Andrew Hastie (Canning, Liberal Party) Share this | Link to this | Hansard source

I rise to speak about housing affordability in Australia and in particular for the people within my electorate of Canning who are seeking to own property. Property rights in the Western democratic tradition were first enshrined when King John of England signed the Magna Carta on June 15, 1215.

Since then, much has been written about the relationship between property ownership, voting rights and democratic participation. In short, property ownership is a pillar of a free society and essential to a functioning democracy.

Today, home ownership symbolises equality and opportunity as well as the primary vehicle by which Australians can build wealth and thereby secure their economic future. But entry into the Australian housing market is becoming increasingly difficult for young Australians—Australians of my age and my generation.

As we move further into the 21st century, house prices relative to income have increased from three times the median income to more than nine times the median income. In the 12th international housing affordability survey of 2016, Australia was listed as having 33 severely unaffordable metropolitan markets. The City of Mandurah, which sits at the heart of Canning, ranked as the 10th most expensive metropolitan market in Australia based on its median multiple. The median multiple is the ratio of median income to median house price. Housing affordability has been traditionally considered at one to three; Mandurah has a ratio of one to seven.

In my seat of Canning, 40 per cent of homes are currently being purchased via home loan mortgages and 25.8 per cent of homes are currently rented. I have just under 50 per cent of my constituents with mortgages and a quarter of my electorate who do not live in a property they own. My family and I only recently became first home buyers this last Christmas. For the majority of Australians, owning their own home is a goal for them and for their family. However, there is growing concern among everyday people that barriers to homeownership are insurmountable. The huge costs of purchasing a home, the exorbitant stamp duties at the point of transaction and supply shortages make homeownership a challenge.

According to the McKinsey Global Institute Report of 2015, Australia's household debt to GDP is at 168 per cent. Australians are overleveraged and a lot of capital—capital that could be used productively in other sectors of the economy—is locked away in a largely unproductive housing market. The statistics are troubling. In the same report from McKinsey, Australia's government debt is not so bad relative to other parts of the world. China sits at 55 per cent of GDP; the USA, 89 per cent of GDP; Germany, 80 per cent of GDP. Australia's government debt sits at 31 per cent of GDP, but we need to check the current trajectory of our public finances. We have the right leadership team under Prime Minister Malcolm Turnbull and Treasurer Scott Morrison to make the necessary reforms.

Far more troubling is our household debt to GDP, which sits at 113 per cent. It is the worst by a long shot when compared to China, USA, Germany and Canada. Australians have locked away far too much capital in an unproductive housing market. Housing prices are unaffordable for many Australians. We have a problem. This government has cast a vision to drive innovation in our economy and to drive change into the 21st century so that we are positioned to capitalise on the huge opportunities in the China, Japan and South Korea free trade agreements. Many Australians stand ready to take those opportunities with both hands.

The key questions are: how do we unlock that capital so that we can see investment and growth in other areas of the economy? How do we deleverage the housing market without creating trauma like the Labor Party is suggesting with their negative gearing policies? Where can we make policy changes that allow for an incremental shift of capital from the housing market to other sectors of the economy? How do we increase the supply of housing for average Australians so that homeownership is a goal that can be realised early in our working lives rather than much later?

These are very difficult questions to answer and we should not rush to failure with policies like Labor's policy to abolish negative gearing. We should not undermine the equity in people's homes and deny middle income earners, like nurses, teachers, emergency workers and defence personnel, the opportunity to invest in property. This is what will happen under a Labor government. The Turnbull government understands the stakes are high for Australians. We need clear-eyed, considered, methodical leadership in this area. Rash populist policies advocated by Labor are not the answer.

I know personally that housing for my generation is unaffordable, but our best hopes for increased housing affordability lie with the Turnbull government, not with Labor. Tonight I express my confidence in the leadership of this government to work towards careful economic solutions in housing affordability for the next generation. (Time expired)