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The 5% first home buyers scheme is a miserable policy failure – and the latest chapter in Australia’s housing disgrace | Greg Jericho

about 12 hours ago
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The story of Australia’s housing policy over the past 25 years is one of governments doing all they can to juice demand for housing while steadily reducing the supply of public housing.This trend continues as the latest housing finance figures suggest house prices are set to rise off the back of investors rushing into the market to beat the introduction of the 5% deposit scheme for first home buyers.Whether it be the 50% capital gains tax discount and negative gearing that gives investors a leg up, or first home buyer grants that try to balance that bias, the big emphasis is always on the demand side of the equation.And so the story continues with the 5% deposit guarantee for first home buyers that began on 1 October.It’s a policy that notionally makes it easier for first home buyers to get a home loan.

Mostly what it does is bring forward the number of first home buyers now bidding for properties.That increase in numbers has unsurprisingly led to many stories of surging loans and house prices.You can understand the temptation for the government.First home buyer loans are not growing.And given population growth, the number of people taking out first home buyer loans is clearly falling on a per capita basis.

If the graph does not display click hereSo the government came up with the solution of essentially giving people the mother of all first home buyer grants.The government’s own glossy pamphlet on the 5% scheme gives an example of a hypothetical buyer who would have needed to save $160,000 for a deposit on an $800,000 home.Under the scheme they will only need to save $40,000.That is effectively a $120,000 first home buyer grant.They’re not “given” the money but they are given that capacity to borrow – and thus bid for properties.

Anyone thinking that will not juice property prices has not been paying attention for the past 25 years,Property investors certainly have, because there is a massive surge of investor housing loans in the three months before the 5% scheme came into effect:If the graph does not display click hereThe 18% increase in investor lending in the September quarter was the third-biggest quarterly jump in the past 20 years,It meant that, for the first time since 2017, investor property loans accounted for more than 40% of all new home loans:If the graph does not display click hereThe increase was across the nation but especially in New South Wales and Victoria, where the value of such loans has increased 18% and 27% respectively over the past year:If the graph does not display click hereThe reason why this matters is that there is a strong link between the growth of housing finance and property prices,In the first half of this year there was a slight slowing of housing loan growth but the surge in investor loans turned that around,While it was looking like house prices growth was set to slow over the end of this year and the start of 2026, now prices look set to rise and rise quickly:If the graph does not display click hereImportantly the housing finance figures out yesterday do not include the loans in October, and yet we know the reports from banks that loan applications are increasing fast.

We thus have a situation where the government’s policy not only will increase prices after it begins but did so beforehand by causing investors to try to get in first!That’s a pretty special kind of policy failure.These finance numbers come just after the most recent building approvals data was released on Monday.In the past year the number of approvals is higher than a year ago, and public-sector approvals have also nicely increased from the recent low of 2023 and well above the pre-pandemic nadir:If the graph does not display click hereBut looking further back and taking into account population growth, the past 25 years of juicing demand and trusting the private sector to fix things has led us to a point where public housing plays a very minor role:If the graph does not display click hereIt would, however, be wrong to say the government is not interested in public housing.In August, the government amended the Defence Housing Australia Act to allow it to provide public housing for visiting American sailors coming here as part of the Aukus submarine deal.It is the perfect culmination of 25 years of housing policy failure – juicing demand to make houses more expensive for Australians while providing good public housing for … Americans.

Greg Jericho is a Guardian columnist and policy director at the Centre for Future Work
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Shelter should follow Crisis and directly house homeless people | Letters

I was most interested to read your report about the decision made by Crisis to start directly providing accommodation for homeless people (Crisis charity to become a landlord in attempt to rectify ‘catastrophic’ housing in UK, 10 November). Faced with the growing impossibility of securing accommodation via housing associations or local authorities, Crisis sees this as the most direct way of helping. Isn’t it time that Shelter, with its history of supporting other homelessness organisations, arrived at a similar conclusion?Many people are under the impression that Shelter houses homeless people. Despite having financially supported many frontline housing organisations and related projects during the 1960s and 70s, it pulled back from this role in the 80s. It now works with its 900-plus staff and its £80m income to provide housing advice and to undertake research and campaigning

about 16 hours ago
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A good deal struck for the NHS | Brief letters

You report (7 November) that Barts Health trust’s takeover of a fully equipped, state-of-the-art private hospital is “thought to be the first time the NHS has inherited ready-to-use health facilities in this way”. However, in 2002, for £37.5m, the Scottish executive bought a large private hospital in Clydebank, built in 1994 at a cost of £180m by a US healthcare firm, for the NHS. Now the Golden Jubilee University National hospital, it delivers 57,500 procedures a year. Not a bad bargain, I’d say

about 16 hours ago
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Peter Archer obituary

My friend Peter Archer, who has died aged 80, bettered the lives of many people by improving housing conditions and regenerating neighbourhoods from inner city Bristol to New Delhi. He combined a strategic vision with a belief that communities should have a voice in decisions that affect their lives.One of Peter’s greatest achievements was his establishment in 1986 of Care and Repair England, a project designed to help older and disabled people to continue to live independently by improving their existing housing conditions. He chaired the charity for 20 years and would later (in 2010) rewrite UK government guidance on home adaptations for disabled people.Born and raised in Bromley, Kent, Peter came from a family with a strong Methodist background

about 16 hours ago
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Marianne Rigge obituary

My wife, Marianne Rigge, who has died aged 77, was a passionate public advocate for the interests of NHS patients, and a pioneer in creating ways of giving people easier access to medical and health information.The daughter of a GP, she founded a national charity, the College of Health, with the renowned social entrepreneur Michael Young, in response to their experiences as patients and in the consumer movement. Young was the inspiration behind organisations including the Open University and the Consumers’ Association, which he launched in 1957.Marianne joined the Consumers’ Association in the 1970s, and she and Young set up the College of Health in 1983, with the aim of influencing NHS doctors to put the needs of patients at the centre of treatment and care decisions. She ran the charity as director, from Bethnal Green, east London, for 20 years and it helped thousands of people

about 16 hours ago
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Abuse by UK’s ‘most prolific sex offender’ was ignored at Medomsley detention centre, report finds

A man who worked as a prison officer and caterer in a youth detention centre was able to rape and torture boys for three decades while the abuse was “ignored and dismissed”, according to a report labelling him as possibly Britain’s worst ever sex offender.Neville Husband carried out at least 388 sexual offences against young men and boys between 1969 and 1985 while working at Medomsley detention centre in County Durham, but is believed have committed hundreds more crimes, which would take the total past the 450 committed by Jimmy Savile.Adrian Usher, the prisons and probation ombudsman (PPO) for England and Wales, has compiled a 202-page report on the conduct of staff at Medomsley from 1961 to 1987, in which he describes Husband as “possibly the most prolific sex offender in British history”.Husband, a former church minister and scout troop leader who died in 2010, is thought to have groomed and attacked hundreds of trainees in Medomsley’s kitchens, where he worked.Men and boys aged 17 to 21 who had been convicted of relatively minor crimes were sent to Medomsley where the ethos of the “short, sharp shock” was in place to deter them from reoffending

about 17 hours ago
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Experts concerned over health effects of high-dose nicotine pouches as sales soar in UK

Walk into any corner shop and you’ll see them: colourful tins stacked beside the chewing gum, boasting flavours from frosty berry and lime storm to something called Tomorrowland. Welcome to nicotine pouches – the tobacco industry’s latest diversification strategy.Marketed as “tobacco-free” but packed with nicotine, these small sachets promise a discreet buzz. Sales are rapidly climbing, and UK ministers are considering tighter rules. But are they helping smokers to quit – or hooking a new generation on nicotine? And what else are they doing to people’s health?Nicotine pouches are different from snus – a moist tobacco paste – and vapes, which deliver nicotine via inhalation

1 day ago
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UK economy unexpectedly shrank in September as JLR hack hammers production output – business live

about 2 hours ago
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UK economy grew by just 0.1% in third quarter amid hit from JLR cyber-attack

about 2 hours ago
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Anthropic announces $50bn plan for datacenter construction in US

about 11 hours ago
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Waymo announces that its robotaxis will drive freeways for the first time

about 12 hours ago
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Australian restaurant chain apologises for burger curse as Oscar Piastri hopes to turn F1 season around

about 10 hours ago
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Sinner into last four of ATP Finals after straight-sets win over Zverev – as it happened

about 12 hours ago