So good that only the rich apply

Actually, houses are such a good investment, why don’t I invest in more than one? I have to pay income tax when I sell, but this time I get a tax deduction on the mortgage interest I pay.

And of course, as a homeowner with a big investment, I’ll make sure the council knows how opposed I am to people building those awful high-rises somewhere near my house.

Watch what’s happening? The more advantages we attach to home ownership and the more people want to own a house or three, the more they increase the price of houses. That makes the homeowners’ merry-go-round an increasingly better investment, but all the more difficult for others to climb aboard.

The more we favor homeowners, the more we disadvantage tenants. The more we encourage multi-home ownership by those who can afford it—which most rich countries have long since stopped doing—the more unaffordable buying your first home becomes.

But do not worry. I just give mine children a head start in putting together a deposit. Of course, this only keeps house prices high and makes those children without wealthy parents worse off. Difficult.

The other thing it does is divide Australia more sharply by making home ownership something only the wealthy can afford.

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Why aren’t the politicians doing anything about it? Because that would mean reducing the privileges of existing homeowners, who would fight all the way for it, led by real estate agents and developers.

There has always been a minority of lifelong renters, but since homeownership is the national obsession that it is, we’ve never worried about them. Tenants have a lot more legal rights in other rich countries than here, but that never bothered us. Tenants, we like to assume, are simply young people on their way to their first home.

This was never true, but it becomes false as each count goes on. In a keynote speech last week, Brendan Coates of the Grattan Institute said that “home ownership is falling rapidly, especially among the young and the poor”.

In the 40 years to 2021, home ownership among 25- to 34-year-olds fell from more than 60 percent to 40 percent. Among the lowest paid 40 percent of that age group, it has more than halved, from 67 percent to 28 percent, Coates said.

Last year’s census shows that we are also seeing an accelerating decline in middle-income households, with a noticeable decline in home ownership across all ages, including parent middle-income households.

The proportion of people retiring who have never been able to afford a home is increasing, as is the proportion of homeowners retiring with unpaid home loans.

I wouldn’t like to be in the shoes of the 70-year-old retiree who lives in a small town and who told tenants Victoria she had to work two days a week to pay the ever-rising rent of a granny flat in an old house.

We can continue to ignore the ill-treatment of tenants because they will soon have their own place, or we can take the controversial measures necessary to prevent housing from becoming increasingly unaffordable.

But even if we make all the necessary changes tomorrow, we’d still end up with many more people spending most of their lives as renters. Time we cared about tenants.

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