Both the Real Estate Institute of Australia (REIA) and the Property Council have appeared before the Federal Standing Committee on Tax and Revenue, each offering their take on how to address Australia’s housing supply shortage.
Labelling the current housing affordability and supply challenge the most significant on record, REIA President Adrian Kelly put forward a three-point plan to address the issue.
The REIA’s three recommendations to the committee are:
- The removal of punitive taxation on Australian homes and households
- Build more houses, and
- Have a national plan for housing between the state and federal governments that is performance based and tasked to a council of ministers
Meanwhile, the Property Council of Australia called on the Federal Government to help smash supply bottlenecks by striking housing supply deals with state, territory and local governments.
They propose the Commonwealth should make Federal funding available for social and affordable housing, contingent on the achievement of key housing supply targets.
Property Council Chief Executive Ken Morrison said the industry would like to see the Federal Government incentivise supply, zoning and planning reforms to support states in delivering their housing obligations.
“All existing arrangements should have metrics attached an expert taskforce should be formed to create a National Competition Policy-style payments scheme for states that deliver on their long-term obligations,” he said.
Appearing before the committee on Thursday, the REIA’s Mr Kelly said contrary to what some might believe, the real estate industry is strongly of the view that the Australian dream of home ownership should be accessible to everyone.
“We take no comfort in the current record prices we are seeing, because they are primarily driven by a lack of supply,” Mr Kelly said.
“We would rather see 10 buyers happily enter the market through the availability of 10 suitable homes, than 10 buyers outbidding each other for one available home.”
Mr Kelly said that REIA’s three recommendations had been framed in the context of directly addressing inefficient housing taxes and increasing supply.
“We have recommended a national focus on stamp duty reform and getting rid of this antiquated tax,” he said.
“This is a huge opportunity to improve both affordability and supply across the board, and as we transition out of the current phase of the COVID-19 pandemic and kick-start the economy.”
Mr Kelly noted stamp duty had often fallen into the too-hard basket, but reform should be front and centre of the committee’s findings.
“We have recommended several different ways to better utilise existing housing stock and encourage increased listings to improve supply in the current cycle,” Mr Kelly said.
“This includes looking at new policy levers to encourage rightsizing as Australia’s population ages.
“New homes will need to be built. This will need to be prioritised as Australia’s borders reopen and international immigration resumes. This is an area that will present an increasing challenge unless we plan for it now.
“Lastly, the best possible thing the Federal Government can do is put in place a national plan for housing that address supply, affordability, tax reform and takes true leadership in addressing a problem that has existed in Australia for many years,” he said.
Mr Morrison agreed housing affordability could not be addressed without dealing with supply.
“As our borders reopen and our population begins to grow again, we will need to unlock new housing supply if we are to help support housing affordability outcomes for the community,” Mr Morrison said.
“Housing affordability is a nationwide concern and while most of the levers to address this sit with state and local governments, the Federal Government can be a bigger part of the solution.”
Mr Morrison said housing supply deals would help overcome infrastructure and planning blockages to deliver new housing and apply downward pressure on prices.
“States like NSW and Queensland are failing to produce enough opportunities to build enough new homes within reach of enough first home buyers and Federal help could break this deadlock,” Mr Morrison said.
“With net overseas migration recommencing as international borders reopen, this is the right time to undertake some of the bold reforms needed to unlock sections of land in growth corridors of our largest cities and towns.”