WHO HATES PROPERTY INVESTORS?

The SMH’s senior economics writer Jessica Irvine sets out today how, only two years after purchasing her first home and thanks to sky rocketing property prices, she now finds herself with enough equity to borrow and purchase an investment property: “Quite why I’m allowed to enjoy all this $400,000 gain – for which I did not life a finger – entirely free of tax, I’m not sure. But I am – such is the state of Australia’s utterly nonsensical and amoral property market…I’ve just re-read this column from the perspective of a first home buyer, and I agree: I’d hate me, too. I hope that at least by being honest, I can bring some of the inequities of our system to light.”

On 28 May 2021 the Australian Taxation Office raised the Luxury Car Tax (LCT) threshold to $79,659 compared to $77,565 previously. The LCT is imposed at the rate of 33% on the amount above the luxury car threshold. The questions therefore must be…if a tax is levied on luxury cars, why isn’t a tax levied on second, third, fourth-and-more investment homes? Why do our legislators continue to permit and indeed encourage massive profiteering from housing? Oh, of course, because so very many of them own investment properties themselves.

A ‘sponsored’ advert dropped into our social media feed today from North Coast Lifestyle Mullumbimby. “Unbelievable Value/Studio Apartment – 72 m2 for $550,000-$600,000.” Clicking the link to their website revealed six homes currently available under residential tenancies, along with 54 holiday rentals for out-of-town ‘blow ins’.

Jindabyne - The Snowy Mountains town where median house prices are soaring – is featured today in Domain. “In 2014, the median house price was $360,000. In the 12 months to June 2021, it was more than double that figure at $765,000…Jindabyne’s latest boom has pushed prices beyond the reach of many locals – the rents are astronomical here.” Agents featured in Domain’s article include:

First National – five homes* available for lease (* three of the five are for summer lease only), and 105 holiday rentals
Jindabyne Real Estate – no homes available for lease, 129 holiday rentals
Henley Property – five homes available for lease, and 43 holiday rentals

Jindabyne is of course where Joan Bird (former board member Australian Short Term rental Accommodation) is located. Her agency:-

Ray White – no homes available for lease, 23 holiday rentals

While we are still waiting for NSW Planning Minister Rob Stokes to provide an update on the number of homes lost across our Sate to holiday rentals – 216,000 short-term holiday lets in 2014 – and the economic impacts on NSW, a study by McGill University in Montreal demonstrates how Airbnb and increased gentrification has added to the affordable housing gap.

There are officially no figures nor mechanism to show how the State Government’s ‘Holiday Rental Code of Conduct’ is or is not working. As per Hansard, the ‘Code’ was: “…concocted by the Minister for Innovation and Better Regulation and by the Minister for Planning. The bill presents a vague framework backed by insufficient evidence. Some have referred to it as a dog's breakfast. It has been cobbled together in a desperate attempt to get something through the party room after three years of sitting on the matter. But, most concerning, it is a desperate attempt to kick this issue into the long grass and hope that short-term holiday letting disappears for the next nine months. The bill is another "trust us" bill: short on detail and ambiguous on clarity. Both those Ministers would get a big fail for the final product in other circumstances; it is a failure compared with the original brief of setting out balance, flexibility and clarity for the broader community.”

Of course, in terms of seeking application of the Holiday Rental Code of Conduct, a common law claim of nuisance can be made against any NSW resident who attempts to obtain proof of disturbance or worse from a neighbouring short-term rental. And no State Minister will confirm if NSW Police can be relied upon to send out officers to break up parties – large or small - where clients are drunk, under the influence of drugs, or armed with knives or other weapons. And US Media has multiple reports of Airbnb Users Turning Apartments into Sex Brothels, AirBuy&Bone: Escorts Love Airbnb Too, Hookers turning Airbnb apartments into brothels…

In the US, groups of anonymous buyers are buying up residential homes as time shares and gifting out stays for bachelor parties, wine tasting and…Pacaso, “the modern way to buy and own a second home”, has penetrated many a residential community and residents are pushing back. The Australian Federal Government has a platform – moneysmart.gov.au – that helps investors navigate time shares, promoting the further monetisation of residential housing. “Take control of your money, building a better life” says our Government.