Wednesday, May 31, 2023

Australian building approvals hit 11-year low in blow to hopes of solution to rental, housing crisis

There is actually no rental housing shortage in Australia. Huge numbers of dwellings have been taken out of long-term rental and advertised as holiday lettings, via AirBnb and the like. If all the holiday lettings were transferred into long term availability, the rental shortage would vanish. Governments are aware of that but cannot do much about it.

They need to ask WHY owners are putting their houses into a high-maintenance and intensive management situation. Why are owners making more work for themselves? There is only one main reason for that. Holiday lets escape the onerous regulations on long-term letting. It follows that replacing all the long term regulations with the same low level of control that prevails for holiday lets would rapidly see lots of dwellings back in the long-term market.

But governments love their extensive "pro-tenant" regulations so no change is likely. The rental shortage is goverment-created, not a deficiency in housing supply

Australia’s building approvals have hit an 11-year low, in a fresh new blow to hopes of a quick solution to our housing crisis.

According to data released by the Australian Bureau of Statistics: “the total number of dwellings approved fell 8.1 per cent in April, in seasonally adjusted terms, following a 1.0 per cent decrease in March”.

That April figure is the lowest monthly figure in over a decade.

“Total dwellings approved fell to the lowest level since April 2012,” Daniel Rossi, ABS head of construction statistics said. “The overall decline was driven by a fall in approvals for private sector dwellings excluding houses, which fell 16.5 per cent, to the lowest level since January 2012

Rising interest rates and inflation are affecting the number of new home builds. Picture: Brendan Radke

“Private sector house approvals also continued to decline, falling 3.8 per cent in April, following a 3.7 per cent decrease in March.”

The slowing rate of construction is likely to exacerbate Australia’s housing and rental crisis, at least in the short to medium term.

Master Builders Australia said the slowing rate of construction would “impact Australia’s ability to meet its housing target”.

The Albanese Government has pledged to build one million homes over five years from 2024.

“The reverses in new home building approvals come in the aftermath of twelve months of rising interest rates and inflation at its highest in over 30 years,” Master Builders Australia Acting CEO Shaun Schmitke said.

“The biggest drops were in higher density home building approvals and home renovations falling 16.9 per cent and 26.6 per cent respectively.

“Although demand for medium and high-density housing is surging, the pipeline of new stock is rapidly diminishing.

“The fall in new builds will exacerbate pressures in the rental market at the worst possible time with media reports today showing the portion of income needed to pay rent lifting to the highest level since June 2014

“To ensure we continue to supply enough homes to house all Australians, governments need to look at what impact their regulations and policies have on the cost of building homes and on the cost of building social infrastructure.”

Record high immigration is also set to put further strain on Australia’s housing market.

According to the PropTrack New Homes Report – May 2023: “While the government has committed to increasing housing stock, construction industry headwinds and fast population growth may hamper plans to provide a prompt solution to the housing crisis”.


Must not say a divisive issue is divisive

With a strong Left/Right split on the issue, how can it not be divisive?

Prime Minister Anthony Albanese says the success of the Voice to Parliament referendum will depend on millions of conversations across the country.

Channel 9 has become the latest broadcaster to come under fire for its reporting on the Voice to Parliament, after the referendum was labelled “divisive” in a news bulletin.

Australians supporting the Voice have taken to social media to call out the “despicable” act that involved Sydney newsreader Amber Sherlock reading out the phrase “the divisive Voice to Parliament” at the start of an intro to the next story.

The incident occurred on Monday evening and was used to highlight Prime Minister Anthony Albanese’s visit to Adelaide “for a special keynote speech”, the annual Lowitja O’Donoghue Orations.

In the speech, Mr Albanese addressed his support for the Voice and called on Australians to “do one better”, while dismissing claims it would divide the nation.

Sherlock later crossed to reporter Mike Lorigan to highlight Mr Albanese’s success at the talk, but pro-Voice supporters were upset with the use of the word “divisive”.

“So Channel 9 are now officially referring to The Voice as ‘the divisive Voice to Parliament’ in their news reports? Just disgraceful,” one Yes supporter tweeted.

They later added they heard the word “by chance” and initially believed they had misheard the comment.

“When I replayed, I couldn’t believe (Sherlock) said that,” they said. “It is kind of frightening.”

Another supporter labelled the wording as “despicable” and “outrageous”, stating she felt “quite shaken”.


Work until 70: higher pension age on horizon as life expectancy rises

Australia’s pension age will rise to 67 on July 1 this year and needs to increase further, new research has found, but it warns it should be a gradual climb spanning decades.

As France braces for more nationwide protests next week over its planned retirement age rise from 62 to 64, a new report by Macquarie University’s Business School says Australia’s pension system will require a pension age of 70 to be sustainable amid a fast-growing group of very old retirees.

However, it says the higher pension age of 70 should not be introduced until 2050, following a rise to 68 by 2030 and 69 by 2036.

“As Australians live longer than before, it presents a challenge to the government to fund retirees through a pension scheme,” said Macquarie University statistician Professor Hanlin Shang.

“Raising the pension age is the obvious way to sustain the current pension scheme without collecting more taxes,” he said.

The report’s suggested time frame for pension age increases is much slower than a 2014 Liberal Government plan to reach 70 by 2035.

That plan was abandoned in 2018, and Professor Shang said it had faced stiff public opposition and claims it was causing anxiety among older people.

He said raising the pension age to 70 by the mid-2030s would be “exceeding the increase in human life expectancy” and his analysis, conducted with Monash University professors Rob J. Hyndman and Yijun Zeng, found a slower gradual rise would sustain the current system without requiring extra federal government input.

“While it’s great that we are living longer, it may not be good for the government pension system.

“Who would have ever thought there would be so many centenarians? As people live longer, there is a longevity risk and they will consume more pension from the government.”

Professor Shang said government figures showed in 2021 there were 3700 centenarians in Australia, and this was expected to reach 50,000 by 2050.

Social researcher Mark McCrindle said Australia’s pension age would need to increase but “incremental change is the way to go”.

“People live for the present – if it’s happening down the track and if it’s in small steps, we are fine with that,” he said.

“We are living longer than we were a decade ago and the trend continues to point up.”

Mr McCrindle said average life expectancies for all Australians would exceed 85 by 2030, and seniors had more active lifestyles – people in their 80s were getting hip replacements and wanting to do more.

“It’s a good new story that’s driving the ageing of the population,” he said.

“People are active in work later. Because we are in a knowledge economy people can work later and retire later.

“It’s arguable that people’s skill set grows with age in a knowledge economy – their value becomes increased in the workforce as they age.”

Compulsory superannuation is also helping Australians enjoy active lives as seniors, although Professor Shang said most Australians reaching pension age still received a full or partial age pension.

He said Australia already had one of the highest pension ages in the OECD, on par with Iceland and Norway.


Federal Labor needs to make QLD inroads: PM

The Qld vote has often stymied Federal Labor

Labor will need to make inroads in Queensland at the next federal election, Anthony Albanese has told colleagues, but he made no mention of the upcoming Fadden by-election.

Labor will need to make inroads in Queensland at the next federal election, Prime Minister Anthony Albanese has told colleagues, but he made no mention of the upcoming Fadden by-election.

Mr Albanese addressed colleagues in Labor’s caucus meeting on Tuesday, noting the resignation of WA Premier Mark McGowan.

Mr McGowan’s popularity helped sweep Labor to power federally, with the party picking up four seats from the Coalition in the western state – securing the PM a two-seat majority.

Despite Mr McGowan’s absence, Mr Albanese told MPs Labor could pick up at least two more WA seats at the next election, before naming target seats across the country.

While he named specific seats in other states, such as Menzies in Victoria and Banks in NSW, Mr Albanese did not refer to any particular Queensland seats.

Labor went backwards in Queensland in 2022, losing the seat of Griffith to the Greens while failing to win back any regional seats from the LNP.

It will face a battle on two-fronts in the state, as it seeks to fend off the Greens on its left while seeking to take ground from the Coalition to secure its hold on government.

The upcoming by-election in Fadden, to be held on July 15, was not raised.

Labor has yet to preselect a candidate for the safe LNP seat, but is expected to open nominations from Tuesday.

In the past two federal elections, 2022 and 2109, Labor has had eight target seats including Forde, Flynn, Dickson, Petrie, Dawson, Bonner and Leichhardt.

The Albanese Government increased its majority to three seats after it won the Aston by-election in Victoria earlier this year.




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