High house prices in Australia are caused by…

By Andrew Mackinnon

Last updated: 21st February, 2024



High house prices in Australia are caused by…

> non-white immigration into Australia, which causes the number of people living in Australia to increase, thereby causing demand for residential properties in Australia in all forms, including houses, apartments and land, to increase and thereby causing house prices to increase.

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Non-white immigrants to Australia generally do not buy residential properties in Australia as soon as they arrive in Australia. It generally takes time for them to get their finances in order and save up a deposit in order to buy residential properties in Australia. There is generally a lag, often of years, between non-white immigrants to Australia arriving in Australia and demand for the purchase of residential properties in Australia in all forms, including houses, apartments and land, increasing as a result of their arrival in Australia.

Non-white immigration into Australia also provides a strong stream of tenants to create demand for residential rental properties in Australia, so that residential property investors can confidently earn rental income from their residential rental properties that they own as residential investment properties in Australia. Non-white immigration into Australia leads to an increase in demand for residential rental properties in Australia and an increase in rents. In the 1990s and 2000s, passive income in the form of rents from residential investment properties in Australia, being income earned without working for it, was marketed by the residential property industry in Australia as the holy grail of income. Australia’s economy has been built around this concept of passive income ever since.

Non-white immigration into Australia should be banned.

Banning non-white immigration into Australia (and deporting non-white non-citizens of Australia (with the exception of genuine refugees) back to their countries of origin) would cause house prices in Australia to decrease by at least 30%, which is unavoidably necessary in order to make housing more affordable in Australia.


> allowing non-citizens of Australia to purchase and own residential properties in Australia, which increases demand for residential properties in Australia, thereby causing house prices to increase.

That the Australian federal government has not banned the purchase and ownership of residential properties in Australia by non-citizens of Australia shows that the Australian federal government does not govern exclusively for Australian citizens but for non-citizens of Australia also, of whom there are purportedly more than 8 billion (i.e. 8,000 million). Allowing non-citizens of Australia to purchase and own residential properties in Australia causes the number of people who want to purchase and own residential properties in Australia to increase, thereby causing demand for housing in Australia to increase and thereby causing house prices in Australia to increase.

Allowing non-citizens of Australia to purchase and own residential properties in Australia should be banned.

Banning the purchase and ownership of residential properties in Australia by non-citizens of Australia would cause house prices in Australia to decrease by at least 15%, which is unavoidably necessary in order to make housing more affordable in Australia.


> bank lending to residential property investors for residential investment properties in Australia, which increases demand for residential properties in Australia, thereby causing house prices to increase.

This includes bank lending to residential property investors who are using their superannuation in order to fund part of the purchase price of residential investment properties in Australia. The very definition of investment entails purchasing an asset out of savings. No bank in Australia should be allowed to lend for the purpose of the borrower purchasing an asset for investment with the objective of making a capital gain over time, such as real estate, shares, precious metals, coins, antiques or art. Borrowing for such a purchase is not investment. It is speculation. However, if such a purchase is financed out of existing savings, rather than borrowings, then it can correctly be called an “investment”.

Without bank lending to residential property investors, the overwhelming majority of residential property investors would not be able to afford to purchase residential investment properties in Australia in the first place. Bank lending to residential property investors therefore makes purchasing residential investment properties in Australia more affordable for residential property investors and causes demand for residential investment properties in Australia from residential property investors to increase, thereby causing house prices in Australia to increase.

Bank lending to residential property investors for residential investment properties in Australia should be banned.

Banning bank lending to residential property investors for residential investment properties in Australia would cause house prices in Australia to decrease by at least 15%, which is unavoidably necessary in order to make housing more affordable in Australia.


> negative gearing, which increases demand for residential properties in Australia, thereby causing house prices to increase, by allowing the tax deductibility of residential investment property losses against other sources of income, such as salaries and wages, even though it is not necessary to incur those losses in order to earn those other sources of income.

A bedrock principle of income tax law in Australia has always been that deductions against income must be expenses that were necessarily incurred in order to earn that income. The deductibility of residential investment property losses against other sources of income, such as salaries and wages, violates this principle.

Without negative gearing, the overwhelming majority of residential property investors would not be able to afford to meet the repayments required by the mortgages they took out to purchase their residential investment properties in Australia and therefore would not have been able to purchase their residential investment properties in Australia in the first place. Negative gearing therefore makes purchasing residential investment properties in Australia more affordable for residential property investors, thereby causing demand for residential investment properties in Australia from residential property investors to increase, thereby causing demand for residential properties in Australia to increase (whereby residential property investors compete with owner occupiers in order to purchase residential properties in Australia) and thereby causing house prices in Australia to increase.

Negative gearing should be banned.

Banning negative gearing would cause house prices in Australia to decrease by at least 15%, which is unavoidably necessary in order to make housing more affordable in Australia.