Housing affordability – the government’s stance and implications for all Australians

EXPERT OBSERVER

As housing affordability begins to impact more Australians, it’s crucial that we understand what our government is doing to address the rising cost of housing. A return to government provides continuity around some policy items as well as a platform for new initiatives.  

It’s important to note that housing affordability affects people differently and the government will need a range of approaches in order to help more Australians. Here are some of the Coalition Government’s policy items around housing affordability – both existing and new.

The most publicised policy lauded as an attempt to lower housing prices and address housing affordability by getting more buyers into the market has been the launch of the First Home Loan Deposit Scheme, which is capped at 10,000 borrowers.

This scheme allows some borrowers to bring forward their purchase of a home, without having to pay mortgage insurance and using a deposit as low as 5 per cent. While this policy will have a significant impact on housing affordability for some buyers it’s not without risk.

Borrowers need to be careful that they can repay the loan when interest rates rise and that they don’t get themselves into financial stress by taking on too much debt, lured by a scheme that may not make housing cheaper or more affordable.

The government’s announcement of the Hon Michael Sukkar MP as Minister for Housing – while not a policy as such – is good news for housing affordability. We now have a portfolio dedicated to housing, which we haven’t seen in recent governments. 

It certainly helps that Sukkar is also our Assistant Treasurer. By combining these roles, we see a potential acknowledgement that housing plays an important economic role in Australia, for individuals but also for the economy.

The Australian Housing and Urban Research Institute recently commissioned work around this issue, as have others. So there’s a growing awareness that housing is a much broader economic influence. 

The appointment of the Hon Luke Howarth MP as Australia’s first Assistant Minister for Community Housing and Homelessness is particularly to be applauded. It may signal a focus on the crucial roles played by community housing providers (CHPs) and specialist homelessness services in the housing affordability puzzle.

In its previous term, the Government launched the National Housing Finance and Infrastructure Corporation (NHFIC). This entity enables CHPs to access loans at a discounted rate in order to build affordable and social housing.

It’s encouraging to see the NHFIC is being continued in this term. Yet, while allowing easier borrowing for CHPs is a positive step, this won’t make it easier for them to compete for land on the private market.

That’s where the Government’s recent announcement that more Commonwealth land, including defence land will be released for housing development holds great promise for CHPs and Australians who rely on access to affordable housing. 

If the government can release land for housing development with a higher proportion set aside for affordable housing – up to 30 per cent – then more Australians will be able to access more affordable rental properties.

It’s crucial that this is required by the Commonwealth when they’re selling the land. It has to be part of the release – as opposed to simply selling to the highest bidder in the market. Minister Sukkar has already flagged that he is expecting sales of Commonwealth land to include social and/or affordable housing – a very welcome direction.

This requirement would also help to forge more partnerships between CHPs and developers. By working together to develop more affordable and market housing on the same site – through tenure blind design to ensure all housing is built to the same quality – this initiative could have a very real impact on areas experiencing affordable housing shortages.

We know that supporting people into great housing helps them stabilise their lives and means we save on all sorts of costs further down the line. These initiatives are promising and to be encouraged if the Government is committed to making housing more affordable. 

Another policy to be applauded is the government’s City Deals initiative, a three-way arrangement between Federal Government, the relevant State Government and local government in an area that’s in need of economic development.

It’s important that the City Deals recognise housing as a critical piece of infrastructure in the same way as roads and hospitals. This is another policy level which could help to address housing affordability in earnest.

Finally, in 2018 the government launched The National Housing and Homelessness Agreement, which requires all signatory states and territories to have their own housing strategy. This act alone shows we’re starting to see a more combined effort on housing, which is essential if we’re to ensure all Australians can live in safe and affordable housing. 

Rachel Trigg is a director at Urbis.