1 00:00:03,640 --> 00:00:05,760 Speaker 1: Welcome to Ask a Fear and Greed, where we answer 2 00:00:05,880 --> 00:00:10,000 Speaker 1: questions about business, investing, economics, politics and more. I'm Michael 3 00:00:10,000 --> 00:00:14,160 Speaker 1: Thompson and hello Sean Aleman. Hello Michael, A cynical one 4 00:00:14,200 --> 00:00:18,520 Speaker 1: for you today, Sean, your favorite kind. Here's the question, 5 00:00:19,280 --> 00:00:23,799 Speaker 1: why don't governments just build more homes if supply is 6 00:00:23,840 --> 00:00:26,920 Speaker 1: the problem? So we're clearly talking about the housing crisis 7 00:00:26,960 --> 00:00:29,280 Speaker 1: here and the fact that we don't have enough houses 8 00:00:29,280 --> 00:00:31,400 Speaker 1: to go around, and the prices are going up and 9 00:00:31,480 --> 00:00:33,600 Speaker 1: people are finding it hard to get into the market 10 00:00:33,600 --> 00:00:36,159 Speaker 1: in the first place. And if supplies the problem, then 11 00:00:36,159 --> 00:00:38,360 Speaker 1: why don't governments just build more homes? 12 00:00:39,320 --> 00:00:42,480 Speaker 2: Well, it's actually not a cynical question because that could 13 00:00:42,479 --> 00:00:47,360 Speaker 2: be an answer. So Australia, we've got about three hundred 14 00:00:47,360 --> 00:00:52,000 Speaker 2: and fifty thousand social housing dwellings is how they measure it, Yep, 15 00:00:52,040 --> 00:00:54,000 Speaker 2: that's about three point eight three point nine percent of 16 00:00:54,000 --> 00:00:59,520 Speaker 2: all households are social housing in Australia. Now that's there's 17 00:00:59,560 --> 00:01:02,160 Speaker 2: almost about half that number of gen so one hundred 18 00:01:02,160 --> 00:01:05,440 Speaker 2: and sixty five thousand applicants on the waiting list, So 19 00:01:06,000 --> 00:01:09,720 Speaker 2: the waiting list is huge at three point eight percent, 20 00:01:10,480 --> 00:01:13,400 Speaker 2: that's actually about twenty years ago that number was closer 21 00:01:13,400 --> 00:01:18,080 Speaker 2: to six percent. So what you find in Australia is 22 00:01:18,440 --> 00:01:23,240 Speaker 2: that we have reduced social housing. Now I suppose we 23 00:01:23,280 --> 00:01:24,840 Speaker 2: should actually just take it a little time out here. 24 00:01:24,880 --> 00:01:27,920 Speaker 2: What is social housing? We're talking about community housing, public housing. 25 00:01:28,160 --> 00:01:31,640 Speaker 2: It's owned and managed by government or sometimes it's not 26 00:01:31,640 --> 00:01:37,640 Speaker 2: for profit organizations. Rents are almost always below market rates. 27 00:01:37,640 --> 00:01:42,360 Speaker 2: Often they're based on a percentage of tenants income. Supposedly 28 00:01:42,440 --> 00:01:46,800 Speaker 2: it's allocated based on need rather than competitive market. So 29 00:01:47,080 --> 00:01:51,040 Speaker 2: the question comes down to why doesn't the government build 30 00:01:51,040 --> 00:01:53,480 Speaker 2: more of that type of housing when we need it? 31 00:01:53,720 --> 00:01:59,400 Speaker 2: And I actually do think that's a fair question. Australia 32 00:01:59,440 --> 00:02:02,520 Speaker 2: home has been a really big thing and the great 33 00:02:02,520 --> 00:02:04,880 Speaker 2: Australian dream, and in some ways that plays into it 34 00:02:04,920 --> 00:02:07,960 Speaker 2: a little bit. And so since the war, since World 35 00:02:07,960 --> 00:02:12,919 Speaker 2: War II, we have reduced public housing enormously and you 36 00:02:13,120 --> 00:02:17,640 Speaker 2: kind of allowed the private sector to provide enough housing 37 00:02:17,720 --> 00:02:21,800 Speaker 2: that it hasn't isn't necessarily working right now. There have 38 00:02:21,880 --> 00:02:25,000 Speaker 2: been other times though, where there's been plenty of supplying 39 00:02:25,040 --> 00:02:27,440 Speaker 2: the market and really not enough demand and people who 40 00:02:27,440 --> 00:02:31,080 Speaker 2: have got investment homes haven't been able to actually find tenants, 41 00:02:31,639 --> 00:02:35,920 Speaker 2: and prices have fallen. So it is very sickly coal. 42 00:02:36,520 --> 00:02:42,880 Speaker 1: Okay, but I suppose this is the question. Wasn't cynical 43 00:02:43,040 --> 00:02:46,400 Speaker 1: enough allow me to be cynical for you? Then what 44 00:02:46,520 --> 00:02:49,519 Speaker 1: about then when we hear say the government talking about 45 00:02:49,880 --> 00:02:53,120 Speaker 1: they will build one point two million new homes in 46 00:02:53,240 --> 00:02:56,919 Speaker 1: five years, for instance, and which is a very lofty tagle, 47 00:02:56,960 --> 00:02:59,880 Speaker 1: which sits outside essentially of social housing, and that is 48 00:03:00,080 --> 00:03:06,480 Speaker 1: essentially clearing the way right and making it possible and 49 00:03:06,560 --> 00:03:10,600 Speaker 1: opening up land and all of these things to allow 50 00:03:11,120 --> 00:03:14,520 Speaker 1: more properties to be built, new stock to come into 51 00:03:14,560 --> 00:03:18,240 Speaker 1: the market, to increase supply. Is part of the challenge here, 52 00:03:18,840 --> 00:03:21,079 Speaker 1: the fact that even with that one point two million 53 00:03:21,120 --> 00:03:24,560 Speaker 1: and this kind of plan to achieve that by I 54 00:03:24,600 --> 00:03:27,560 Speaker 1: think it's twenty twenty nine going to do it, they're 55 00:03:27,600 --> 00:03:30,480 Speaker 1: still going to come up short. So is there an 56 00:03:30,480 --> 00:03:33,040 Speaker 1: element of yes, the government could in theory just build 57 00:03:33,080 --> 00:03:35,280 Speaker 1: more houses or make it possible for people to build 58 00:03:35,320 --> 00:03:37,240 Speaker 1: more houses, but they're just not able to because there's 59 00:03:37,240 --> 00:03:40,120 Speaker 1: too many other forces, the availability of tradees to actually 60 00:03:40,200 --> 00:03:42,560 Speaker 1: do it. The hold ups when you get to kind 61 00:03:42,600 --> 00:03:46,000 Speaker 1: of local government and state government and zoning issues that 62 00:03:46,080 --> 00:03:50,600 Speaker 1: there's just too many other problems preventing these housing targets 63 00:03:50,640 --> 00:03:51,360 Speaker 1: from being met. 64 00:03:52,160 --> 00:03:56,440 Speaker 2: Yes, So the Albanezy government's national housing targets I think 65 00:03:56,480 --> 00:03:59,920 Speaker 2: are a good thing where they and at the moment 66 00:04:00,120 --> 00:04:02,120 Speaker 2: need to be running at two forty thousand a year 67 00:04:02,320 --> 00:04:04,520 Speaker 2: and I think building approvals are running about one eighty 68 00:04:04,560 --> 00:04:07,320 Speaker 2: thousand a year, so we're about twenty five percent below 69 00:04:07,480 --> 00:04:11,640 Speaker 2: where we need to be. What the government government needs 70 00:04:11,680 --> 00:04:16,440 Speaker 2: to do is train more tradees, reach to address your issues, 71 00:04:17,240 --> 00:04:22,520 Speaker 2: make sure local government opens up the ability for organizations 72 00:04:23,480 --> 00:04:27,080 Speaker 2: for land to be developed and rezoned. Make sure banks 73 00:04:27,160 --> 00:04:30,320 Speaker 2: are lending to construction companies that's another big one at 74 00:04:30,360 --> 00:04:34,680 Speaker 2: the moment. And obviously find land that can be used 75 00:04:35,120 --> 00:04:40,480 Speaker 2: and zoned for residential housing. That to me is what 76 00:04:40,560 --> 00:04:43,960 Speaker 2: government should be doing. And then the market takes over 77 00:04:44,640 --> 00:04:47,360 Speaker 2: and builds those places. So if that was easier, if 78 00:04:47,360 --> 00:04:49,400 Speaker 2: there were trades around and construction companies could be get 79 00:04:49,440 --> 00:04:51,520 Speaker 2: loans from banks and there were sites to do it, 80 00:04:51,720 --> 00:04:53,800 Speaker 2: you get a lot more houses built because there's a 81 00:04:53,839 --> 00:04:56,840 Speaker 2: market for it, so go for it. And you can 82 00:04:56,880 --> 00:04:59,080 Speaker 2: build stuff really quickly. You know, if you're having your 83 00:04:59,080 --> 00:05:01,800 Speaker 2: house knockdown, you build it takes twelve months. So if 84 00:05:01,800 --> 00:05:05,080 Speaker 2: you think that you could build a unit block in 85 00:05:05,240 --> 00:05:08,279 Speaker 2: eighteen months, and that might end up having one hundred 86 00:05:08,400 --> 00:05:12,120 Speaker 2: homes in it. You really could get things going. I 87 00:05:12,160 --> 00:05:16,520 Speaker 2: don't think it's the government's role to build and own 88 00:05:16,560 --> 00:05:22,440 Speaker 2: a lot of homes. Now, some of the equity ideas 89 00:05:22,480 --> 00:05:25,160 Speaker 2: that the government has with first time buyers, that's sort 90 00:05:25,200 --> 00:05:27,000 Speaker 2: of getting into that territory, and I don't think that's 91 00:05:27,000 --> 00:05:29,720 Speaker 2: a bad thing. Like, I think that's kind of the 92 00:05:29,760 --> 00:05:33,839 Speaker 2: government owning some equity and then when the first time 93 00:05:33,880 --> 00:05:36,480 Speaker 2: buyer sells out or they can buy the government out, 94 00:05:36,520 --> 00:05:39,679 Speaker 2: that's kind of sensible. But I don't think the government 95 00:05:39,760 --> 00:05:42,520 Speaker 2: needs to own huge amounts of social housing if we 96 00:05:42,560 --> 00:05:43,200 Speaker 2: can avoid it. 97 00:05:43,720 --> 00:05:46,760 Speaker 1: Okay, all right, So, I mean the question is a 98 00:05:46,800 --> 00:05:48,960 Speaker 1: good one, and the question is actually probably one of 99 00:05:49,000 --> 00:05:50,799 Speaker 1: those ones that if you were to drop that question 100 00:05:51,040 --> 00:05:53,240 Speaker 1: at a dinner party, you're probably going to end up 101 00:05:53,240 --> 00:05:56,200 Speaker 1: with a fairly lively discussion afterwards that hey, the government 102 00:05:56,240 --> 00:05:58,320 Speaker 1: should just build more houses and there you fix the 103 00:05:58,320 --> 00:06:03,080 Speaker 1: housing crisis. It's not as simple, it's not super straightforward, 104 00:06:03,400 --> 00:06:06,000 Speaker 1: but there is actually probably enough in there that would 105 00:06:06,440 --> 00:06:09,440 Speaker 1: smooth the way through, you pave the way to more 106 00:06:09,480 --> 00:06:10,839 Speaker 1: supply coming onto the market. 107 00:06:10,960 --> 00:06:12,760 Speaker 2: Yeah, you'd have so I mean place on in the UK, 108 00:06:12,880 --> 00:06:14,960 Speaker 2: they've got a huge social housing I think they're like 109 00:06:15,040 --> 00:06:20,039 Speaker 2: fifteen or twenty percent social housing. But yeah, I think 110 00:06:20,160 --> 00:06:22,840 Speaker 2: smoothing the way is the best option for government from 111 00:06:22,839 --> 00:06:24,680 Speaker 2: my POINTAE Okay, all right. 112 00:06:24,800 --> 00:06:26,719 Speaker 1: I reckon. That's one of my favorite questions we've had 113 00:06:26,800 --> 00:06:30,000 Speaker 1: in a little while. Actually, it's one of those ones 114 00:06:30,000 --> 00:06:31,799 Speaker 1: that just has a lot of room to debate. 115 00:06:32,120 --> 00:06:35,279 Speaker 2: Yes, yes, take that one to your next dinner party. 116 00:06:35,320 --> 00:06:40,000 Speaker 1: Eh. Yeah, you can see all these invitations for you 117 00:06:40,080 --> 00:06:42,680 Speaker 1: and me dinner parties. Just well listen to that. That's 118 00:06:42,720 --> 00:06:45,520 Speaker 1: them drying up all over the city. All right, Thank 119 00:06:45,520 --> 00:06:46,160 Speaker 1: you very much, Sean. 120 00:06:46,200 --> 00:06:46,800 Speaker 2: Thanks Michael. 121 00:06:47,120 --> 00:06:49,040 Speaker 1: If you've got your own question that you'd like us 122 00:06:49,040 --> 00:06:53,440 Speaker 1: to examine, potentially debate, then fearangreed, dot com, dot au 123 00:06:53,600 --> 00:06:55,840 Speaker 1: send it on through there or any of these social 124 00:06:55,880 --> 00:06:58,800 Speaker 1: media platforms. Just drop us a message and we will 125 00:06:58,839 --> 00:07:01,160 Speaker 1: pop it on the list. Michael Thompson, And that was 126 00:07:01,200 --> 00:07:02,159 Speaker 1: asked fair and great.