The shell-less snails of Taipei: Colebatch

Tim Colebatch follows up his recent excellent article on housing and tax with another on the consequences of a housing bubble – this time looking at lessons from Taipei, where the so-called 'snails without shells' – young persons priced out of the owner-occupied housing market – are protesting unaffordable housing.

(Snail and friends in unaffordable Taipei.)

Colebatch's article also refers to another recent controversy: whether Australian house prices have been pushed up by foreign buyers, which reportedly had been given a filip by the Federal Government when it relaxed the regulation of such purchases by the Foreign Investment Review Board last year.

Here at the Brown Couch we watched with amusement as the TV current affairs shows tried to report this one, not sure whether to appeal to the presumed racism of their audience (ie 'cashed-up Chinese are buying all our houses – boo!'), or their presumed greed as house-price speculators (ie 'cashed-up Chinese are buying all our houses – hooray!').

The Government is now moving to tighten the regulations up again. The Urban Taskforce, the developer lobby group, liked the relaxed approach. Its Chief Executive, Aaron Gadiel explained:

a renter will not be fussed if their landlord lives in Australia or overseas – they just want a home. By allowing foreign investors to purchase new housing, more apartment development is made possible, which in turn means more homes available to renters.

Fair enough – up to a point. This position holds only in relation to investment in newly built housing, not purchases of existing stock. It is not clear that overseas landlords have done any better than their Australian counterparts in building new stock, rather than just buying and bidding up the price of homes already in existence.

The Housing Debt Mountain

This afternoon Steve Keen commences his long walk from Parliament House to Mount Kosciuszko, turning a losing bet about house prices into a campaign against the mad financing – and daft government policies, like the First Home Owners Grant – that makes housing unaffordable.

(Mount Kosciuszko)

(Mount Debt)

The Brown Couch wishes that the wind is at his back.

Congratulations, Murdochs

Double congratulations from the Brown Couch to glamorous Sydney couple, Lachlan and Sarah Murdoch.

(The Murdochs)

Congratulations first on the announcement today of the birth of their third child... and secondly on the news that they have entered into a two-year fixed term agreement for Coolong, the handsome Vaucluse pile. The Murdochs are tenants.

(Coolong)

Better do the condition report very carefully.

The Murdochs are one of the 40 per cent of New South Wales renting households with dependent children. In fact, at the 2006 Census, 16 per cent of all New South Wales residents living in rental housing were children aged under ten.

Subletting: how the draft Bill would work

The REI has been banging on about the subletting provisions of the draft Residential Tenancies Bill again. They just don't get it. As a service to confused agents, here's how the subletting provisions would work.

For the purposes of the exercise, I'll need to employ a couple of educational aids. Meet Tina Tenant and Sally Subtenant:

(Tina Tenant (left) and Sally Subtenant (right))

Now meet Lenny Landlord:

(Lenny Landlord)

Let's begin.

Scenario 1: Tina is thinking of subletting to Sally without Lenny's consent.
The draft Bill says: she better not. If she did, Tina would be in breach of her tenancy agreement. Lenny could, if he so chose, give a notice of termination on this ground. (This is the same as the current law.)

Scenario 2: Tina is going overseas for six months. She asks Lenny if she can sublet the entire premises to Sally while she is gone.
The draft Bill says: Lenny can refuse consent – no ifs or buts. He can refuse even if it is unreasonable to so. (This is the same as the current law.)

Scenario 3: Tina wants Sally to move in with her. She asks Lenny if she can sublet the spare room to Sally.
The draft Bill says: Lenny can refuse consent, but not unreasonably. (This is a change from the current law – and a pretty minor change at that.)

Let's look more closely at what the draft Bill says about 'reasonable refusal'.

Scenario 3a: Tina asks Lenny's consent to sublet the spare room to Sally. Lenny knows about Sally – and he would never give a tenancy to her if she applied for one.
The draft Bill says: Lenny can refuse consent. The draft Bill expressly provides that a landlord may refuse consent to a subtenant if the landlord would not have approved that subtenant for a tenancy.

Scenario 3b: Tina asks Lenny's consent to sublet the spare room to Sally. Lenny says 'no no, I don't care who it is, I'm not even going to consider it.'
The draft Bill says: Tina may not go ahead and sublet the spare room – that would be a breach. However, she may, if she so chooses, apply to the Tribunal for an order allowing her to sublet the spare room. The Tribunal will decide whether Lenny's refusal was unreasonable.

This is what the agents have been making so much noise about. Not that big a deal, is it?