Corruption, opportunism and neglect - a reminder of a more terrible time.
Corruption, opportunism and neglect - A reminder of a more terrible time.
Property speculation in Australia is a national sport where corruption has been a distinguishing characteristic.
Real estate agents and influential property speculators, especially owners of large portfolios, have long argued that their ‘significant’ investments entitle them to a seat at the regulator's table.
Our history is strewn with examples of their interference in public policy.
And most of which has been to the detriment of the ordinary Australian.
Their influence has prevented, restricted or discouraged Governments from preventing distortions in the property market.
Just like the one we are witnessing now.
With the wealth generated by rising property prices over the last few years, everyone is hoping that the ride will continue.
But very few are prepared to guess what will happen when it stops. No one seems to know.
But we’ve seen it all before.
The inner city of Melbourne was once littered with slums.
At the turn of the 20th century, a negligent State Government along with callous and corrupt property investors combined to let vast pockets of inner city housing deteriorate beyond repair.
While many properties were officially condemned under an act of Parliament residences continued to be tenanted despite these buildings being utterly unfit for human habitation.
Families were allowed to live in appalling, squalid conditions.
They endured rat infestation, leaky roofs, mould, overcrowding, high rents and consequently poor health. Many houses had no running water, no bathrooms with as many as 7 people to a room.
Collingwood, Fitzroy, Carlton and Collingwood contained some of the worst examples of slums in Australia, some of the worst in the world.
The Argus, reported on 4th December 1914;
“Councillor Ievers[1] (a representative on the Melbourne City Council, Ievers was also a local real estate agent) and his family owned about 100 houses in the southern part of Carlton, and … that some of them were the worst in the district. There was a house in Bouverie Street not fit for an animal to live in, and the rent was 7/6 a week…”
“In Little Queensberry street there were eleven houses in a similarly bad condition. No children lived in these; the police would not permit it… In Canada Lane, every house had recently been condemned by Dr. Sinclair, Health officer of the City Council..”
In Sydney, the situation was equally appalling. The Northern Standard reported in September of 1949
“82 per cent, of 5,000 homes surveyed in N.S.W. were unfit to live in. Seventy-three per cent had no bathrooms or bathing facilities; Thirty-two per cent, had been condemned, some for as long as 20 years, and 84 percent, were completely shut off from natural sunlight.
"It is amazing to see who owns, the majority of Sydney's slum houses," said the secretary of the Co-operative Building Societies, Mr. W. G. Pooley
"The owners are mainly religious organisations, people with titles and business concerns."
For decades Governments continued to ignore their own laws and allowed slums in inner cities to remain occupied.
Local councils, largely made up of property opportunists and real estate agents actively resisted enforcing their own ordinances arguing that repairs or demolition of the slums would force tenants onto the streets.
When slum landlords were presented with orders to demolish they were often reprieved when the minimum of repair was carried out.
Sensational tales of depravity and tragedy were fodder for the evening news.
Melbourne’s middle and upper class residents were regularly titillated by the exaggerated stories of the poor.
Such was the contrived middle-class suburban shock ‘child rescue’ associations were formed, determined to snatch the neglected young away from their families.
In Melbourne, it would take the 1956 Olympic Games to be the urgent catalyst for widespread reform.
Concerned about the coming international exposure the Government brought forward emergency plans to demolish the condemned housing as quickly as possible.
Many inner-city neighbourhoods were bulldozed to be eventually replaced by Housing Commission towers. In the interim displaced residents were accommodated at the former Australian Army base, Camp Pell in Royal Park.
Tony Birch, a former resident in Fitzroy’s slums remembers his own families experience;
“People who lived in places like Fitzroy lived in appalling housing conditions.
They were shocking, there's no doubt about it.
But the only way to overcome that was to literally destroy that community and move people on and disperse them.."
Australia was a very different place all those years ago however, greed, opportunism and corruption are still present, and if history is any indicator, only ever a short step away.
Slum neighbourhoods in Sydney and Melbourne would go on to create several generations of Australians deeply scarred by poverty. In Melbourne, the wounds of the old demolished neighbourhoods remain, marked by the housing commission towers which now occupy the land.
Are we now witness to the rebirth of those conditions?
Is the Australian Property Bubble now set to burst?
As most observers agree property prices in each of our major Australian cities are unsustainable.
While house prices have fallen slightly in Sydney and Melbourne with some claiming that the peak has been reached there are many others who would point to the more disturbing signals prevalent in each of our major cities.
- There is a consensus that property market is at least 30% over-valued
- There is a huge over-supply of new apartments and many of them are of a very poor quality
- Despite generous Government Schemes first home buyers are virtually locked out of the market
- Wages are stagnant and have been for many years. Consumer confidence is falling; retail spending is down
- Speculation and opportunistic investor activity continues at extraordinary levels. Many
- investor properties, especially high rise inner city units are ‘speculatively vacant’ worth more unoccupied than populated with tenants. Across the country 1 million houses units and commercial developments are similarly unoccupied.
- There’s evidence of widespread corruption, dishonest loans, regulators asleep at the wheel adding up to a triangle of fraud.
- Households are burdened with too much debt.
In response, authorities seem paralysed by sectional interests.
The Australian Prudential Regulation Authority has moved to protect the banks against themselves, but arguably leaving ordinary citizens completely exposed.
The Government has tightened the foreign investment rules but Chinese cash is still king in Sydney and Melbourne’s real estate market.
The vacancy taxes, levied on homes that are left deliberately vacant are self-reporting and the exemptions to avoid the tax altogether are many.
Last century's crisis in housing was caused by corrupt landlords and supported by successive cowardly governments over many decades.
Looking around us now it is almost unimaginable those times ever returning.
But it did happen, characterised by a long period of decline and decay.
The question is are the conditions for it to reoccur being manufactured right now.
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[1] Councillor George Ievers statue still stands at the corner of Gatehouse Street and the Avenue in Melbourne.
Prosper Australia – Catherine Cashmore https://www.prosper.org.au/end-vacancy/
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