No Noddy, you and Big Ears won’t solve housing with a tiny house

Many years ago (2007), when I prepared a report “Boulevard of Broken Dreams – the Future of Housing Affordability in Australia” for the PCA – that cost was around a third. It’s now half. No wonder things are getting worse. (If you want a copy, I can email you one just let me know).

Even more concerning is the equity argument. Buyers of an entry level new house and land package on the urban fringe – our archetypal young family of first home buyers – will pay a great deal more in embedded taxes and charges on their new home than someone buying a multi-million dollar established home in, for example, the privileged inner-city market of New Farm (or Balmain for a Sydney equivalent). Our young buyers are buying into an area where the infrastructure is largely still a promise of things to come. Our New Farm buyers are buying into a market where other taxpayers have generously funded the extensive hard and social infrastructure which has made the suburb so desirable, but they pay no infrastructure levy, no GST, and no other regulatory or compliance costs. They may grumble about stamp duty but it is far less than the combined tax bill faced by our young family.

So, the solution to this mess of regulation and tax, which has made new land for housing a complex and costly exercise, is to suggest building a tiny house of less than 40 square metres on land which costs over $150,000 to service, let alone the cost of the land itself?

Sorry Noddy and Big Ears, it’s a nice idea, but we’re in the real world now.