This was an article from The Advisor magazine and it states that the housing industry commentators have slammed the Federal Government for failing to address the growing housing affordability issue in the 2011 budget.
In announcing the recent budget, Treasurer Wayne Swan placed an emphasis on skills, training, and skilled immigration, as well as improvements to allow more private investment in large public infrastructure. While these are positive and necessary measures, HIA’s senior economist Andrew Harvey, said it was disappointing to see the inadequate funding of housing infrastructure had not been addressed. “Unfortunately, the Budget fails to deliver any dedicated policies to alleviate Australia’s chronic housing shortage, which is around 200,000 dwellings and growing, continues to place pressure on the household budgets of home buyers and renters,” he said.
“New home building activity is in danger of revisiting GFC-like levels this year, yet the Budget fails to address the excessive cost of new housing which in some instances sees more than 40 per cent of the purchase price of a new house attributable to government taxes, fees and charges.
“Until the high taxation of new housing is reduced, and supply side obstacles removed, Australian families will remain locked out of home ownership and will continue to face high rental costs. There is only one way to make serious inroads into the housing affordability costs, and that is by substantially increasing housing supply”. Real Estate Institute of Australia president David Airey agreed and said the budget had done little to help Australians obtain their dream of home ownership. “I was truly disappointed to see there were no measures in the Budget to assist those that REIA refers to as being an endangered species – first home buyers,” he said. First home buyers currently represent approximately 15 per cent of purchasers in the housing market, compared to 30 per cent in 2009.
“This is a market segment that desperately needs assistance to fund home purchase. REIA recommended in it’s Pre-Budget submission that the Government conduct a review of the First Home Owners Grant and consider providing first home buyers access to superannuation for the purchase of a home,” Mr Airey said. This budget will do little to starve off expected increases in interest rates, a concern given the critical state of affordability. “It is disappointing that the Government has not realized the value of implementing long term solutions to address housing affordability. We need to look at practical measures to give first home buyers the opportunity to realize the dream of owning their own home.
