Top auctioneer Tom Panos says immigration is to blame for Australia’s housing crisis – and developers have been stopped from building more homes because of red tape.
While Mr Panos supported immigration to Australia, he said houses needed to be built to support the growing population.
“We’ve allowed mass migration – which is fantastic – but no one has really asked where these people will live,” he told Daily Mail Australia.
He also pointed out that Australia was already struggling to house existing residents, and the growing population was only exacerbating the problem.
A net 509,800 migrants moved to Australia in the year to March, thanks to a large influx of international students during a rental crisis.
This was significantly higher than the Treasury’s May forecast of 395,000 for the year to June 2024, casting doubt on the government’s forecast that immigration levels will slow dramatically to 260,000 by 2024-2025.
House prices have risen by double digits in Brisbane, Adelaide and Perth over the past year, despite the Reserve Bank’s 13 rate hikes in 2022 and 2023.
In Sydney, where the average house price is $1.474 million, only people earning $227,000 or more, among the 2.3 percent of the highest earners, can afford to buy a regular home themselves.
In addition to the housing crisis, only 158,752 new homes were built in the year to June, the lowest figure in twelve years. Nearly 3,000 construction companies also went bankrupt in the past financial year due to high interest rates.
Top auctioneer Tom Panos (pictured) says immigration is to blame for Australia’s housing crisis
A net 509,800 migrants moved to Australia in the year to March, thanks to a large influx of international students amid a rental crisis
Mr Panos said that while high interest rates and expensive construction materials have already made it impossible for many developers to make profits, there is another problem that the government must address.
‘Get rid of the red tape. Get rid of the bureaucracy involved,” he said.
‘Developers have been on the sidelines in recent years. They won’t build.’
He also blamed local municipalities and urged them to meet quotas for new housing projects.
“Local municipalities should be punished if they do not meet the various quotas to have ‘X’ new properties installed in their area,” he said.
“They can’t just sit there, they need KPIs and if those targets aren’t met, the state government could consider taking away some of their powers.”
Responding to calls to abolish negative gearing for real estate investors – a tax incentive that allows investors to offset losses from rental properties against their taxable income – Mr Panos argued that removing it would shrink the rental market and drive rents even higher would float.
“The government needs investors because investors provide housing for tenants,” he said.
‘If they were to abolish negative gearing, a lot of rental properties would disappear from the market.
‘And if a lot of rental properties leave the market, there will be fewer properties for tenants to choose from.
‘And if there are fewer homes for tenants to choose from, rents will start to rise again.’
He explained that real estate investors are often ordinary people, such as teachers and office workers, who are just trying to secure financial security for their families.
“Sixty-seven percent have taxable incomes of less than $100,000 a year,” he explained.
If negative gearing were abolished, he warned that many of these investors would sell their properties, leaving fewer homes available for renters.
“It’s not rocket science to work out the fewer properties there are available, the more they yield when you rent them out,” he said.
He also disputed the idea that abolishing negative gearing would free up homes for first-time buyers.
“The reality is that renters don’t normally have access to $50,000-$80,000 to put a down payment on a house,” he said.
Contrary to popular belief on social media, Panos says real estate agents are not responsible for the housing crisis
Contrary to popular belief on social media, Panos says real estate agents are not responsible for the housing crisis.
“Real estate agents don’t have that much power to control the market,” he said.
‘They have no control over the housing supply. They have no control over the vacancy rate among tenants.’
Mr Panos said that if he really wanted to make money and help the real estate sector, he would not advocate allowing negative gearing to remain.
“If it were abolished, the real estate industry would benefit from all the houses coming onto the market and being sold because real estate agents are paid for the transactions,” he said.