As CEO of Australia's largest mortgage broker, I follow the housing situation in Australia closely. In my opinion, two issues that require urgent attention are the problems of housing undersupply and housing affordability.
These certainly aren't new issues. They've been around for years and are slowly getting worse, which is one of the major reasons why the National Housing Supply Council was set up in May 2008.
Right now, I ask the question of the federal and state governments – Why aren't you working together to remedy the interrelated problems of housing undersupply and housing affordability?
To first give credit where credit is due, I believe the federal government should be commended for its increased investment in social and subsidised housing via the Social Housing Initiative, the Nation Building and Jobs Plan, and the National Rental Affordability Scheme.
However, there are blockages in the land and dwellings supply pipeline and they must be cleared to get on top of the undersupply problem that continues to stress housing affordability.
Blockages in land and dwellings supply pipeline
I suggest there are two critical areas outlined in the 2nd State of Supply Report 2010 that need to be addressed as a matter of urgency:
- An immediate and significant improvement is required in the planning approval and development assessment process. This remains fundamental to delivering the required supply of dwellings and land to satisfy present and future demand. These processes currently result in far too much time wastage, frustration and costs for developers and builders.
- The government must review, with a desire to reduce, property related taxes and charges.
The gap between underlying housing demand and total supply increased to a shortfall of 178,400 dwellings throughout 2009 and has been estimated to increase further to 308,000 by 2014. Given that housing supply has a direct impact on housing affordability for homebuyers and renters, both issues should be addressed in conjunction with the initiatives already undertaken.
First homebuyer segment and affordability issues
Further, for the first homebuyer segment and the growing affordability issues they encounter, continued assessment needs to take place to:
- Develop a more attractive savings option for first homebuyers, seeing as the First Home Saver Account has failed to reach anywhere near its target (actual accounts opened is c.15,500 compared to the budget of 750,000); and
- Index the First Home Owner Grant to median housing price growth and backdate to its first anniversary, July 2001.
In the lead up to the federal election this Saturday, I, along with homebuyers, renters and all those gainfully employed in the building and finance industry, will watch and wait for any election promises specifically made to address the above.
What do you think about my comments on housing? Do you agree, disagree or have anything to add? Leave a comment below.