Leading auctioneer Tom Panos says immigration is to blame for Australia’s housing crisis and developers are being prevented from building more homes because of municipal bureaucracy.
While Panos supported immigration to Australia, he said housing needed to be built to support the growing population.
“We’ve allowed mass migration, which is fantastic, but no one has sat down to think about where these people are going to live,” he told Daily Mail Australia.
He also noted that Australia was already struggling to house its existing residents and that the growing population was only compounding the problem.
In the year to March, a near-record 509,800 net migrants moved to Australia, thanks to a huge influx of international students during a rental crisis.
This was significantly higher than the Treasury’s May budget forecast of 395,000 for the year to June 2024, casting doubt on the government’s forecast that immigration levels will slow dramatically to 260,000 in 2024-25.
House prices have risen by double digits over the past year in Brisbane, Adelaide and Perth, despite 13 Reserve Bank interest rate rises in 2022 and 2023.
In Sydney, where the median house price is $1.474 million, only people earning $227,000 or more, among the top 2.3 percent of earners, can afford to buy a typical home on their own.
Adding to the housing crisis, only 158,752 new homes were started in the year to June, the lowest figure in 12 years. Nearly 3,000 construction companies also went bankrupt in the last financial year, struggling with high interest rates.
Top auctioneer Tom Panos (pictured) says immigration is to blame for Australia’s housing crisis
In the year to March, a near-record 509,800 net migrants moved to Australia, thanks to a huge influx of international students during a rental crisis.
Panos said that while high interest rates and expensive building materials have already made it impossible for many developers to turn a profit, there is another issue the government must address.
‘Get rid of the bureaucracy. Let’s get rid of the bureaucracy involved,’ he said.
‘Promoters have stayed on the sidelines in recent years. They will not build.
He also blamed local councils, urging them to meet quotas for new housing developments.
“Town councils should be punished if they do not meet the various quotas to have ‘X’ amount of new properties in their areas,” he said.
“They can’t just sit there, they need to have KPIs and if those targets aren’t met, the state government can try to take away some of their powers.”
Responding to calls to abolish negative gearing for real estate investors – a tax incentive that allows investors to offset losses on rental properties against their taxable income – Panos argued that eliminating it would shrink the rental market and boost rents even further. further.
“The government needs investors because investors provide accommodation to tenants,” he said.
‘If they got rid of negative gearing, there would be a lot of rental properties leaving the market.
‘And if a lot of rental properties leave the market, there will be fewer properties for renters to choose from.
“And when there are fewer properties for tenants to choose from, rents start to skyrocket again.”
He explained that real estate investors are usually ordinary people, such as teachers and office workers, who are simply trying to ensure the financial security of their families.
“67 percent have taxable income less than $100,000 a year,” he explained.
If negative gearing were abolished, he warned that many of these investors would sell their properties, leaving fewer homes available for tenants.
“It’s not rocket science to calculate that the fewer properties available, the more they will sell for when you rent them out,” he said.
He also disputed the idea that abolishing negative gearing would free up homes for first-time buyers.
“The reality is that renters typically don’t have access to $50,000 to $80,000 to put down a deposit on a house,” he said.
Contrary to popular belief on social media, Panos stated that real estate agents are not to blame for the housing crisis.
Contrary to popular belief on social media, Panos said real estate agents are not to blame for the housing crisis.
“Real estate agents don’t have as much power to control the market,” he said.
‘They do not control the supply of housing. They do not control vacancy rates with tenants.
Panos said that if he really wanted to make money and help the real estate industry, he would not advocate for negative leverage to stay.
“If it were abolished, the real estate sector would benefit from all the homes that came on the market and were sold because the agents are paid for the transactions,” he said.