Governments need to step up to solve affordability woes

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Australian governments have to exert more effort to do their part in solving the country's housing affordability crisis, according to the property leaders who attended The Australian Financial Review Property Summit.

While they acknowledged the creation of the National Housing Finance and Investment Corporation during the 2017-2018 federal budget, they said this intervention was not enough to solve the affordability issues in two of the biggest housing markets in the country — Sydney and Melbourne.

Aside from pushing efforts to release land faster, property leaders said governments need to solve the planning delays and provide tax breaks for build-to-rent housing.

Also read: Are Housing Taxes In Victoria "Excessive"?

Furthermore, they said any kind of funding should be sustainable enough to ensure the supply of affordable and social housing.

For instance, the use of National Rental Affordability Scheme was deemed to be poorly designed, said Community Housing Industry Association chief executive officer Wendy Hayhurst.

"The scheme has stimulated affordable housing development, (but) it had issues in its design and implementation as it wasn't well-targeted – but what it did was provide a format to get funding. It also got a fair number of affordable houses off the ground," she said.

Hayhurst added that the scheme was not able to stimulate institutional investment over the long term.

The problem is not with ideas but with consistency, said Frasers Property chief executive Rod Fehring.

"I think the ideas that are being promulgated from election to election are all about providing a solution. But what I do get frustrated with, is how hard it is actually to get consistency over a period of time," he said.

Also read: Top Tax Issues When Subdividing Or Buying New Property

A recent report from the Productivity Commission revealed that around 600,000 households are already struggling to afford rents, leaving them suffering from rental stress.

The report said state governments can look into their local tenancy laws to improve the certainty of tenure for vulnerable tenants.

"For example, there are wide disparities across the country between the minimum notice periods required for eviction on sale of a property, from as little as four weeks to more than eight weeks," the report said.

Furthermore, the Commonwealth Rental Assistance could be improved, given that the maximum payment rates have fallen behind average rents over the past two decades.

"Commonwealth Rent Assistance has proven to be effective in supporting low income and low wealth households, including retirees," the report said.

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