Australian housing is a cartel, and it’s time to break it up

As I stood waiting for my $4 coffee in a trendy inner city café today, I couldn’t help but notice a distinct undercurrent of dissatisfaction in the air. The barista’s eyes reveal a mix of exhaustion and frustration, the newspapers strewn on the bench all bemoan the “cost of living” in an Orwellesque feat of non-speak, and the group of young people next to me chat in almost conspiratorial tones about the looming risk of finding themselves out on the street. It’s as if the Australian housing market has become the villain in our daily lives, leaving us living like a mafia run city paralyzed by the fear of what might happen if we dared say “enough”.

After all, if we’re being honest, is that not what the housing market has become – little more than a racket to grift money out of those unlucky schmucks not already in on the game? Or more accurately, a cartel.

Now, before you dismiss me as a conspiracy theorist with an overactive imagination, let’s take a moment to consider the facts. Over the past two decades, housing prices in Australia have skyrocketed, leaving many Australians priced out of the market. There was a time in living memory that a house would cost you a fraction more than the cost of the materials it took to build it, but now on an average income you’d be lucky to even save enough to put down a deposit on an apartment in Sydney before the age of 40.

But why is this happening? Are the laws of supply and demand really that out of whack in a country of our size? Or is something more sinister afoot?

Enter the cartel. You know, those shadowy organizations that we associate with drug lords and price-fixing scandals. While the Australian housing market isn’t quite the stuff of a Godfather movie, it does share some disturbing characteristics with a cartel: a small number of powerful players controlling supply, and an environment where collusion is not only possible, but highly profitable.

At the deepest heart of the issue is the political unwillingness to allow housing prices to drop. Ignoring that our nation’s politicians are themselves one of the most concentrated pools of property investors in the country, there is also the fact that our leaders are obsessed with pandering to voting homeowners with vested interest in maintaining, if not increasing, the value of their properties. As a result, even common sense policies that might help address our growing epidemic of homelessness are seen as politically undesirable, and so, the status quo remains unchallenged, and fuel keeps getting poured on the fire.

Meanwhile, enterprising Australians looking to buy a home are left with little choice but to take out wildly inflated loans to keep up with the ever-rising housing prices. And where do they turn for these loans? A small handful of lenders, of course. These lenders, often referred to as the “big four” banks in Australia, dominate the mortgage market, effectively controlling the flow of credit to potential homeowners, and as a result, they can play puppet master with house prices.

What we are now seeing as a result, is the tendency for these banks to act like legalised wealth extractors – trapping people in multi-million dollar loans then ratcheting up their interest rates, while keeping interest on savings artificially low. This process ensures that, over time, more people have less savings, thereby making them even more dependant on ever increasing loans. In this low-regulation, high profit market, we’ve effectively trapped every person seeking shelter into a cycle of subservience to a banking cartel, working in tandem with a reserve bank dominated by business interest which helps put a sheen of legitimacy on their grift.

The rental market is no different, where the bank’s wealth extraction is simply removed one degree – those priced out of the housing market are used to pay off the mortgages of other more wealthy people, whose ability to middle-man a bank loan is encouraged with tax breaks and subsidies, as reward for their charitable act of helping keep supply low and prices high.

This combination of political inaction and a highly concentrated lending market has created a pseudo-cartel situation where everyone wins — except the average Australian.

And so, dear reader, I present to you my latest, and perhaps most daring, proposal: a class action lawsuit against the government and the big four banks, aimed at forcing them to take drastic action to fix the housing crisis.

Our demands? The scrapping of negative gearing, a ban on using residential housing as Airbnb rentals or investment portfolios, and a commitment to prioritize affordable housing over profit-driven development. We, the young people of Australia, would be taking a stand against intergenerational theft, demanding that our basic right to shelter is upheld by those in power.

Now, if this sounds familiar, it’s because it takes inspiration from a similar movement that has been gaining traction around the world: young people suing their governments to force them to take action on climate change. Much like the housing crisis, climate change follows the same pattern of vested interests and intergenerational theft, where the actions (or inactions) of those in power today have far-reaching consequences for future generations.

In both cases, the government has abdicated its responsibility to its younger citizens, prioritizing short-term political and financial gains over the long-term well-being of the nation. By launching a class action lawsuit, we would be sending a powerful message that enough is enough, that Australia’s less well off are not going to be forced into 15th century style serfdom, and that it’s time for real, meaningful action to address this growing problem.

It would require the mobilization of a generation, the rallying of legal resources, and the courage to face a potentially long and drawn-out legal battle. But as history has shown us, when people unite in pursuit of a common goal, incredible things can happen.

It’s time we demanded a future where housing for all can be more than just an Australian dream.

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