The new census data released on Tuesday should infuriate young Australians because it shows definitively how the housing market is being rigged against them.
It dispels for good the myth that a shortage of dwellings is what’s causing house prices to rocket beyond their reach.
The key myth-busting statistic is the average number of people per dwelling, which has not budged an inch in the five years since the last census. It’s staying at 2.6 which is where it was back in 2000 well before the house price boom began.
Breaking down that number, the census shows the number of occupied dwellings increased by 6.8 per cent over five years, which is less than population growth over the same period: 8.8 per cent.
However, the number of unoccupied dwellings grew at 11.3 per cent over five years. That equates to 105,000 more empty dwellings since 2011.
Those numbers explain the apparent paradox of ‘people per dwelling’ remaining static, while renters and home buyers experience a tightening market.
And it is getting tighter, as shown by the rental data. Median rents increased by 17.5 per cent over the period, outstripping average income growth of 13.7 per cent over the same period.
That pushed more people into ‘rental stress’, defined as requiring them to spend more than 30 per cent of their disposable income on rent. In 2011 the proportion was 10.4 per cent, but that has now risen to 11.5 per cent.
So the dwellings are there, but either not on the market or increasingly unaffordable if they are.
What’s maddening about those two problems is that they are caused by politicians, not ‘the market’ as the pollies always try to pretend.
There are two categories of market participants that have led to this situation.
One is overseas property investors, dominated by buyers from mainland China. They are permitted to buy only new dwellings – a rule that is supposed to stimulate housing supply and put downward pressure on prices.
In reality, there are two major exemptions. They can buy homes for their adult children to live in during periods of study in Australia, and, more recently, to house children as young as six who enrol in Australian primary schools.
But the investors who are leaving properties vacant aren’t interested in accessing education. They buy off-the-plan apartments as a store of wealth, much like giant gold bars.
If China suffers an economic or geopolitical collapse, which many commentators think likely, some of their fortune will be sitting in high-rise towers in Sydney, Melbourne or Brisbane.
The second class of market participants operating in a decidedly non-free-market way are local investors seeking to minimise tax through negative gearing and profit from the 50 per cent discount that applies to any capital gains they make.
Those investors are subsidised by other taxpayers to outbid would-be owner-occupiers.
Over time, the toxic combination of negative gearing and the capital gains tax discount have returned tens of billions of dollars to generally older, wealthier Australians, thereby increasing the tax bills of younger Australians.
Oh yes, and pushing property prices way out of reach.
That is turning younger Australians into a generation of renters. Tuesday’s census figures confirm this ongoing trend, with the percentage of Australians renting rising from 29.6 to 31 per cent since 2011.
Put together, these numbers are absurd, inequitable, and a drag on the economy because of the ever-increasing proportion of wages being handed by young Australia to the bank-share-owning and cash-deposit-holding older Australians.
If young Australians weren’t furious before the census data came out, they should be now.