Top auctioneer Tom Panos says the combination of mass immigration and council red tape is causing Australia’s housing crisis.
While Mr Panos supported immigration to Australia, he said homes are not being built anywhere near fast enough to keep up with demand, and it is the undersupply that is sending prices to staggering levels.
‘We’ve allowed massive migration – which is fantastic – however, no-one actually sat down and thought where will these people live,’ he told Daily Mail Australia.
He said Australia was already struggling with housing its existing residents and then the giant spike in immigration transformed a problem into a crisis.
In the year to March, a near-record 509,800 migrants on a net basis moved to Australia, thanks to a big influx of international students; a large number of which get jobs and never leave.
That figure was significantly higher than Treasury’s Budget forecast of 395,000 for the year to June 2024, calling into question the government’s forecast of immigration levels slowing dramatically to 260,000 in 2024-25.
House prices have surged by double-digit figures during the past year in Brisbane, Adelaide and Perth, despite the Reserve Bank’s 13 interest rate rises in 2022 and 2023.
In Sydney, where the median house price is $1.474 million, only people earning $227,000 or more, among the top 2.3 per cent of earners, can afford to buy a typical home on their own.
Only 158,752 new homes were started in the year to June, the lowest figure in 12 years. Nearly 3,000 building companies also went bankrupt in the past financial year as the cost of materials and sub-contractors soared.
Top auctioneer Tom Panos (pictured) says that immigration is to blame for Australia’s housing crisis
In the year to March, a near-record 509,800 migrants on a net basis moved to Australia, thanks to a big influx of international students during a rental crisis
Mr Panos said it is not just the economics of supply and demand that have created the housing crisis but also local councils rejecting development applications.
‘Get rid of the red tape. Get rid of the bureaucracy involved,’ he said.
‘Developers have stayed on the sidelines in recent years. They won’t build.’
Local councils are sensitive to residents who do not want high-density homes in their neighbourhoods as they can drive down property values as well as the population growth putting stress on local infrastructure and services.
‘Local councils need to get punished if they don’t meet the various quotas to have ‘X’ amount of new properties put into their areas,’ Mr Panos said.
‘They can’t just sit there, they need to have KPIs and if those targets are not met, the state government can look at taking away some of their powers.’
As bad as the rental market is now, with precious few vacancies and therefore sky high rents, Mr Panos fears it will get worse if negative gearing tax breaks are taken away from owners of investment properties.
‘The government needs investors because investors are providing the accommodation for tenants,’ he said.
‘If they were to get rid of negative gearing there would be a heap of rental properties that would leave the market.
‘And if a heap of rental properties leave the market, there’s less properties for tenants to pick from.
‘And when there’s less properties for tenants to pick from, rents start soaring again.’
He explained that many landlords are far from rich, and are just trying to secure financial security for their families.
‘Sixty-seven per cent have a taxable income of under $100,000 a year,’ he explained.
If negative gearing were abolished, he warned many of these investors would sell their properties, leaving fewer homes available for tenants.
‘It’s not rocket science to work out the fewer properties that are available, the more they go for when you rent them out,’ he said.
He also disputed the idea that a sell-off of investment homes would free up homes for first-time buyers.
‘The reality is tenants don’t normally have access to $50,000-$80,000 to go put down a deposit on a home,’ he said.
Contrary to popular belief on social media, Panos said real estate agents aren’t to blame for the housing crisis
Contrary to popular belief on social media, Panos said real estate agents are not to blame for the housing crisis.
‘Real estate agents don’t have that much power to control the market,’ he said.
‘They don’t control housing supply. They don’t control vacancy rates with tenants.’
Mr Panos said if his intent was to benefit the real estate industry, he would not be advocating for negative gearing to stay.
‘If it was abolished, the real estate industry would be benefiting from all the homes coming on the market and being sold because agents get paid for the transactions,’ he said.