Improving housing affordability
The Property Council of Australia has welcomed Labor’s announcement it will support incentives to meet the need for affordable housing for low to middle income earners.
“It makes sense to harness the investment capacity of the private sector to deliver affordable housing for Australians,” said Ken Morrison, Chief Executive of the Property Council.
“While there is much media focus and commentary on the cooling of housing markets in Melbourne and Sydney, housing affordability remains a critical issue for many Australians whether they are looking to rent or buy a home.
“Labor’s incentives for investors to deliver affordable housing will make a contribution to meeting that need while also providing a boost to our construction industry which is a key driver of economic activity.”
Mr Morrison said that sustainable improvements to housing affordability over the longer term required a suite of measures involving federal, state and territory and local governments.
“Planning schemes, land supply, and property taxes which make up around 25% of the cost of a new house are all part of the housing affordability mix – there is no single ‘silver bullet’ solution,” Mr Morrison said.
Labor’s support for more affordable housing must be considered against against the backdrop of significant, unmodeled changes to negative gearing and capital gains tax which could have an immediate impact on 2.1 million property investors across Australia.
“Labor’s incentives are welcome – but they are no substitute for the supply of housing which is funded by 2.1 million property investors, including those who access negative gearing.
“One-third of Australian households are in rental accommodation and Labor must hasten slowly with any changes to the policy settings which could impact this housing sector.”
Mr Morrison said Labor should also focus on housing affordability through support for the development of the Build-to-Rent asset class in Australia in which institutional investors develop and manage quality rental accommodation properties which can provide tenants greater housing choice and security of tenure.
“By enabling international investors to access the withholding tax concessions available through managed investment trusts, Build-to-Rent has the potential to deliver more housing to the market more quickly and more efficiently, including affordable housing choices,” Mr Morrison said.
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