New blueprint laid out for housing affordability

by Miklos Bolza02 May 2017
While tackling housing affordability is an important conversation to have, it is important to define exactly what problems are being examined, said Susan Lloyd-Hurwitz, chief executive officer and managing director of real estate group Mirvac.

Speaking at the Committee for Economic Development of Australia’s (CEDA’s) 2017 NSW Property Market Outlook in Sydney on Friday (28 March), Lloyd-Hurwitz urged caution around government policies that treat the Australian housing market as one homogenous whole.

She outlined a six-point plan that focused on increasing housing supply for owner-occupiers to the market in a faster, cheaper manner.

1) Better planning reforms

“The property industry is looking for radical planning reform tackling taxes & levies, faster release of land, faster approval of rezoning & development opportunities, more co-accessible development, incentives to developers to fast-track supply of affordable housing, and greater acceptance of density done well,” she said.

This would allow the industry to deliver more housing with greater speed and flexibility in order to meet sustainable housing goals and create a city for everyone.

“We have got to get better at planning. Collaboration across all levels of government, not-for-profits and private sector is required.”

2) Reinstatement of the National Housing Supply Council

The National Housing Supply Council, which was abolished in 2013, should be brought back as it served a critical role providing accurate data which was used to form sound housing policy, Lloyd-Hurwitz said.

“It’s pleasing to see both sides of the Federal Government and Opposition embracing this idea.”

3) Roll-out successful state initiatives federally

Any state-based housing initiatives which have shown promising results should be rolled out nationally, she said.

“For example in Victoria, stamp duty has been abolished for first home buyers on homes up to $600,000 and a shared equity scheme has been introduced. In NSW, we have a similar program where stamp duty doesn’t apply to purchases of new homes up to $550,000.”

Lloyd-Hurwitz also pointed out that the Keystart initiative in Western Australia which includes low deposit home loans could be made into a national program as well.

4) Added government support

The government could also lend its support to insurance, finance and rental assistance, she said. For instance, a nil-fee government-backed insurance scheme could be implemented to allow for reduced deposits and shared equity schemes.

“The affordable housing bond and aggregator model proposed by the Federal Government and supported by the Opposition is a sound concept,” Lloyd-Hurwitz said. “The National Rental Affordability Scheme or similar rental assistance scheme should be reinstated to assist low income families provide more choice to renters.”

5) Creation of a build-to-rent sector

The formation of an institutional build-to-rent sector would deliver vast-scale, well managed rental stock to the market, she told the audience.

“This would provide another viable, secure housing choice. We’re expecting institutional money ready to invest in this asset class but in its infancy it does need support from state and federal government through targeted incentives to help produce that institutional-scale capital into the build-to-rent sector.”

6) Reconsider current tax burdens

Lastly, it is important to rethink the tax burden imposed on the new supply of housing, Lloyd-Hurwitz said. For instance, up to 50% of the cost of a single block of land is made up of added taxes, charges and regulatory costs.

This includes stamp duty which has a number of negative market impacts such as being a hurdle to first home buyers and a hamper to property transactions for people looking to up or downsize their current properties.

“Transitioning away from stamp duty is not simple at all. In NSW at $8bn, it is the state government’s single largest source of revenue, but it is a conversation which should be had,” she said.

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