Housing inquiry proves bipartisan national plan is needed

21 March 2022

"REIA has welcomed the handing down of the Inquiry into housing affordability and supply in Australia report by the Standing Committee on Tax and Revenue which reported 16 intersecting recommendations for the Federal Government’s attention."

The Real Estate Institute of Australia (REIA) has welcomed the handing down of the Inquiry into housing affordability and supply in Australia report by the Standing Committee on Tax and Revenue which reported 16 intersecting recommendations for the Federal Government’s attention.

REIA President Hayden Groves said that housing has become a political football at a time housing affordability is decreasing, inflationary pressures are rising and listings across the country remain limited.

He said the fundamentals of supply, affordability and the great Australian dream of home ownership need bipartisan support across Australia.

“The COVID-19 pandemic allowed us to look at housing in an entirely new way and give it the attention it deserved.

“At the height of the pandemic, homelessness challenges were addressed immediately and Australia’s 40,773 strong property management workforce stepped up and managed an imposed rental eviction moratorium.

"State and Federal Governments introduced 17 programs to assist first home buyers achieve their dream of owning their first home and they returned to the market in droves,” Mr Groves said.

All levels of government need to be aligned

REIA supports the majority of the 16 final recommendations which directly related to the Institute’s three recommendations to the Housing Inquiry to encourage housing supply and affordability.

Critically, it identified there is no doubt that there is a gap in government coordination and an overwhelming need for all levels of government to be better aligned and coordinated on all aspects of housing in Australia

Mr Groves said REIA advocated for policies to enable supply, to build more houses and to get government right, including phasing out stamp duty on a coordinated national basis.

“All three of these recommendations have been met within the Committee report and deliver a roadmap to significantly increase housing supply and therefore affordability through policy reform,” Mr Groves said.

National approach to stamp duty needed

REIA supports the approach for a national strategy on stamp duty.

Mr Groves said a coordinated national approach was needed to phase out this antiquated tax that prevents Australians from moving houses and getting new jobs.

“Stamp or transfer duties now total on average four per cent of the cost of a home with a recent survey indicating that over 90 per cent of first home buyers say this is a major deterrent to buying a home.

"Consultation is needed as to whether this is captured by a land tax or a broader based tax.

“This will require leadership from all of Australia’s State and Federal Treasurers to achieve what the introduction of the GST promised to do and failed: axe the tax,” Mr Groves said.

In 2021, the National Housing Finance and Investment Corporation provided an excellent case for change in their paper Stamp Duty: Benefits and Challenges outlining key benefits to stamp duty reform. This included increased mobility, inefficient use of housing stock, large economic cost, volatile revenue source and inefficient base.

Mr Groves said that productivity incentives and innovations for State Governments to enable supply are greatly needed as is a review of the Build-to-Rent sector and moves to provide more Rent-to-Buy stock for Australia’s key workers.

“The complexity and breadth of the 16 recommendations just reinforce the need for a national plan for housing affordability and supply with both Federal and State Governments held accountable.

“It is a myth that private sector and social and affordable housing cannot coexist. The reality of the matter is we need increased social and affordable housing stock and increased private stock with up to 1.6 million new homes needing to be built by 2030.

“They are not mutually exclusive and in fact need to be considered together in order to achieve the right supply mix for all so every Australian has a home,” Mr Groves said.