Lack of supply the big issue in housing affordability

Lack of supply the big issue in housing affordabilityHousing affordability remains prominent on the national political agenda, with the House of Representatives inquiry into home ownership continuing, the Federal Government releasing the latest State of Australian Cities report and a national partnership agreement on homelessness.In its submission to the current House of Representatives inquiry into home ownership the Property Council argues that the greatest barrier to housing affordability is a lack of supply for a growing population and outdated planning and taxation systems which mean that housing is often far more expensive than it needs to be. The Property Council has put forward a five-point housing affordability plan focussing on tax and planning reform, in an effort to steer policy makers towards solutions to address the key challenges to affordability.To date the Federal Government’s efforts have largely focused on tightening compliance with foreign investment frameworks, which while important, can distract from the most pressing issues affecting affordability. As noted in the submission the ability of supply to keep pace with demand, and in turn keep downward pressure on prices, depends on streamlined and efficient planning systems. Any discussion about housing affordability cannot ignore the desperate need for planning reform around Australia.Among its recommendations the Property Council advocates for: zoning more land for housing; simplifying and speeding up planning processes; reducing taxation on the production of new housing; linking housing to jobs through infrastructure; and incentivising state governments to pursue reform.Submissions will be published on the inquiry Committee’s website once they have been reviewed. Many of the themes from the submission were echoed in the latest State of Australian Cities report released this week. The report included a special focus on transport and infrastructure, finding that Australia’s cities had never been more populous and its transport networks were experiencing record levels of demand. The report found that Melbourne had seen the greatest growth in absolute terms over the last decade, adding the equivalent of 200 people to its population every day. On average over 60 per cent of Australia’s population live in Australia’s five largest cities.The report advocates for policy making that better connects infrastructure delivery with jobs and housing, emphasising the importance of colocating jobs and people. On Monday the Minister for Social Services also announced that the Western Australian, Northern Territory and New South Wales Governments, together with the Commonwealth, had signed up to the 2015-17 National Partnership Agreement on Homelessness. Tasmania and Victoria had also signalled their intentions to sign on. The Agreement includes $230 million of federal funding over two years for frontline services focusing on women and children experiencing domestic and family violence, and homeless youth under 18.