A national housing plan must tackle challenges including the housing shortage, the net-zero transition and more, peak body says
The Real Estate Institute of Australia has submitted a proposal to the Department of Social Services, advocating for a National Plan for Housing and Homelessness. The aim is to address the pressing housing issues currently facing Australia, REIA said.
According to Hayden Groves, president of REIA, the plan must tackle various challenges, including the severe housing shortage, an ageing population, geopolitical complexities, the demand for trust and transparency from consumers, and the transition to a net-zero economy.
Groves said that the housing plan is being developed at a time when Australia is also facing declining homeownership rates, a tight labour market, and encounters housing consumers who demand more digital and transparent property transactions.
“It’s in this context we need to consider the factors for the Plan to map out Australia’s housing requirements to 2024,” Groves said in a news release. “This means big picture reform like phasing out stamp duty, which would conservatively introduce an additional 4% of listings back into the sales market; with broader ranging economic and societal benefits to be simultaneously achieved. It was a broken promise with the delivery of the GST and now it’s a housing supply problem. We also need to maintain a laser-like focus on helping Aussies into homeownership. Simply saying it’s too hard and ‘let them rent’ is a complete disservice to young Australians.”
He said that homeownership is a crucial factor in long-term prosperity and stressed the importance of addressing this issue in the National Plan.
Regarding investment, Groves urged strategic consideration of key investment cohorts in the plan, rather than adopting an ideological approach. He noted that Australia's residential property market is valued at $10 trillion, compared to the $3 trillion superannuation industry. Groves emphasised that residential rental assets, estimated at $3 trillion, are primarily supplied by around 2.2 million Australian family investors. He cautioned against placing excessive emphasis on institutional investment and phasing out negative gearing, as it would predominantly benefit large corporations and super funds, rather than individual investors.
Read next: REIA lauds MP’s net-zero tax write-off proposal
“To make the plan effective, we actually need to look at the respective pools of capital and grasp that family investment will be critical in every way in achieving our housing goals by 2034,” he said. “And ask the question: How can we get more family investors into housing over the next 10 years rather than less?”
Groves acknowledged that much of the feedback on the plan tends to focus on immediate concerns rather than the long-term nation-building task at hand. He said that while Australia's demand side of the economy remains strong, with inflation moderating, the Reserve Bank of Australia has indicated potential interest rate increases to control inflation. Additionally, home loans in Australia currently face affordability challenges, with income-to-mortgage ratios reaching their most unaffordable point since 2008. Rental vacancy rates across capital cities remain near historic lows, indicating tight rental market conditions for the foreseeable future. However, rental prices have remained stable over a twenty-year period.
Click here to view REIA’s submission.
Have something to say about this story? Let us know in the comments below.
