This article was written for Fair Go For Pensioners by its Victorian President Joe Montero

While Australian policy makers continue to pretend the nation’s housing woes are about the lack of properties to satisfy the market demand for them, real life has a way to prick the illusion. Cities like Melbourne, Hobart ad Darwin recorded falls over the last month. In the longer-term, the rate of rise has been shrinking, not hugely, but it’s definitely there.

The data doesn’t suggest that the era of excessively priced homes has come to an end. It suggests that the supply and demand explanation mises the point. Everyone needs a home. Not everyone can afford to buy one. This is the problem. So, while there is demand, what is called the effective demand trails behind it. Effective demand refers to demand that the person is able to pay for. With housing, lagging effective demand takes the form of unaffordable housing.

Thus, the existing housing crisis can’t be solved by building more homes to be sold at market prices. The reality is that in Melbourne’s CBD only 5 percent of private dwellings have no tenants. In Sydney’s CBD its 3.1 percent. But if we look at the wider picture, the 2021 census revealed that more than 1 million homes were empty. This hasn’t changed in 2024. In fact, the unoccupancy rate has been increasing since at least 2026.

Some of these homes will be new sales changing ownership and occupancy. Other will be holiday homes. But if this is all there is to it, as some in the industry are claiming, the proportion would be stable and not consistently climbing over time

Data from the Reserve Bank shows that in the 15 years to 2015, the proportion of investment properties versus owner occupiers grew consistently. The failure of the Reserve Bank is that it assumed all housing ownership is mum and dad housing. It did not factor in that driving the increase has been the entry and expansion of corporate housing. This is ownership of large portfolios by big companies.

Wall Street and Fleet Street property investors have moved into Australia. They are getting hold of an ever-increasing proportion of the available housing stock and engaging in major building projects. They have market power and the capacity to use digital information to manipulate the market and impact significantly on prices.

In Australia, they can operate almost anonymously. There is a lack of regulating legislation and oversite.

There is a lack of oversight, and this is made worse still by government providing generous handouts in the forms of negative gearing and capital gains Tax offsets when they sell properties. Government projects said to be to provide affordable housing engages the same Wall Street investors, giving them an extra bite of the public purse.

The proportion of the total market that corporate ownership takes is up to question. Government authorities don’t publish statistics on this, and the industry has no interest in doing so. Claims are as high as 60 percent of new properties. The proportion may not be this high. But we can be certain that it’s high enough to enable monopoly power to increase the cost of housing and rents.

Negative gearing encourages corporate owners with large portfolios to keep their properties empty, because the government pays them rent foregone, and empty properties cost less to maintain. It’s highly likely that corporate ownership is a major reason for the rise in unoccupied properties.

For instance, a common practice in major housing projects is what is called staged release. Only selling or renting a portion and holding the rest back crates an artificial shortage that effectively gets buyers and renters outbidding each other., and this is legal in Australia.

On top of this, when they partner on government projects, they enjoy a 63 percent increase in depreciation write offs, can sell off rental properties after 15 years, and are gifted with a 50 percent cut in land tax. These projects are ostensibly to build more affordable housing. But they also encourage more corporate takeover of the total housing market and all the disadvantages that come with it.

Corporate ownership is definitely a big factor in the property price bubble and excessively high rents.

The Wall and Fleet Street investors, generally hiding behind other names ae involved in partnership with the redevelopment of public housing estates. No wonder public housing is being decimated.