It's a matter of when, not if, the Reserve Bank will take the knife to interest rates, but first home buyers may only see a fleeting, and possibly minuscule, improvement in affordability.
Rate cuts are in the wind and, while they’ll certainly improve housing affordability …
This kind of neoliberal rhetoric is what needs to end. Rate cuts DO NOT increase housing affordability; they do the opposite. They make it easiest for the wealthiest to borrow even more cash, and buy another property, which increases demand, drives up the price, and ultimately reduces affordability. The “benefits” to non-owners grows more and more fleeting EVERY SINGLE TIME.
It’s the same deal with the “first home buyer” schemes. I have yet to see one that isn’t neoliberal economics marketed to sound like it’s a benefit to the working class, while it does little more to drive up prices at the bottom end of the market, again reducing housing affordability.
The only things that will stop the cycle is all of the things that will literally reduce the cost of housing, and is bad for every single homeowner/investor who doesn’t plan on holding onto it for the long-term — hard limits on the volume of property any individual can own (like 2, MAX), completely banning any company from owning residential property, a massive investment in public, at-cost housing, and a dozen other significant regulations that transform the entire concept of housing from being an “investment”, to being for a basic human right, and necessity for both physical and mental health.
Did you read the whole article? It is essentially saying what you are saying.
And if we’ve learned anything from the past four decades, cheaper loans have only helped drive prices higher.
… which will make it marginally cheaper to borrow and hence temporarily improve affordability. Unfortunately, that could be enough to lure in more buyers, which will push prices higher
Given we’re not building anywhere near enough dwellings to house our rapidly expanding population, real estate is likely to continue rising. Add to that the tax incentives that favour investors, and any interest rate cuts are likely to only deliver a temporary respite to those looking for a first home.
But that rising wealth is likely to be concentrated in ever-fewer hands in the future.
This kind of neoliberal rhetoric is what needs to end. Rate cuts DO NOT increase housing affordability; they do the opposite. They make it easiest for the wealthiest to borrow even more cash, and buy another property, which increases demand, drives up the price, and ultimately reduces affordability. The “benefits” to non-owners grows more and more fleeting EVERY SINGLE TIME.
It’s the same deal with the “first home buyer” schemes. I have yet to see one that isn’t neoliberal economics marketed to sound like it’s a benefit to the working class, while it does little more to drive up prices at the bottom end of the market, again reducing housing affordability.
The only things that will stop the cycle is all of the things that will literally reduce the cost of housing, and is bad for every single homeowner/investor who doesn’t plan on holding onto it for the long-term — hard limits on the volume of property any individual can own (like 2, MAX), completely banning any company from owning residential property, a massive investment in public, at-cost housing, and a dozen other significant regulations that transform the entire concept of housing from being an “investment”, to being for a basic human right, and necessity for both physical and mental health.
Did you read the whole article? It is essentially saying what you are saying.