The key to housing wastage

With increased public service in Tarneit comes an increased vacancy rate of 5.6%.

Developers for the last 20 years have cried out for more land supply. The recent Englobo report found developers have 14.9 years of land supply nationally. Their cries have been answered. But developers have figured out a scientific system of 'demand assessment' to justify 'staged releases' of their thousands of acres. Property is effectively drip fed to the market to ensure prices continue to head upwards. The ineffective vacancy rate ignores these speculative actions.

More land supply is code for re-zoning windfalls. The golden bureaucratic pen tick had property options spruiker Mark Rolston jumping for joy at his recent Melbourne seminar - 'I just can't believe how much money you can make out of re-zoning!'

The ACCC informs that there is no evidence of price manipulation from what developers call 'staged releases'. Real estate adverts gush at how grateful we should be that 'staged release 43 is now open', as if some fairy waved her wand and now there COULD be a place for you on this planet.

Dennis Family Homes is up to stage 128 at their Manor Lakes development and they have only just begun.

From the sprawl to the heart of Melbourne's famous cultural hotspots, housing wastage exists. Have you ever made a hipster shed tears into their latte? Mention the 2,422 vacant properties surrounding the coolio mecca of Brunswick and see how you go. Everyone wants to live there but investors have 23 advantages over and above the first home owner to leverage more credit from their friendly banker.

Compounding concerns, the Australia-China free trade agreement just announced a $1bn threshold for property investment, up from $250m. Many nations now enjoy such a threshold, ensuring the victory of mobile speculative capital is likely over local workers wanting a place to call home.

The best and fairest way to address the lack of sovereignty we face from the invisible hand of the speculative elite is to replace the $36,000 Stamp Duty impost with a holding charge on land. At present, Victorian holding charges (Land Taxes and Council rates) are barely $1,800 vs $18,000 in rent or $60,000 in capital gains. Such low holding charges encourage speculative vacancies.

Any politician serious about housing affordability must look at how this housing supply crisis is being held to ransom by property speculators. Vacant land and housing must be included in any vacancy finding to give a holistic analysis of where we stand as a community compared to the speculative elite. This important first step can then alert the locked out generations as to why holding charges are seen by economists as world's best practice for taxation, infrastructure financing and housing affordability.