Government slammed for lip service on affordability

by Miklos Bolza30 Jan 2017
The national discussion about housing affordability and boosting supply is how politicians make the public think they care without acting, one leading academic has said.
 
“People have been pushing this line that new supply is going to suddenly generate housing affordability outcomes for five or six years, but if you draw a graph of supply and prices they’re going up together,” the chair of urban and regional planning and policy at the University of Sydney, Peter Phibbs, told News.com.au.
 
“If politicians were really interested in putting downward pressure on property prices, there are other things they could do.”
 
Scrapping federally-controlled negative gearing concessions – which Phibbs said was the “single most important” method for combating affordability issues – has been rejected by the new NSW Premier Gladys Berekilian.
 
As well as this, the government could also adjust tax settings by doing away with stamp duty or introduce a more efficient land tax, he said.
 
By focusing on fixing supply, politicians could be seen as taking action while in fact doing nothing at all, Phibbs said.
 
“If you leave it to the market, it’s an incredibly blunt tool. It’s like trying to put a bushfire out with a garden hose.”
 
While the government knows the topic of housing affordability is important for voters, the issue will never be seriously prioritised, he said, especially while politicians act in the interests of owner occupiers and property investors.
 
“What will probably change in Australia is a lot of people that in previous generations would be homeowners, are no longer going to be. We’ll end up with more renters than homeowners and that’s probably when we’ll see some real change from governments,” he said.
 
“But until then, the politics just don’t work.”
 
Related stories:
 
Housing sentiment moderates as crash claims rejected
 
Severe unaffordability due to ‘urban containment’
 
NSW Premier urged to look beyond supply

COMMENTS

  • by Really? 30/01/2017 9:10:36 AM

    Why do the so-called-experts always have no idea about how the industry works, that they comment on.
    Maybe some of them should move out of Sydney, and see the rest of the country.

  • by Jason 30/01/2017 9:31:52 AM

    This classroom expert has no idea. Even the Grattan Institute (a labor policies think tank) says removibg Neg Gearing will only decrease house prices by 1-2%. The AFR just wrote an article on 11 ways to improve affordability. Neg Gearing was a very minor one. More supply built at a fixed price without the developer mark ups. This so called expert has been watching too much Project and not enough Property Couch.

  • by Ryle 30/01/2017 11:57:49 AM

    It's just a Sydney problem so instead applying new rules on an Australia wide basis why not just jack up land tax in NSW. Problem solved and more taxes for the State Government.