As many Australians face the fact that they may never be able to purchase a home, the government is being urged to boost the supply of housing to ease the pain.
In particular, Sydney and Melbourne have continued their strong capital gains trend, with dwelling values increasing to 2% and 1.8% over the three months ending July 2014, according to the latest RP Data-Rismark July home value indices. This has helped make dwelling values across the combined capital cities index 1.1% higher over the three month period.
In response to price increases making it difficult for people looking to buy a property, Master Builders Australia has told a Senate Inquiry into affordable housing that urgent reform is needed to increase housing supply.
“Reducing the massive shortfall in new housing is the major challenge the nation faces in maintaining home ownership as a realistic aspiration rather than an unaffordable dream,” Master Builders CEO Wilhelm Harnisch said.
This comes after data from the Australian Bureau of Statistics revealed new residential building approvals declined by 5% in June, prompting a residential building industry association to question whether it is likely the property market has seen its peak in new home approvals.
Master Builders Australia submitted an “eight point Affordability Agenda” to the Inquiry which calls on all levels of government to commit to a national housing affordability agenda.
The Affordability Agenda includes reforms such as competition style payments made to local councils to improve the supply of releasable land and an agreed ‘master plans’ to deliver a housing mix to meet the needs of different demographics and to make state and territory infrastructure charges subject to an affordability assessment. Moreover, it includes an online ‘InfoHub’ to allow ready comparisons between jurisdictions to enforce efficiency and accountability.
Meanwhile, the Real Estate Institute of Australia believes all levels of government need to take responsibility for housing affordability. They have made the following recommendations to address housing affordability:
- All states and territories recommit to the intergovernmental agreement which states that assistance to first home buyers should be across the board for new and established homes
- The Commonwealth Government assess the various international schemes that assist first home buyers, including the release of superannuation, and replicate those successes in Australia
- Negative gearing be retained in its current form for the purpose of property investment to underpin the viability of the rental sector
- Conveyance stamp duties be abolished and replaced by an efficient source of revenue for states and territories
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