outer fringe of a major metropolis is $2,500 per m2, or $600,000 for a 250m2 home.

The land which that basic house gets built on costs (say) $250,000. And the builder’s forever shrinking profit margin is approximately 15 percent.

Housing Industry of Australia [24/04/2024]

“Government taxes and charges account for as much as 50 per cent of the cost of a new house and land package. Governments are the biggest impediment to home building in Australia. They cannot continue to blame the consequence of their decisions on foreigners or investors who build homes and make them available for rent or sale. State governments increased the taxes on foreign investors a decade ago and we have seen the volume of apartments fall by around 50 percent. The consequence of increasing taxes on homes is that we will get fewer homes built.”

Property Council [25/05/2024]

“…$233,000 (or 30 percent) out of a $750,000 new house and land package in Brisbane’s urban fringe are taxes. So, it takes longer to save the deposit, the buyer needs to take out a 30 percent bigger mortgage, and the interest charges on top of the taxes pushes the total burden to more than $400,000…”

Michael Matusik, urban developer [18/06/2024]

“The construction cost for entry-level apartments in many urban centres across Australia have skyrocketed to approximately $10,000 per square metre, pushing the price of a modest 100m² apartment to over $1 million. Price points over $15,000/m² for half decent new apartments are now increasingly common and are even higher still for quality locations in Sydney, Melbourne and on the Gold Coast. Regardless of price, these apartments are often too small, lacking sufficient storage and parking, and do not align with consumer preferences, particularly when compared to the more spacious and cost-effective detached homes. A new house and land package in a middle-ring suburban infill location will set a buyer back $995,000 or around $5,000/m².  So, half the price of a poxy new apartment. And if the new house and land package is an outer suburb the purchase price drops to under $750,000 or around $3,250/m².”

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Master Builders Association [18/07/2024]

Construction costs in Australia have been driven up by the CFMEU, with independent modelling demonstrating the CFMEU drives up these costs by 30 percent. “Sadly, this means that for young Australians looking to buy their first home, the bar to get into the market is higher and harder as a result. The truth is – according to modelling from the Master Builders Association – for a one-bedroom apartment, this adds up to an additional $128,543 to the cost of building a new property.”

The clowns who run the 3-ring circus try to justify their taxation robbery by saying they are doing such a ‘wonderful’ job at using it to fund new infrastructure, schools and hospitals.

I reckon for every $10 raised by governments, $4 is totally wasted on self-indulgence, exorbitant ‘consulting’ fees, enormous cost overruns and project inefficiencies, and financial prop-ups to their bed-buddies.

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