RADICAL STRATEGY: The answer you’ve all been waiting for?
THE founder of a new political party dedicated to taking the heat out of Australia's overblown and hideously expensive housing market has said politicians need to be given a "kick up the bum" on the issue.
Sydneysider Andrew Potts, who registered the Affordable Housing Party (AHP) with the Australian Electoral Commission earlier this month, said he knew he had to do something when he was chasing rats out of his own decrepit rental accommodation.
Talking exclusively to news.com.au, Mr Potts, the party's national convener and lead Senate candidate, said housing affordability was a national issue.
"Australians are spending too much of their income on housing and we're putting too many eggs in one basket with property investment."
An economic researcher agrees, saying "crap policies" were pricing people out but warned reducing house prices in a country so propped up by property could lead to dire consequences and job losses.
The party's policies include:
• Phasing out negative gearing and capital gains discount on investment property sales
• Stopping overseas buyers from buying Australian properties
• Taxing properties left empty by investors
• Cutting down immigration to 70,000 annually
• Banning full time Airbnb properties
• Ending "no fault" evictions for rental properties
The former journalist denied they were radical solutions to soaring house prices pointing to census data that showed in some parts of Sydney one-in-10 properties are "ghost homes" left empty by investors.
"I don't think it's a radical idea that housing in Australia should benefit people in Australia and not people who don't live here and don't need to own property here.
"There could be up to 300,000 empty properties in Western Sydney, that's enough to house every homeless person and person in public housing," he said.
"The property underneath mine has been empty for over a year. Let's tax people to force them to be rented out to people who need them."
Australia has a household-debt-to-income ratio of 190 per cent with banks holding at least 60 per cent of their loan assets directly in housing. Last week news.com.au reported on a Sydney couple who had racked up seven properties between them and were more than $1 million in debt.
Living with a chronic illness that has limited his capacity to save for a deposit, Mr Potts said he had personal experience of how bad Sydney's housing can be.
"I used to live in a former brothel where clients would still knock on the door and one building was so derelict I could chase rats out of the house without opening the front door."
Although housing affordability is the mantra of all the major changes, Mr Potts is sceptical their hearts are really in it.
"As many of our elected representatives are property investors themselves they have a vested interest in not fixing the problem.
"Investors have plenty of politicians fighting for their interests; renters and first home buyers need a party fighting for them."
Co-founder of economics research firm LF Economic, Philip Soos, gave the manifesto the thumbs up if the aim is to make renting more secure and take the heat out of housing prices.
"Despite talk about the Great Australian Dream, home ownership has been falling over the last couple of decades as investment property ownership increases."
But he warned bringing more properties within reach of first home buyers would see others suffer.
"Everyone wants lower prices but be careful what you wish for as property makes up $7 trillion of our economy."
Mr Soos said Australia was in a housing bubble with its growth reliant on ever rising housing prices.
"The moment that growth isn't there that will be difficult for a lot of people and create its own problems through increased unemployment."
A central pillar of the AHP, the president of which is disaffected former Liberal Member of the Victorian Legislative Council Reg Macey, is a phase out of negative gearing.
This is the ability for owners of multiple homes to offset their losses on one property against their income.
Critics have long said axing negative gearing will simply lead to investors raising rents to make up the shortfall; building more homes is the answer. They point to rent rises between 1985-87 when the Hawke Government briefly axed negative gearing.
Mr Soos doesn't buy into that theory. "The idea that it increased rents is just not tenable. That story is nowhere near as strong as the industry likes to make out."
He said rents only went up in Sydney and Perth where there were low vacancy rates and in other capitals it was flat.
"The problem isn't supply, it's under-utilisation and crap policies. We're in the middle of a massive construction boom yet properties are left vacant when they could be rented out.
"When they're going up by $50,000-100,000 a year why bother with the hassle of tenants?"
However, top of Mr Soos' wish list would be bolstering renters' rights.
"In Germany some families rent the same property their entire lives. That's completely different to Australia where we have some of the weakest tenancy rights in the West and people can be shuffled around a couple of properties each year."
Mr Soos also backed the AHP's call to limit migration, which is similar to entrepreneur Dick Smith's stance that a 70,000 migrant per year is more sustainable.
"Australia's been running a Ponzi scheme of 200,000-300,000 net immigrants each year and that's putting a significant strain on housing and infrastructure."
Mr Potts said advocating for an immigration crack down did not mean the party was on the right.
"With the current rate of growth we need a city the size of Canberra every year to keep up with demand and that's not sustainable.
"Progressive Australians who oppose rapid population growth for non-racist reasons now have a party to vote for that and are not forced towards One Nation."
Full time Airbnb properties were also in the party's sights.
"It's a huge problem in parts of Europe with whole neighbourhoods with no locals because all the housing is tourist accommodation".
Despite the small size of the party, Mr Potts said he was hopeful of success at the next federal election. New Senate voting rules that mean people have to tick at least six boxes mean single issue parties with a clear name could attract one of those ticks, he asserts.
"We'd like to achieve an electoral upset that shocks the political establishment on the issue of housing affordability.
"Without that kick up the bum we don't believe the politicians will ever change."