Housing affordability

I caught the end of Insight this week. They were discussing housing affordability (jumping on the bandwagon), as as I only caught the end, it was quite interesting as I missed most of the posturing and retoric.

Some of the interesting points raised included:

• Should owners pay taxes when they exit the housing market, rather than on entry?
• Should Australia move towards long-term rentals?
• Should changes to the taxation system include means testing the first home owners grant (which I think should be a dual means test - both on the income of people applying and the cost of the property being purchased - because let's face it once you are buying a$700 000 house $7 000 is negligable)? Other changes could include phasing out negative gearing.

Something that occured to me as I was watching was, is the real question that Australians see housing as a cash cow - and hence the need to "get into the market" is driven by the perception that they are missing out on easy cash growth as well as housing stability?

Complex questions and I think in some ways the media is responsible for some of the hype surrounding the topic. I do think that our houses are too big, and that we want too much for too little. We are inflexible in what we are willing to adapt to. But to change people's perceptions will take time - and this seems unlikely to sit well within the political sphere, or the current media reporting processes.