Multi-focus approach needed to fix affordability crisis

Multi-focus approach needed to fix affordability crisis

16 March 2017 by Tim Neary 0 comments

One industry body has spoken out in favour of the federal government’s focus on housing affordability, saying that resolving the complex issue will require a diverse suite of policies.

The Housing Industry Association says rather than simply changing negative gearing and capital gains tax, the appropriate policy focus should be on tackling the first home owner deposit gap.

It said independent research conducted for HIA by Independent Economics provides evidence that amending negative gearing provisions would be a retrograde step as it would reduce both living standards and housing affordability.

HIA chief executive – industry policy Kristin Brookfield said a bond aggregator model to increase public and social housing supply would be a better option, adding that consideration should be given to allowing first home buyers to access super savings to support a housing deposit.

Ms Brookfield said the two keys to addressing the affordability challenge are boosting residential land supply and eliminating stamp duty on residential property conveyances. 

“Both represent large policy challenges, and can be achieved with co-operation between state governments and the federal government,” she said.

Meanwhile, new research has showcased the impact of these ongoing affordability issues on working Australians.

A survey, commissioned by ALI Group, shows that as many as 36 per cent of Australian mortgage holders are concerned about their job security. 

Part-time workers are most likely to feel the pressure of potentially being unable to meet mortgage repayments, with 42 per cent of them listing job security as a top concern, compared with 35 per cent of full-time workers.

CEO of ALI Group Huy Truong said the findings come as Australia experiences a raft of structural economic changes, including job losses in low-tech manufacturing, automotive and mining industries.

He said ALI data highlights this employment concern, adding that 69 per cent of the company’s total claims in recent years were for involuntary unemployment, both salaried and self-employed.

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