REIA calls on Fed Gov to provide housing affordability solutions

The Federal Government must take a leadership role in the housing affordability debate. Real Estate Institute of Australia President Malcolm Gunning says it is imperative that the Federal Government urges all states and territories to take the same approach to the provision of assistance to first homebuyers.

With first home buyers finding it increasingly difficult to enter the housing market, home ownership in Australia is declining after four decades of stable levels.

This is why REIA is asking the Federal Government take a leadership role in urging all states and territories to take the same approach to the provision of assistance to first homebuyers regardless of whether the dwelling is new or established as well as allowing first home buyers access to their superannuation for the purchase of a home.

Strong population growth in Australia as well as changes in the demographic composition necessitates that the supply of affordable housing is addressed as a priority policy issue. ABS population projections show net overseas migration is expected to make a stronger contribution to population growth in future years than it has in the past.

The REIA is also urging the Federal government to show leadership in addressing housing affordability by taking a co-ordinated and holistic approach of all levels of government in objectively addressing all property taxes.

Stamp duties, for example, are a major hurdle for first homebuyers and older home owners. For first homebuyers stamp duty often makes the difference between the ability to buy and not to. For older home owners considering down sizing to accommodation more suited to their needs in retirement stamp duty is frequently given as the reason preventing such a move.

Stamp duties are also inequitable for those who move more frequently, for work related reasons for example, than those that do not as they face higher costs even if their circumstances are otherwise similar. Choices between renting and buying and between moving house and renovating are also distorted by stamp duties

Stamp duties are thus preventing a more efficient use of the housing stock and are exacerbating the supply problem.

The seven recommendations REIA made to the Commonwealth Government are:

• Take a leadership role in taking a co-ordinated and holistic approach of all levels of government in objectively addressing all property taxes
• Until a co-ordinated and holistic approach in objectively addressing all property taxes is undertaken that negative gearing and capital gains tax on property investments are retained in its current form.
• Take a leadership role in urging all states and territories to take the same approach to the provision of assistance to first homebuyers regardless of whether the dwelling is new or established.
• Establish a scheme to encourage young Australians to have access to their superannuation for the purpose of raising a deposit for a first home.
• An improvement in the supply of housing for social housing tenants transitioning to private rental by utilising private investment.
• The appointment of a Minister for Property Services.
  • Establish a mechanism to ensure the availability of reliable data on housing demand and supply in order to formulate appropriate policies and to monitor their effectiveness.
  

The property sector needs to be a crucial and integral element of the 2017/2018 Budget and housing affordability and the taxation of housing need to be addressed in a holistic manner rather than the often simplistic debate about negative gearing as if it’s abolition is the panacea for all things.

Housing Affordability Online Consultation:

Q: What can be done to improve housing affordability?