Indigenous home ownership highlighted in PM Abbott's housing affordability inquiry submission

To achieve the Commonwealth Government's priorities of getting children into school, adults into jobs, and making communities safer, the Department of the Prime Minister and Cabinet (PM&C) supports Indigenous housing and home ownership.

Living in a stable environment has proven an efficient way of achieving these priorities.

In the submission to House of Representatives, Standing Committee on Economics Inquiry into Home Ownership, the PM&C named a few topics that affects Indigenous Australians more than others like the administration and use of Indigenous land, availability of finance, employment opportunities and limited financial understanding and exposure to home ownership.

"The Government’s priorities include getting Indigenous Australians into jobs to encourage economic development and advancement for Indigenous people. Regular and increasing incomes will enable more Indigenous people to afford to buy their own homes and enjoy the benefits home ownership can bring. 

"The national rate of Indigenous home ownership is 36%, compared to 68% for the Australian population generally. In order for the rates of Indigenous and non-Indigenous home ownership to reach parity, approximately 65,000 new Indigenous households would need to enter home ownership."

More information can be found in the IBA submission article here.

"The rate of remote and very remote Indigenous home ownership is lower than the national rate of Indigenous home ownership, at 18% in 2011. According to the 2011 Census, the rate of Indigenous home ownership slightly increased between the 2006 and 2011 Census. 

"Lower median incomes and higher rates of unemployment than other Australians are key factors affecting Indigenous Australians’ ability to own their own home. In 2011, the average disposable income for an Indigenous Australian was 70 per cent of the income earned by a non-Indigenous Australian.

"The proportion of Indigenous Australians aged 15-64 years who are employed fell from 53.8% in 2008 to 47.5% in 2012-13. At the same time, the proportion of employed non-Indigenous Australians rose, leading to the employment gap between Indigenous and non- Indigenous working age people widening from 21.2 to 28.1 percentage points. 

"Under the National Partnership on Remote Indigenous Housing (NPARIH), signed in 2008, the Commonwealth committed $5.5 billion to the construction and refurbishment of social housing in remote Indigenous communities. 

"Across Australia, 2,698 new houses and 7,071 refurbishments and rebuilds were completed as at 30 April 2015. Under the NPARIH, the Commonwealth’s investment in remote Indigenous housing has been used to leverage home ownership, for example by: 

• jurisdictions agreeing to progress resolution of land tenure for remote Indigenous land to facilitate home ownership and economic development opportunities; 
• encouraging states to implement and support sale of social housing policies for existing tenants. A carefully-planned sale of social housing stock can boost the supply of properties in communities, help create a market and diversify housing options; 
• funding elements which support home ownership, such as cadastral surveys to define lots; and 
• focusing on regularising tenancy arrangements for remote community residents, which helps develop tenants’ readiness to maintain their own houses if they become home owners. 

"The Government announced in the 2015-16 Budget its intention to replace the NPARIH with a new Remote Indigenous Housing Strategy (the Strategy) over three years totalling $1.1 billion. Home ownership objectives will form part of the new Strategy. Details of the new Strategy are currently being negotiated. 

"Current administration and use of Indigenous land can be a barrier to Indigenous home ownership. Only certain tenure types offer sufficient security of title and transferability for a lender (generally, IBA) to provide a loan. For example, in the NT, where approximately 50% of land is Indigenous-owned,six communities have agreed 99-year township leases (under section 19A of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (ALRA)) which offer sufficient transferability for home ownership. 

"In these communities, the head lease is held by the Executive Director of Township Leasing and there can be long-term residential subleases. As an alternative to township leases, individuals can take out leases under section 19 of the ALRA in order to pursue home ownership. 

"However, unless these leases are taken out in communities where other factors are suitable for home ownership, such as where a real estate market exists, it is unlikely lending secured by this land will be possible. In Queensland, anecdotal evidence from some communities suggests while people are interested and apply to purchase social housing, the complex process means many people drop out before becoming home owners." 

According to the 2011 Census, 70% of people rely on social housing in remote communities. Because in most of these communities social housing is the only form of housing available, there are few or no houses to buy building a market gap in these areas. Lending and borrowing becomes a higher risk, which discourages commercial banks from lending in these areas.

"The recently released White Paper on Developing Northern Australia (which can be downloaded here) sets out the Commonwealth’s vision for developing the potential of the north. The White Paper reflects the importance of Indigenous people and Indigenous land to this development and announced directions for reform which could support more home ownership opportunities on Indigenous land in the future."