How landowners get ahead in Australia and the rest of us pay the price

The Landlord's Game, created by Elizabeth Magie, was a protest against landlordism but ended up inspiring Monopoly. (Supplied) Link copiedShareShare articleIf you've caught the news lately you'd be excused for thinking the sky was falling in. Australia's house prices are collapsing! Auction clearance rates are plummeting! We'll all be rooned! New data today shows that national property prices have declined for the last three months, -0.9 per cent from their peak. But guess what? National prices are still 5.8 per cent higher than they were a year ago. Early signs of an Australian housing market correction are now clearly visible, and at the heart of the recent property market weakness is less vendor power. Weren't we complaining a year ago that property prices were far too high? Well, now they're 5.8 per cent higher than that. According to today's PropTrack Home Price Index, property values are also sitting at record highs in every regional area of Australia, except in Queensland. The combined regional median property price is currently 9.5 per cent higher than a year ago. Why are regional property prices so high, and rising so quickly? Partly because people are abandoning Australia's major cities in search of cheaper housing. The median value of all dwellings in Sydney is $1.23 million (up 17.5 per cent in 5 years). In Brisbane it is $1.07 million (up 84.6 per cent in five years), while Perth is $1.01 million (up 96.2 per cent), and Adelaide is $942,000 (up 81.2 per cent). Those rapid price increases have been socially destructive. But the expectation of ever-rising property prices is also, incoherently, feeding a sense of national "crisis" whenever property prices drop a bit because our housing-industrial complex needs prices to keep rising for large sections of the electorate to be happy and big parts of the economy to remain profitable. It's a question the Australian filmmaker Kane Guglielmi is asking in a new documentary, Common Wealth. Guglielmi moved overseas at the start of the COVID-19 pandemic, but when he returned to Australia shortly afterwards he couldn't believe what had happened to property prices here. How Australian property prices had risen so quickly and reached absurd levels is the premise of the documentary Common Wealth. (Supplied: Darkwood Entertainment) He found property prices had risen so quickly, and had reached such absurd levels, that it contributed to his deep depression. He says he didn't understand why our housing market behaved that way, so he decided to find out and to document his journey. Guglielmi presents himself as a typical Aussie who loves his small family, who has a mortgage, and who just wants to live his life. But since our housing and tax system has been slowly tearing communities apart it forced him to seek answers about the drivers of big economic forces that cause so much pain for millions of people. He says that as a "conservatively-raised capitalist" some of the concepts he was introduced to on his journey were initially quite confronting. Gugliemli realises that a lot of our problems come down to land ownership. Who owns land in Australia? Why do some people have access to land and others don't? How cheap would house prices be if land values weren't part of the equation? Those questions lead him to contact economist Karl Fitzgerald who spends a lot of time thinking about property rights and land taxation. Fitzgerald works at Prosper Australia, one of Australia's oldest social reform organisations and think tanks which traces its roots to the 1890s. Fitzgerald explained to Gugliemli that a lot of Australia's "wealth" derives from land and how the value of land increases by the productive efforts of society, but rising land values are often captured by the private owners of land rather than by the community. Have you played Monopoly? The boardgame was designed to teach us about rents. Some economists say if we took rents seriously we could solve many problems. Gugliemli confesses that those ideas seem strange to him. He's being introduced to "Georgist" concepts about land, value, and resource rents. Henry George (1839-1897), an American land reformer and economist, famously argued that taxes on labour and business income could be dramatically cut, and poverty alleviated, if governments learned to tax land properly. Gugliemli says he'll try to keep an open mind. He then travels to Singapore where he asks officials how they built a society with such high rates of home ownership on such a famously small area of land. Whether Australians know it or not, the Singaporeans also drew on Georgist insights to build affordable homes for millions of citizens while keeping property prices low and sustainable. "Everybody works but the vacant lot," by Henry George. (Supplied: The New York Public Library Digital Collections. 1865 - 1899, General Research Division, The New York Public Library) Gugliemli then visits the United Kingdom, Switzerlan

How landowners get ahead in Australia and the rest of us pay the price

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