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Andrew Coronis said the program, which was expanded at the start of the new financial year to include 40,000 places, appears to have shifted the affordability battle away from saving for a deposit to servicing a mortgage.
“Housing values are expected to decline as interest rates rise,” he said.
“Whilst this will lower the deposit threshold for buyers, it won’t necessarily make housing more affordable to own.”
Mr Coronis compared the current scheme to the federal and state home owner scheme that was in place when he purchased his first home in 1989. At that time, the government support equalled $7,500 – or 14 per cent of the $55,000 property’s value – with this fee provided as partial payments to reduce debt over a five-year period.
Mr Coronis believes the reason why “we are already witnessing distressed sales as people simply can’t service their mortgages,” is due to the fact that home values are 8.5 times higher than the median national household income, according to Corelogic’s Housing Affordability Report from March 2022.
He would argue that the “root of the issue is limited supply of affordable housing and registered land to build on.”
“Whilst we welcome the introduction of Federal and State Governments’ policies to deliver more social and affordable housing for vulnerable people in our community, it is simply not enough to meet the overall demand,” he added.
According to the City Futures Research Centre’s 2021 report COVID-19: Rental housing and homelessness impacts in Australia, it was then estimated that around 15,500 social and affordable homes would be built over the next three years.
Separate figures published by the Australian Housing and Urban Research Institute in 2018 also then claimed that there were estimates that an average of 36,365 new social and affordable homes would be needed per year 2016 and 2036.
According to the Productivity Commission’s Report on Government Services, there were 163,508 Australians on waiting lists for social housing in 2021, a year-on-year increase of 5 per cent, and an almost 15 per cent increase since 2017.
Mr Coronis said this collision of supply shortages and demand surges can be seen throughout Queensland, where record levels of interstate migration in 2022 – 50,000 according to the latest census – have plunged the state into a rental crisis with vacancy rates of 0.7 per cent in May.
He has called for the Queensland government to take a similar approach to that seen in 2015-17, when the state approved many high-rise developments aimed at enabling developers to deliver more high-density housing in urban areas to ease the barrier of entry for buyers and provide more affordable options for tenants.
“Coronis is proud to support the development industry in lobbying the Government to release land and titles to make it more affordable for people to build and live in the communities that we serve,” he concluded.
[Related: 40,000 new places open up under Home Guarantee Scheme]
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