PASSWORD RESET

Magazine of Socialist Action in Australia

End mortgage and rent stress

Recently released figures have highlighted the desperate situation facing those of us who are struggling to cover the costs of putting a roof over our heads. The property valuation group Demographia revealed last month that the average Melbourne house price rose 8.4% in 2010.

This puts the average house price at $565,000, while average household income is only $63,100. With house prices 7.2 times the annual family income Melbourne has become one of the least affordable cities to live in the English speaking world.

Of course it is the disadvantaged that suffer the most as Australia’s housing crisis gets worse. 41,000 people in Victoria alone are on the public housing waiting list. The average waiting time is 4 years but some have waited up to 18 years in some circumstances. The longest wait on record for an individual was an appalling 226 months – just under 19 years!

Many young people entering the housing market are forced to face the reality of never being able to afford to buy their own home. Tim Lawless, Research Director of RP Data has stated “Affordability is quite a pressing issue… If you look at the broader market, interest rates and housing prices provide a fairly challenging scenario for new buyers into the housing market.” This “fairly challenging scenario” is in fact a major burden on people’s lives.

Unfortunately renting a property is often no more affordable. The average rental property is often out of reach for low income households. Figures from the Tenants Union of Victoria show that the average rental property often consumes more than 30% of household income. Some households are spending up to half their income on rent.

“As a result, low income households face the choice of either paying unaffordable rents or forgoing basic necessities. Many are forced to rent substandard or insecure forms of rental housing such as rooming or boarding houses” Tenants Union CEO Mark O’Brien said.

The Socialist Party believes that housing should be a basic right and not a luxury. One way to address the problem of the lack of affordable housing would be to massively increase investment in the expansion of public housing. This would not only reduce the waiting list but would create thousands of jobs and help push down the prices of private rents.

In contrast most governments are reducing investment in public housing and leaving the building of new homes in the hands of private developers whose only concern is making profits. A number of government policies are also encouraging speculation in the housing market which is also pushing up prices and rents.

One such policy is the tax treatment known as negative gearing. This scam is used by many landlords to avoid paying tax on property. If it was stopped this alone would free up over $4 billion which could be used to build affordable public housing.

These are just some of the first steps that need to be taken to address the housing crisis in Australia. Only by ending the rule of profit and introducing a democratic plan to build public housing under public control will we be able to ensure access to affordable and quality housing for all.

The Socialist Party stands for:

– Massive investment into public housing to reduce the waiting lists and create jobs
– Resident control of housing estates to ensure the adequate provision of homes and services
– Legislation to cap private rents at 20% of income and ensure landlords provide quality accommodation
– Put a stop to gambling on the housing market. End negative gearing and other forms of speculation
– Affordable housing for all as a basic right.