Tanya Plibersek (Sydney, Australian Labor Party, Shadow Minister for Human Services, Housing, Youth and Women) Share this | Link to this | Hansard source

I rise today to speak on the issue of land and housing prices. I was curious to see that the Treasurer, once again yesterday, blamed land release for the high cost of housing in Australia. It is important to put this issue to bed. Certainly land release may be an issue in some areas in some parts of the country, but it is not the reason that housing costs are as high as they are at the moment.

If you look, for example, at my home state of New South Wales, and compare the relative impacts of land costs, federal taxes and interest rate rises, you will see that interest rate rises have disproportionately affected the very high cost of housing. There are ample ‘greenfield’ land stocks currently available in New South Wales, including enough zoned and serviced land for 33,000 new homes. Most of them are not subject to the state infrastructure levy. The New South Wales government is committed to increasing the number of zoned and serviced home sites to 55,000 over the next two years, establishing a land supply CEO’s group to resolve issues around land supply, and funding ‘flying squads’ to work with local councils to deal with bottlenecks in land supply.

The national figures relating to land supply show over 150,000 blocks available at the moment which are owned by developers. Listen to what the people who are responsible for this area have to say. Michael McNamara, the Operations Director of Australian Property Monitors, says:

Demand for housing is extremely flat and developers haven’t been able to sell the projects that they’ve got, let alone launch new projects—so we totally dismiss the argument that releasing more land on our city’s outskirts is going to affect affordability.

Peter Icklow, the managing director of a major Sydney developer, Monarch, said:

Every time I see John Howard blaming land supply [for low affordability] I see red because it’s just not true—there are literally thousands of lots available.

What is stopping people from building homes? It could be that we have seen four interest rate rises since the last election, that the amount that people are borrowing to buy a house today is so much greater than it was even 10 years ago, and that any tiny increase in their interest rates is having a devastating effect. For that reason, we have seen a great and, unfortunately, growing number of repossessions in recent months.

Average house prices have almost doubled since 1999, despite the only measure that the federal government has introduced relating to housing prices, the first homeowners grant, which was introduced in 2000. Housing prices have almost doubled since the introduction of the first homeowners grant. An average house used to cost about three years worth of the average wage. That figure is now seven times the annual average wage—and there is your problem of housing affordability. The interest on a 25-year loan of $320,000 is $580,000. That is an affordability problem. GST on a new home is $31,818. That is something that the federal government can affect. Developer and council levies in the example that I am using, which is an example based in Melbourne, are $9,709. So we need a Treasurer who is prepared to admit that he has some responsibility for keeping interest rates low and that he has some responsibility for federal taxes such as the GST that make new homes, in particular, unaffordable for young Australian families and are keeping young Australians out of the housing market.