Michael Ronaldson (Victoria, Liberal Party) Share this | Hansard source

Exactly. I just want to go through the realities of the house price situation. Five years ago, $40,000 would have bought you a reasonable house in a city like Adelaide. The median price was about $135,000; that has now doubled. In just five years, the price of residential land has doubled. Land once represented 25 per cent of the cost of a new house and land package. How much is it now? Fifty per cent. In five years the residential land component of a house and land package has gone from 25 per cent to 50 per cent. In comparison, the actual building costs of a new home have not risen dramatically. The great bulk of this increase has been that land component of house and land packages.

I am taking some of this information from a lecture by Bob Day AO, the national president of the HIA, in a speech that he gave last year, I think it was. He quoted a recent housing affordability study of 88 cities around the world, including Australia, New Zealand, Canada and the United States. It confirmed that land rationing through government policy is the main cause of increased land prices—those very land prices I referred to before which have seen the land component of house and land packages increase from 25 per cent to 50 per cent.

That study was conducted by a research group called Demographia. It found that housing affordability, rather than being a worldwide problem, as some claim, is largely confined to cities in Australia and on the coast in the United States where governments restrict land supply. Of 30 cities covered in the study that were classified as having affordable housing—which is where the median house price is generally less than three times the median household income—none of those had adopted the policies of state Labor governments in Australia which have driven up land prices for new home buyers.

There has been talk about the blame game today. This situation will not be resolved overnight. The situation will be resolved by state Labor governments doing four things: (1) they must release more land; (2) they must streamline planning approvals; (3) they must cut stamp duty on property transfers; and (4) they must ease the developer and infrastructure levies they charge for developers of new homes. We have to maintain a strong economy to maintain affordability, but it is incumbent upon state Labor governments to do their part, as they have sole responsibility for addressing that 25 per cent increase in the land component of housing and land costs. (Time expired)