Australia has a once-in-a-century opportunity to address the housing crisis, according to the federal Opposition Leader.
In his budget reply speech delivered to the House of Representatives on Thursday, 13 May, Anthony Albanese unveiled plans for a $10 billion Housing Australia Future Fund, if Labor is elected at the next federal election.
“I’m proud to say that Labor in government will create a $10 billion Housing Australia Future Fund, with the annual investment return to build social and affordable housing and create thousands of jobs,” he began.
Over the first five years, this would build around 20,000 social housing properties, with Mr Albanese touting that the plan would be “good for jobs, too”.
It’s expected that the initiative would create more than 21,500 jobs each year, with one in 10 construction jobs created set to support apprentices.
Labor would set aside 4,000 of those properties for women and children experiencing domestic and family violence and older women who are low-income earners.
It’s also pledged to put $100 million towards crisis and transitional housing, for women who are at risk of domestic and family violence.
Elsewhere, Labor also has plans to build 10,000 affordable housing properties for frontline workers, who he called “the heroes of the pandemic — those nurses, police, emergency service workers and cleaners that are keeping us safe”.
Another $200 million will go towards the repair, maintenance and improvements of housing in remote Indigenous communities.
According to Mr Albanese, “this is a Future Fund that will give more Australians a future”.
Recap all the home ownership measures introduced by the Morrison government in the 2021 budget here.
‘A missed opportunity’
The Property Council of Australia has welcomed the pledge for a $10 billion housing spend from Labor.
The council’s chief executive, Ken Morrison, acknowledged housing affordability as “a dire issue for Australia”.
“The Housing Australia Future Fund is an innovative approach to house less-fortunate Australians,” Mr Morrison said.
Acknowledging a need for greater supply across the entire housing spectrum, Mr Morrison added “this investment would certainly be welcome by the industry”.
Despite the praise, the Property Council has said that the speech was a “missed opportunity for the opposition to rule out changes to negative gearing and capital gains tax arrangements”.
He argued that changing current negative gearing or CGT arrangements would be the wrong policy at the wrong time and would have a perverse impact on housing affordability.
Economist Dr Andrew Wilson has recently acknowledged to REB sister brand Smart Property Investment that there is a high chance that Labor will drop the negative gearing debate heading into the next election.
“Even though we are seeing an absolutely predictable revival in investor activity, we’ve got to understand that the level of investor activity has been absolutely dreadful,” Dr Wilson said in a recent episode of The Smart Property Investment Show.
“Investors have had to confront a credit squeeze for the last two or three years. It’s very difficult still to get loans from the banks if you are an investor. There’s been a lack of product to identify as an investor with the problems with inner-city apartments, but that’s all now obviously a thing of the past.”
While investor levels are back to their 2017 level, they’re still well behind their peak.
“Average investor market activity is around about 33 per cent of all lending. It’s now pushing up into the mid-20s, but it’s still well behind where it is traditionally, and particularly where it is in strong market price outbreaks as we have at the moment,” Dr Wilson said.
“There’s really nothing there that can be in any sense overbalanced, and you don’t need to be targeting investors in any way to try to rebalance the markets as that negative gearing push was supposed to.”