The worst housing approvals numbers in two years should serve as a wakeup call as governments gathered for a housing affordability summit in Canberra on Friday.
Last week, federal Treasurer Scott Morrison and his state and territory counterparts met to thrash out options for easing housing affordability pressures around Australia.
On the table for discussion were the recommendations of the Affordable Housing Working Group report, which identifies planning rules, local councils and taxes such as factors affecting the supply of affordable housing.
Property Council chief executive Ken Morrison says Australia’s dire housing affordability is a direct consequence of housing deficits in our cities.
The federal government’s own data reveals a housing shortage of around 200,000 dwellings, Morrison says.
“We will need an additional 100,000 new dwellings a year for the next 15 years to keep up with expected new demand,” he says.
Meanwhile, the latest data from the Australian Bureau of Statistics has revealed October saw a fall in housing approvals of 12.6 per cent in seasonally-adjusted terms – the fourth consecutive monthly fall and the worst result since September 2014.
Ken Morrison says all levels of government must work together to improve housing affordability.
“State governments alone collect over $20 billion in stamp duty every year. In NSW and Victoria, purchasers are now paying in excess of $30,000 on stamp duty for an average home.”
Reform of planning laws would also remove unnecessary delays and costs which drive up the costs of all new dwellings, while new state government taxes on foreign investment should be wound back to increase supply.
Morrison also says the federal government has a role to play with by incentivising state and territory governments to undertake planning reform.
“Deloitte Access Economics estimated such an approach could provide a $3 billion boost to the economy as well as locking in more housing supply.”
But political parties must resist the “policy mirage” of negative gearing, Morrison warns.
“Scrapping negative gearing would create mayhem for investment and produce just a 0.49 per cent decrease in house prices. The costs to renters and the economy will be worse than any small benefit to home buyers.”
Source: Property Australia