Mainstream housing will help renters and home buyers: COAG report

04 June 2010

The Urban Taskforce today welcomed today’s release of an affordable housing report from the Council of Australian Government’s Reform Council.

The report declares that “housing affordability [should] be addressed not just through the traditional forms of housing assistance, but by improving the operation and effectiveness of the mainstream markets for renters and home buyers”.


The Reform Council says “there is strong evidence of a disconnect between supply and demand in the housing market, resulting in a shortage of supply that has led to an increase in housing costs”.


The Urban Taskforce’s chief executive, Aaron Gadiel, said the report made it clear that the housing crisis can only be solved by tackling the systematic problems preventing housing supply from meeting the community’s needs.


“Our national undersupply of housing is 178,000 homes – and counting,” Mr Gadiel said.


“The undersupply is creating social and economic problems across our community.


“These problems are spelt out in today’s report they are too serious to adequately tackle with niche schemes or welfare approaches alone.


“What we need is a dedicated program of microeconomic reform to make state planning systems functional again.” Mr Gadiel said that renters were always the first victims of a shortage in housing supply.


The report found that, nationally, 37 per cent of low-income renter households were in rental stress”that is, were paying more than 30 per cent of their gross household income in rent.


The proportion in NSW was significantly higher, with almost half of all low-income renter households”46 per cent”in rental stress.


Mr Gadiel said that 28 per cent of homes sold were affordable to moderate-income households.


“Victoria which has had Australia’s most robust supply of new housing – had the highest proportion of homes affordable to moderate-income households – 41 per cent,” Mr Gadiel said.


In Western Australia, where the housing supply has struggled to keep up with the demands of the mineral resource boom, a very low proportion of homes” just 10 per cent”were affordable to moderate-income households,” Mr Gadiel said.


The proportions of homes affordable to moderate-income households in Perth and Brisbane were very small”only 6 per cent and 10 per cent, respectively. Melbourne had the highest proportion of affordable homes (39 per cent), with Adelaide (32 per cent) and Canberra (32 per cent) also in the more affordable band.


Affordability was consistently higher outside capital cities. Nationally, there was a difference of 4 percentage points between the proportion of homes affordable in capital cities and other areas. The gap was much wider in Western Australia (16 percentage points) and Queensland (12 percentage points).


Mr Gadiel said that the report found that home ownership rates are fairly constant across income groups. “Australia’s egalitarian ethos has traditionally created opportunities for the great bulk of our society to enjoy the benefits of home ownership.


“As the report says, home ownership has financial benefits such as lower real housing costs over a lifetime and wealth accumulation through a growth asset.


“But, owning a home can also bring social and cultural benefits such as a sense of family and belonging, security, control and privacy, and is linked to improvements in health and education.


“It’s crucial that local, state and federal government back the aspirations of those who want to own their own home rich or poor.


“That can only happen though, if we get the necessary reforms to our state planning systems.


“This means greater respect for property rights, lower developments levies and greater flexibility to respond to housing, workplace and shopping needs of communities.”


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.


The construction activity made possible by property developers contributes $78 billion to the national economy each year and creates 849,000 direct jobs.



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