Inflation tamed but housing costs still hurting renters and investors alike
More than 11 per cent of investor sales across Sydney were made at a loss, putting a different spin on the well-worn characterisation of landlords as scheming and greedy.
The rate rises of last year appear to have worked, at least when it comes to inflation.
Inflation data released late last month showed either stable or weakening prices for most of the sectors tracked by the Australian Bureau of Statistics in making its calculations.
Predictably, the cost of housing was among the outlying sectors, rising through January. This long-term trend is entrenched and affordability won’t improve without more homes in the market.
Even with the growth in wages, as reported by the ABS for the December quarter, it’s becoming more and more difficult for people looking to buy a home to do so. That’s because the growth in dwelling prices is far outpacing wage growth, and the gap is widening.
This means more people renting for longer, whether they want to be renters or not. But it’s not necessarily good news for investors.
CoreLogic figures show that for the September quarter, more than 11 per cent of investor sales across Sydney were made at a loss. Apartment owners in areas where unit values have been steady have been particularly affected.
It puts a different spin on the well-worn and wholly unfair characterisation of all landlords as scheming and greedy.
Mum and dad investors forced to sell because they couldn’t manage the rapidly rising mortgage repayments, only to then have to settle for a loss, simply don’t generate the same level of interest or clicks that tenant hardship stories do, even though neither side wins.
Politicians who punch down on landlords for political purposes are making the problem worse for all stakeholders, particularly tenants.
We’ve recently seen the old negative gearing debate rolled out once again. Some politicians suggest its removal is the silver bullet to solve the rental crisis. Making investing in residential rental property less attractive than other investment opportunities will make things worse.
The exorbitant stamp duty those investors have paid, and the other fees and taxes they’re require to keep paying while providing a home for someone to rent, is conveniently forgotten.
The housing crisis is playing out on multiple fronts. One of these fronts is mindset.
Everyone agrees on the need to support tenants and to provide help to people looking to buy a first home. But the prevailing idea that for tenants to ‘win’, other stakeholders like investors and developers have to ‘lose’, is flawed.
All this mindset does is weaken the playing field for everyone. It prevents proper policy from infiltrating politics. It cements an adversarial discourse when cooperation is crucial. It fuels feelings of resentment when empathy and understanding are healthier.
And in this context, everyone loses.
