Kate Chaney (Curtin, Independent) Share this | Hansard source

It goes without saying that access to housing is one of the most concerning issues for Australians today. Every day, we hear about the rising cost of property, the impossibility of finding affordable rentals and the fear of never being able to afford to own a home. It's affecting our kids and grandkids disproportionately. It was raised with me last week at UWA O-day by uni students who lament the fact that they can't see a pathway to homeownership for themselves personally. I hear from parents and grandparents who can see that their children and grandchildren will not have the security of homeownership that they enjoyed without their financial support, and even then they won't be able to live anywhere near them.

Put simply: housing prices are too high. Housing prices have increased from three to four times the average income to seven to eight times the average income since 2000. Australian is the third-least populated country on earth but contains second-most expensive housing. These exorbitant costs exacerbate inequality and undermine social cohesion. This phenomenon redistributes rather than creates wealth. Australians' wealth is now tied up in an unproductive asset, making it bad for intergenerational fairness and bad for the productivity of our economy.

A 2023 Australian Housing and Urban Research Institute report notes that some young people simply will not attain homeownership over their life cycle, particularly if they're first home buyers who are unable to clear the ever-growing hurdle of saving for a deposit. It will keep getting worse for every generation unless government policies change. Alan Kohler recently summarised the Australian housing situation as high demand which is impacted by interest rates; immigration; tax breaks for investors and homeowners; grants to first home buyers; and suppressed supply by social housing, underinvestment, sprawl and planning.

I acknowledge that the government is making some attempts to address housing issues at a national level. In attempts to boost supply, last year this parliament passed the Housing Australia Future Fund, which I supported while noting that a lot of work still needs to be done. The government has also increased funding for the National Housing Accord and the Social Housing Accelerator and has introduced incentives to boost the supply of rental housing by changing arrangements for investors in build-to-rent accommodation. Increasing housing supply is essential and more needs to be done to achieve it.

Acknowledging the magnitude of this crisis and the number of people affected, last year I held two community housing forums, attended by a total of 180 Curtin constituents. The first housing forum, in October 2023, was about listening to a fairly representative mix of renters, homeowners and mortgage holders from across the Curtin community. Together we identified the top three issues and top three goals for housing in Curtin. I then called on the community to submit their policy ideas towards these goals. We had a huge range of suggestions from simple ideas that have been around for years to detailed and nuanced policy proposals. Our second Curtin housing forum in November 2023 involved a panel of experts evaluating these community policy ideas and assessing other proposed policy suggestions as well.

Through this process, the Curtin community identified our top three housing issues as a lack of affordable housing to rent and buy, a lack of diverse housing options and a tax system with the wrong incentives. Our top three long-term goals for housing were identified as secure long-term housing available for all, policies to incentivise appropriate homes and integration of social and affordable housing into our communities. So my community has identified supply as the main issue and, in particular, noted the need for more housing options for social affordable housing.

Is this bill the right action? It's broadly accepted that the current housing problem is a supply problem and needs to be addressed with supply levers. This Help to Buy scheme is not about supply. It's about demand. It's about helping eligible low- to middle-income owners to purchase new or existing homes with as little as a two per cent deposit by accessing equity from the government. Housing Australia will contribute to part of the purchase price of a house or apartment, and the Commonwealth will become a part owner of the property. Help to Buy would be open to 10,000 Australian applicants each financial year and would be administered by the states, which would receive an allocation according to population. For WA, I would imagine this means approximately a thousand shared equity loans per year. The Help to Buy program will run alongside the home guarantee scheme and is intended to support Australians who would otherwise not be able to purchase a home.

So is it a good scheme? Are shared equity home loans a good approach? Let's be clear. It doesn't create more homes. But it does make a particular target group of potential buyers more competitive in the fight for the limited homes available. I believe there is a place for shared equity schemes as long as we're very clear that they're addressing equity, not a housing shortage. They reshuffle the priority of different people in the line, rather than reducing the number in the line or increasing the houses available.

I'm fortunate in my previous career to have worked on an innovation project with the excellent team at WA's Keystart. Keystart is one of three state organisations, along with New South Wales and Victoria, that currently administer shared equity home loans. Keystart is an established part of WA social and affordable housing scene. It was established in 1989 and administers shared equity home loans on behalf of the WA Housing Authority as well as provides low deposit home loans, access home loans, Aboriginal home loans and rural home loans. I understand that the Help to Buy scheme was in part modelled on Keystart's shared-equity scheme, with some updates made in response to their lessons learnt. My conclusion, from discussions and interactions with Keystart, is that shared-equity schemes are an important part of a national housing assistance package, but I understand that a number of concerns have been raised about these types of schemes. There seem to be four main issues. Firstly, shared-equity schemes may contribute to further growth in house prices if they're of sufficient scale. Secondly, they're expensive and so have limited scalability. Thirdly, they may encourage those for whom homeownership may not be the most suitable option to take on undue financial risk. Lastly, they may divert resources from supporting people who are homeless or at risk of homelessness. I want to consider how these concerns might apply to Help to Buy.

First is increased house prices. The Productivity Commission has said that, unless it's well targeted, assistance to prospective homebuyers presents too great a risk of increasing housing demand and, consequently, house prices. We've seen this with previous homebuyer schemes, like first home owner grants. Last year about 62,000 houses were sold in WA, and the median Perth house sale price was $590,000. If, as assumed, WA would receive an allocation of a thousand shared-equity opportunities per year, that would only constitute about six per cent of WA house sales. It seems unlikely that increasing the buying power of a thousand potential buyers would have a material impact on house prices, but it's worth noting that this is not a zero impact. It will provide some upward pressure, but the scheme will make a significant difference to the life of targeted recipients. While the exact thresholds are not being set in legislation, we expect it to be targeted to people with an income of $90,000—or a couple with $120,000—buying a home that costs less than $600,000, which is close to the median Perth house price. While I'm genuinely concerned about the inflationary impacts of injecting more grants into the economy, if this is well targeted it should be unlikely to cause material inflation.

The second concern is about cost. Because shared-equity schemes are capital intensive, they're not scalable. Obviously, you can't complain about both these things at the same time. A scheme will either be inflationary, if it involves a significant number of buyers, or too small and not scalable. But this is an expensive way to weight the scales in the race for limited available homes. The thousand lucky Western Australian recipients will benefit, but there are lots of people affected by the current housing shortage who will not benefit, and the capital tied up in the program—nearly $2 billion—is significant. The Commonwealth government will continue to own part of these people's homes until they sell or refinance. Keystart's experience shows that about half of the shared-equity borrowers buy out the government share within nine years, meaning that half don't, so this is a long-term commitment from the government.

Thirdly, some commentators have suggested a shared-equity scheme might encourage people to take on undue risk. Obviously we haven't yet seen all the details of how the Help to Buy program will start, but state equivalent schemes like Keystart show that about half of the borrowers buy out the government by the nine-year mark. They might sell the home or refinance. It seems that in a time of increasing property prices this is fairly low risk, but if prices were to fall it's quite possible that the government could be seen to be responsible for committing people to a negative equity situation. But there's always this risk in investing, and that risk is being borne by the government as well as the borrower. One advantage of a shared-equity scheme over a low-deposit scheme is that it addresses the deposit and serviceability barriers, while a low-deposit scheme only addresses the deposit barrier. It also worth noting that shared ownership disproportionately helps women own their own homes, with 66 per cent of Keystart shared-equity participants being women. This is important given that older women are one of the fastest-growing groups represented in the national homelessness population, with a rise of more than 30 per cent in the last five years. Research based on the most recent census has found that close to a quarter of a million Australian women aged 55 and older are at risk of homelessness.

Finally, concern has been raised that investments in shared-equity schemes will divert resources from homelessness services. As I said at the outset, this Help to Buy scheme is not a silver bullet or a solution to the housing crisis; it's part of a web of what needs to be a comprehensive and well-resourced national housing plan. Resources should absolutely continue to be allocated to housing and homelessness services. The government's currently consulting on a national housing plan—the first plan since 1946—but the issues paper for the consultation focuses solely on a social security perspective. It doesn't refer to any tax reform. I urge the government to be bold and brave and include an economic perspective, not just a welfare perspective, in the national housing plan.

On balance, I'll be supporting this bill. It will give relief to a small number of targeted low- to middle-income homebuyers. It will not, however, solve Australia's housing crisis. It's a small puzzle piece in a much larger problem which needs longer term systemic reform.

I want to speak a bit about the need for review and oversight. I note the bill has a three-year review clause. This is an important inclusion in order to understand the impact the scheme has on the housing market and the economy. I'm also concerned about the amount of ministerial discretion in this bill. The eligibility thresholds are not being set in legislation, and it's a large amount of money—nearly $2 billion—to allocate within this broad discretion. I would prefer to see these eligibility criteria overseen by parliament, while I also recognise that flexibility may be needed to adjust how it is working. So I would support that threshold being made a disallowable instrument so it does have that parliamentary oversight.

I would also urge the government to ensure that the panel of lenders are carefully chosen and care's taken to ensure that they have requisite skills and capacity to deliver this scheme well. Evidence shows that the highest risk time for falling into arrears is between three and five years after taking on a loan. This is often triggered by life changes—a break-up, loss of job or illness. Lenders need to be equipped to respond to this risk of financial hardship with support structures to identify those most at risk of defaulting on their share of the loan, to communicate clearly how shared equity works and to help borrowers take timely action if they find themselves in financial hardship. It's essential that the panel of lenders have well-understood standards for delivering these shared-equity loans and clearly articulated roles for a potentially more vulnerable cohort.

While this bill will not create more homes or fix the housing crisis, I commend it to the House and look forward to seeing at least 1,000 Western Australian recipients helped to realise their goal of homeownership.

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