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

The housing crisis has been building for decades and now it's hitting Australians hard. At my Curtin housing forums a representative mix of constituents recognised our need for affordable and diverse housing. Housing prices in Australia are too high. They've increased from three to four times the average income in 2000 to seven to eight times now, so housing is half as affordable as it was 20 years ago. Australia is the third-least populated country on earth but contains the second-most expensive housing. This is bad for the country in a number of ways.

Generations of young Australians are being held back by the cost of shelter. They're living with their parents for longer while saving, delaying life decisions, taking out huge mortgages, borrowing or begging from their parents, living further out from their communities or renting long term. Since 2000, household debt has increased from 0.5 times to two times the average disposable income. Declining home ownership, particularly for millennials and gen Z, creates a lack of security. Increasingly, wealth is determined by inheritance, not by education and hard work. This also undermines the proper functioning of our economy. It redistributes rather than creates wealth. It focuses wealth creation in an unproductive asset. In many ways it's meaningless to hold wealth in a house when housing is so expensive. Everyone needs a place to live, so you can't swap the wealth you hold in your house for anything else.

This situation is only going to get worse for every generation unless government policies changes. The fundamental problem is that successive governments have realised that no-one complains when the value of their house increases. Creating policies that increase the value of housing is politically popular, so both major parties keep throwing fuel on the fire. In about 2000 we changed tax incentives in an attempt to increase housing supply for renters. By allowing tax deduction against other income for losses incurred from investment property, then only paying tax on half the gain, government policies made property the best means of wealth creation. But now, with rental vacancies below one per cent, we can see that it didn't work to increase housing supply.

Successive governments have also thrown fuel on the fire by stimulating demand through grants to first-home buyers. The opposition's current policy on housing seems to be to allow people to access their super, adding more to demand, which will only drive prices up, on average. We use interest rates to manage inflation, which means mortgage holders bear the entire burden of the adjustments we make to our economy. If you own a house outright, changes in interest rates affect you much less.

There are a lot of different levers that people think we should pull to address the housing crisis, both supply and demand: tax reform, building more social housing, limiting Airbnb and foreign buyers, changing zoning rules, incentivising infill, providing protection for renters or linking immigration targets to housing growth. The hard truth is: no matter which levers we pull to get there, success in housing policy would make housing more affordable. This means lowering or at least pausing house prices while wages catch up. No-one who owns a house wants to hear this, but that's the reality.

Sixty-five per cent of dwellings are owned, and 35 per cent are rented, so two-thirds of the population is financially incentivised to favour limiting the supply of houses to increase value. Any genuine attempt to address housing affordability would need to go against the financial interests of 65 per cent of households. This is politically very challenging, and neither major party will say it out loud. But we desperately need a clear direction on housing policy. Does the government want house prices to increase, stay the same or decline? What's the government actually trying to achieve? It's essential that this fundamental question is addressed in the promised National Housing and Homelessness Plan, and, when that plan is ready, before criticising it, the opposition needs to be clear about what alternative it is proposing. Unless we can get a clear answer out of both major parties about how affordable housing should be, we can't pick the right suite of policies to deliver that goal.

Should the average house costs four times the median income like it was 20 years ago or eight times like it is now? How long should it take us to get to this target? If we don't have an affordability target, supply policies will continue to work against policies that drive demand and monetary policy and bank marketing. So I challenge both the government and the opposition to answer one simple question in the lead-up to the next election: how affordable should housing be? This requires courage and long-term thinking, neither of which we've seen much of lately.

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