It's been surprising to observe how neither political party had much to say on housing policy during the election. Why was there a gulf of near-silence on housing policy and affordability? this is less than acceptable. We need immediate action.
With Labor edging ahead as of 1pm today by an estimated 3700 votes, after slipping behind by around 2,000 votes only a day earlier it's anyone's guess whether we'll see clarity around housing policy any time soon.
Some pundits suggest a shift in the make-up of government could deliver a positive outcome for homebuyers. A new style of government, with a level of genuine debate around housing policy and reform, could result in compelling policy for Australian's that goes well beyond subsidies and beyond the National Rental Affordability Scheme.
A well thought-out mix of grants, tax changes and other incentives along with planning approval and development process improvements and the release of Commonwealth-owned land for housing could work together to help ease housing affordability pressure.
The Coalition's National Affordable Housing Agreement (NAHA), which promises to “attack problems that reduce housing affordability” is an interesting development. Executed efficiently it could tackle several roadblocks to home ownership, such as planning delays and Australians' reliance on public housing. It also speaks of the Coalition encouraging the states and territories to create ‘affordable housing voucher schemes'.
During the election there wasn't a peep from either party about giving the First Home Owner Grant a good shake-up like under Rudd in mid 2009. In New South Wales the grant sits at $7,000 with a $750,000 cap for people buying or building.
Certainly subsidies for homebuyers have their place. But it's now time the government took more aggressive measures to increase the volume of housing available for all manner of households.
Also missing were major strategies to address housing affordability. The Real Estate Institute of Australia's most recent Deposit Power Housing Affordability Report has shown that, on average, households are paying $337 more on their mortgage than they were a year ago. In Australian capital cities, home loan repayments account for nearly 30% of people's income.
Median house prices have kept trending upwards in 2010. Median house prices per state in the March quarter follow:
- Sydney hit $609,474, up 1.4%;
- Brisbane moved up marginally (0.9%) to $455,000;
- Adelaide edged up 4.5% to $405,000;
- Perth went up 3.1% to $500,000;
- Hobart was up 2.8% to $380,500;
- Darwin went up 1.3% to $547,000.
Melbourne and Canberra were the only exceptions. In Melbourne prices dropped 2% to $524,500 (making it the third most expensive city in Australia after Darwin) and in Canberra prices fell a tiny 0.2% to $490,000, making the nation's capital now the fifth most expensive city to live in.
Rental affordability wasn't addressed during the election campaign either. Affordability for tenants isn't looking much better, with a three-bedroom house costing a national average of $498 per week to rent. It's been interesting to watch how Labor's regional policy, the National Rental Affordability Scheme has been progressing. Media reports suggest less than 2,000 cheaper rental homes have been delivered since the policy was announced in 2007. The government's target for 50,000 new dwellings has also been moved from 2012 to 2014.
Of concern is whether economic stability will continue under a new government, whether interest rate stability can be expected if the economy picks up pace or whether mortgage holders will be stung in the hip pocket again soon.
What is the government going to do about the interrelated issues of housing supply and affordability? Are we to just sit and wait and hope things get better? They need to start coming up with solid policies and reforms now before Australians give up on the dream of ever owning their own home…oh wait, that's already started to happen.
How is the government's lack of action on housing policy and easing affordability pressures affecting you and your decision to buy property? Has it changed your mind about buying your first home, selling a property or building your property portfolio? Are you watching and waiting? Tell us what you think.