the full article.

May 2015
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Following its 2008 report, “A Good House is
Hard to Find”, this is the second inquiry
conducted by a Senate Committee into
housing affordability in seven years.
»
Showing leadership in its policy
capability and engagement with the
states and territories with regard to
urban planning policy;
The Committee’s recommendation to grow
the Commonwealth Government’s role in
addressing the affordability problem,
including a national housing affordability
plan, risks becoming a “one size fits all”
approach that raises more questions than it
answers.
»
Developing a long term national
affordable housing plan in collaboration
with the states and territories; and
»
Establishing a new body, ideally a
statutory body, similar in function to the
former National Housing Supply Council,
but also with responsibility for
monitoring performance against a new
affordable housing plan.
As highlighted by the Committee, home
ownership in Australia has, and continues to
make an important contribution to the
financial and social well-being of individuals
and society at large.
Recognising that the challenges are of
national economic significance the
Committee acknowledges that the issue of
housing affordability is complex and diverse,
and recommends that it be a “central and
crosscutting theme of government” (pp.xix ).
One of the main messages arising from the
Senate Inquiry is the need for the
Commonwealth Government to give
“coherence to the numerous local, state and
national incentives and schemes intended to
contribute to the provision of affordable
housing” (pp. 409).
Stating that it does not believe the issue of
housing affordability can be categorised as
either a “supply-side problem” or a
“demand-side problem”, the Committee
submits that the Commonwealth
Government has a legitimate role “to use
policy interventions to improve the
efficiency, efficacy and, critically, the
affordability of the housing market”. Its
recommendations to establish this function
at the Commonwealth level includes:
Rob Burgess
Associate - Charter Research
[email protected]
T +61 (0) 3 8102 8814
»
Appointing a Federal Minister for
Housing and Homelessness;
»
Showing leadership in regard to national
urban planning policy and urban
regeneration;
»
Reinstating the National Urban Policy
and Major Cities Unit;
There is an array of interventions impacting
housing affordability across Australia
ranging from long-standing fiscal policies at
the national level, through to unique urban
planning approaches at local government.
Highlighted in the 231 submissions made to
the Senate inquiry the impact of these
interventions, together with a number of the
identified solutions, are generally well
understood.
There is no question of the importance of the
Committee’s finding that affordability is
worsening and that there are alarming
economic and social consequences.
However, the concept of an expanded
Commonwealth government role, which
includes a long term national housing
affordability plan, is concerning due to its
“top-down” approach.
The Committee’s findings are significant,
though there is little, if any, disagreement of
the extent to which the housing affordability
problem affects Australians.
It is difficult to envisage how an expansion of
the Commonwealth’s role could achieve
efficiency and affordability improvements
without an appropriate evidence-base, or a
commitment to reform the mechanisms and
institutions that regulate the delivery and
production of new housing.
The significant median house price variance
across Australia’s capital cities highlights
the underlying economic forces relating to
each city. Any attempt to provide more
affordable housing must begin with a
detailed understanding of the structure and
operation of the housing markets at which
affordability initiatives are targeted.
SOURCE - www.abs.gov.au
Despite the Committee’s view that the
Commonwealth Government cannot “step
back from its responsibilities to ensure that
every Australian has access to affordable,
safe and sustainable housing”(pp.xxi ), the
extent to which the Commonwealth could be
reasonably expected to achieve this
objective is at best questionable.
Acting in concert, economic forces and the
regulatory framework in relation to the
delivery of new housing are both significant
factors in determining incomes, price and
therefore housing affordability. It is simply
unrealistic to expect a national housing
affordability plan to provide every Australian
with access to affordable housing, as the
characteristics which determine this vary
widely across any given metropolitan area.
The Senate Committee rightly recognises the
threat that a lack of affordable housing
poses to the social and economic fabric of
Australian society. However, without reform
to the levers that regulates supply and
demand at the localised level, its
recommendation to expand the role of the
Commonwealth risks further inertia while
the impacts of declining ownership, upon
both the individual and broader society alike,
will continue.
The Charter Insights have been prepared by Charter Keck Cramer (Charter). The information provided is not intended to provide a sufficient basis on which to
make an investment related decision. It is intended to provide observations and views of Charter for information purposes only. Observations and views
expressed may be changed at any time and without notice to you. Any reliance placed on this material is at your own risk. If you require specific advice or
information, please contact Robert Papaleo - National Executive Director, Charter Research at Charter Keck Cramer.
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