Whatever the outcome of the looming federal election, the incoming Commonwealth Government will need to pay greater attention to housing issues and the health of the residential building industry.
Housing affordability ranked in the top three issues of concern to voters, according to Australia-wide research conducted by HIA late last year. Only healthcare and the cost of living rank more highly.
Housing pressure is being felt the most by renters. While more than 90 per cent of renters aspire to own their own home, less than half feel that they will ever achieve it. This is a sobering outcome – and one that all levels of government should take notice of, particularly since less than half of those surveyed believe governments are performing well on housing affordability.
Helping more renters into home ownership and improving housing affordability needs some serious thought and action by government, and so does the governments’ attitude towards the residential building industry. If the industry isn’t healthy, then there is little chance to improve housing conditions.
The recent clamping down on credit availability for home buyers and small businesses is a case in point. When combined with the punishing taxes levied on foreign buyers by the states, and the regulatory barriers on lending introduced by federal agencies, the current credit squeeze has undermined the home ownership aspirations of thousands of home seekers.
Overreaction by the banks in the face of the Royal Commission only tightened conditions further.
The squeeze on housing finance has unfortunately come at a time when the industry was already slowing from high levels of activity throughout 2017 and 2018. The slowdown has accelerated, especially in the multi-unit sector of the market; a place where many find their first home. Recent experience has shown that when the industry is able to deliver plenty of supply, affordability can be kept in check.