1. The ratio of house prices to incomes is one of the highest in the world.
2. Superannuation funds in Australia receive favourable tax incentives which make investing in housing a good long-term strategy.
3. All working Australians have mandatory superannuation payments made by their employers and it is this near-trillion dollar lump of money that is investing in housing.
4. Australians at an auction attempting to buy a house can literally be bidding against their own superannuation money to buy a house.
5. The last attempt to cut these favourable tax incentives failed due to the weight of superannuation funds that has accumulated over the years. Politicians could not cut the tax incentives as all superannuation funds would take a sharp drop at the news. House prices would also drop on the news and many Australians would find themselves paying off a loan worth far more than their home.
6. In Victoria, the government introduced a plan which limited the sprawl of Melbourne, calling for higher density housing to be built throughout the city, connected by train lines and other forms of public transport – a plan for the future of Melbourne with a much higher population than today.
7. Most efforts to build higher density housing across Melbourne has failed as local resident groups use local laws and councils to block development. The richer the suburb the lower the success rate of new development. This has the result of pushing development to the poorest suburbs which lack the necessary infrastructure to accommodate rising populations.
8. As a result of the incredibly high ratio of housing prices to incomes, Melbourne has a rental vacancy rate that has dropped below 1%. Like a large game of musical chairs where almost everyone has sat down, the lack of rental properties means that even full-time employed people are at risk of becoming homeless if their landlord decides to end their tenancy. This has also led to other issues such as under-the-table “auctions” for renters to bid up the rent against each other.
9. Lack of housing has contributed to skyrocketing rents which, despite even the high price of housing in Melbourne, mean that renters are sometimes paying close to a standard mortgage payment in order to rent a home.
10. Despite large amounts of land being available for building (mostly held by developers) the Government has failed to pass any legislation forbidding hording of such land or enacting any tax to encourage release of land. As a result we have low land supply, low density housing only, low rental availability, high housing prices and hundreds of millions of dollars invested via superannuation to ensure the situation will not change.