Housing bodies celebrate, condemn affordability report

The report published by the inquiry into housing affordability and supply in Australia has seen conflicting reviews across housing bodies throughout the country, with some celebrating the findings while others have called for further action.

One organisation that supported the recommendations is the Housing Institute of Australia (HIA), with its managing director Graham Wolfe stating that they “point to the opportunity for the Australian government to play a significant role in ensuring more households are given the opportunity to become homeowners”.

“We are pleased to see further recognition of the impact the high impost of upfront taxes and charges have on the affordability of new homes,” he said, celebrating the report’s recommendation for national pivot from stamp duty to a land tax.

Mr Wolfe later added: “The recommendation that first home buyers should be allowed to leverage their superannuation as a guarantee for a first home loan reflects HIA’s long held position that there are other ways Australians can be assisted to bridge the deposit gap and achieve home ownership sooner. 

“The inquiry’s caveat that such a move should only be implemented if the supply of housing can be improved at the same time also reflects a pragmatic approach.”

A recent research paper from a think tank, The McKell Institute, warned that allowing buyers to use their retirement savings for a house deposit could push up property prices by as much as 28.3 per cent.

Real Estate Institute of Australia (REIA) president Hayden Groves slightly echoed Mr Wolfe, arguing that the body supports “the majority of the 16 final recommendations” that directly related to REIA’s recommendations for policies to enable supply, the building of more houses and to phase out stamp duty on a coordinated national basis.

“The complexity and breadth of the 16 recommendations just reinforce the need for a national plan for housing affordability and supply with both federal and state governments held accountable,” he later added. 

But other bodies have challenged the recommendations, with Real Estate Institute of NSW (REINSW) chief executive Tim McKibbin questioning whether this report will address the core of both housing unaffordability and the lack of supply.

“Solving the affordability crisis requires coordinated actions across all levels of government and while there is no single solution, increasing the supply of property is the most important action with the potential to have the greatest impact,” Mr McKibbin said.

“Other recommendations around property tax reform, and replacing stamp duty with land tax, are not new. Stamp duty is clearly an enormous barrier to affordability but all three levels of government are overly dependent on property tax.

“The combination of this dependency adds over 40 per cent to the cost of new property paid by the purchaser. 

“Replacing stamp duty with an annual property tax does not remove the government’s dependency on property tax. It is essentially a rebranding exercise,” Mr McKibbin said, adding that enabling first home buyers to access more money “merely increases the debt they will have to service”.

Community Housing Industry Association NSW chief executive Mark Degotardi went even further, arguing that the recommendations did not address the current lack of access to social and affordable housing. 

“The biggest takeaway from this report is that the federal government is deeply concerned with the supply and affordability of housing for Australians to own, yet they’ve completely ignored addressing a desperate need for greater supply of social and affordable housing,” Mr Degotardi said.

Mr Degotardi added that the focus of initiatives, such as rent-to-own, shared equity and private investment, was not the necessary remedy for these issues.  

“Whilst exploring the potential of models and programs such as those examined in the report is an undeniably valuable exercise in helping address the crisis we face, the narrowing of focus on them instead of properly addressing the dire shortages of social and affordable housing is a complete swing-and-a-miss by the federal government,” he said.

“Australia needs real and specific policies being delivered by its governments which will deliver more social and affordable housing, not fantasies of all Australians owning their own home.”