Craig Thomson (Dobell, Australian Labor Party) Share this | Hansard source

I want to talk about affordable housing in Australia. The real problem for households with mortgages in Australia is not just interest rates but, more fundamentally, the size of the mortgage. This means that any small movements in mortgage rates have a great effect on people's ability to make their repayments. The size of mortgages has risen as house affordability in this country has plummeted. Since only 2006, the average mortgage in New South Wales has grown from around $272,000 to over $365,000 in 2011. This is a 34 per cent increase, which is close to the national average of 32 per cent.

Families have moved to the Central Coast, western and south-western Sydney so that they can afford to buy a house which 20 years ago they would have bought much closer to their jobs and to the CBD. Often these areas, like my electorate, have issues with a lack of infrastructure to facilitate the growing population. Much of the action on housing affordability has been on the cost of financing housing. We all now have an obsession with interest rates, and we wait for the prophet-like pronouncements from the Reserve Bank governor each month on the level of interest rates. The government has acted on issues to do with increasing competition between banks. However, this ignores the cause of large mortgages. It is the supply side with structural impediments forcing up the price of housing and hence the size of family mortgages. It is also the supply side that is important if we want to avoid the property bubbles that saw the US, Spanish and Irish economies so badly affected in the GFC.

The Labor government, upon election in 2007, and in the most recent cabinet reshuffle, has a portfolio for housing. This is important. However, successive governments, including this government, have not acted in relation to a national housing plan aimed at making housing more affordable in this country, and I am suggesting two areas that need to change to address this.

Firstly, the way in which land is released for development is fundamentally flawed. We have in place a system where incentives are built in to drip-feed the release of land to maximise the development fees payable to state and local governments, rather than looking at a national housing stock and areas of supply. It is currently in the best interests of both local and state governments to have restricted releases of land to help push up the development fees as demand exceeds the supply of land. This needs to change. Australia should have a national housing plan which streamlines the release of land and targets both the amount and the areas to be released in the interests of having supply meet the demand. This would keep house prices down.

Secondly, a national infrastructure plan based on land supply needs to be integrated into this plan. Hospitals, roads, water supply, utilities availability, public transport and community facilities need to be funded and approved as part of a national land release plan so that not only is there affordable housing but it is attractive to homeowners to move there. Unplanned urban sprawl and high mortgages will be a major problem in Australia if issues of supply continue to be ignored. A national housing strategy is the answer and it is one that I implore this housing minister to adopt.

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