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<h2>EXPERT INSIGHT</h2>

The most pointless discussion in real estate is the one about housing affordability. It&rsquo;s pointless, not because it lacks importance or potential solutions, but because the conversation never focuses on the real issues.

Australia has been debating affordability for decades. The media discussion that&rsquo;s happening in 2021 is the same one that occurred last year, and five years ago, and 20 years ago. Go back in time as far as you like and you&rsquo;ll find acres of newsprint describing how young Australians are priced out of the market and doomed to a lifetime of renting.&nbsp;(Ironically, the past 12 months has seen record activity from first-home buyers.) But if you examine media coverage of the affordability issue over the past 10, 20 or 30 years, you will struggle to find any reference to the root causes.

That&rsquo;s why the debate is pointless. If you&rsquo;re not going to discuss the real issues, why bother? The debate is generally driven by politicians skilled at diverting blame and the reports are written by journalists who haven&rsquo;t got a clue.

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Recent decisions by the State Government in Victoria encapsulate why we have expensive housing and difficult issues for first-home buyers. They hiked taxes on investors and reduced grants for FHBs &ndash; thereby making affordability worse at both ends of the equation. More expensive housing and less government assistance. Brilliant.

But Daniel Andrews and Tim Pallas would swear they cared more about FHBs and housing affordability than anyone else in the nation.

This is standard fare from our politicians. When Gladys Berejiklian became Premier of NSW in early 2017, she used her first press conference to claim that improving affordability was top of her priorities. Four years later, most decisions by her government impacting on affordability have made it worse, not better.

It&rsquo;s a similar story with deadly Dan Andrews. He would have us believe that he lies awake at night fretting over the plight of young housing hopefuls, but in so many ways his government has made affordability worse.

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The decision by his Government to hike land tax and stamp duty on investor owners continues the age-old problem of politicians using the housing industry as a cash cow - and thereby making housing more expensive to create.

The problem of affordability can be summarised like this: it&#39;s caused by politicians at all three levels of government&nbsp;milking the housing industry for revenue. Local government does it and the Federal Government does it, but by far the worst are state governments.

Every time a state government&nbsp;needs some extra revenue, they slug developers and investors. They believe there&amp;#39;s little electoral damage&nbsp;in doing that, but ultimately it&amp;#39;s the home-buyers who pay,&nbsp;including first-home buyers.

Australia has a rental shortage crisis and politicians should be encouraging investors. But they continue to discourage investors - hence the ultra-low vacancies and rising rentals in most locations. The State Government in Victoria has made the situation worse. A memorable episode of the iconic British comedy Yes Minister involved the quintessential public servant Sir Humphrey Appleby lecturing about how governments present the appearance of caring about an issue while changing nothing.

You call for an inquiry. Let the inquiry run for a couple of years. Then recommend a Royal Commission. Another couple of years gets chewed up. At the end of the process, identify an unpopular minority to blame for the problem and scapegoat them. Nothing has changed but you&rsquo;ve created the appearance of serious action.

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It sounds farcical but Australia actually did this with housing affordability. There was a series of Federal Government inquiries and at the end of a very low process, devious politicians decided to scapegoat foreign investors as the cause of the affordability problem.

That gave politicians a licence to slug foreign investors with a series of new charges, all under the guise of improving affordability. It was an incredibly cynical exercise - a revenue-raising measure, pure and simple &ndash; and nothing changed about affordability because foreign investors were never the problem.

At the last Federal Election, the Labor Party under Bill Shorten sought to save money in the Budget (they fully expected to win) by proposing to scrap negative gearing and increase capital gains tax &ndash; but tried to dress it up as a measure to improve housing affordability. When asked &ldquo;Does this mean that the value of homes will fall under your policies?&rdquo;, Shorten claimed that it did not. The value of homes would not fall. This begged a follow-up question: &ldquo;How, then, will affordability improve?&rdquo;

Labor front-bencher Tanya Plibersek, in the lead-up to the 2019 election, claimed that the typical property investor in Australia owned 15 or 20 properties. Given that the official data shows that the typical investor owns one or two properties, this was an outrageous lie. But quite deliberate and calculated.

Federal Labor (and many sections of the media) generally portrayed property investment as something akin to a criminal activity, thereby scaring off investors already discouraged by APRA measures.

The outcome is a national rental shortage crisis.

Yes Minister was a documentary, not a comedy. And we will never resolve the housing affordability issue until we understand that the politicians are the problem.

Daniel Andrews and Tim Pallas would swear they cared more about FHBs and housing affordability than anyone else in the nation, standard politician bunk

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