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One real estate group has been incredibly vocal during the housing affordability debate, and it’s now telling politicians, “the solution is simple”.
CEO of real estate network LJ Hooker Grant Harrod has come out swinging, saying “real action” is needed to address housing affordability.
Mr Harrod believes Australians are now facing a crisis that is getting worse by the day, but politicians are not willing to engage on a real level.
“The sustained growth in house prices in the major east coast metropolitan markets is creating a housing affordability crisis that can no longer be continue to be ignored by both state and political leaders,” he said.
“The average house price now costs 12 times the average salary (20 years ago this was only four times) and with minimal real wage growth and massive house price growth, this is even greater in markets like central Sydney and Melbourne. The long speculated house price bubble in these markets has proven the opposite. Each weekend, with fewer properties available for sale and a growing list of desperate buyers, pressure on getting a home has seen house prices continue to rise. And the very people responsible for dealing with this crisis – our elected politicians – are silent or otherwise tokenistic in their suggestions on ways to address it.”
The network head said politicians can make decisions concerning national security, but are failing to engage in such a basic debate.
“It should be a fundamental right for every Australian to own a home. It is this right upon which our nation has evolved. Our governments make decisions to send Australians to war zones, but constantly skirt entering a debate around how we deal with a crisis that’s going to impact many generations of Australians to come,” Mr Harrod said.
He questioned whether the lack of engagement was due to the federal and state governments being “the biggest benefactors of this housing affordability issue”.
“We’ve seen state government coffers swell with these punitive taxes on property – from stamp duty to land tax, capital gains tax, development approval taxes and even legislating to increase their take of interest earned on property trust account funds.”
Mr Harrod said the Australian real estate sector is the most taxed industry, and it is time to act.
“What we do know about politicians is when they don’t have an answer, they look for a distraction. Let’s stop this distraction and get on with developing real sound policies, so like generations past, future generations of Australians can enjoy a place they call home.
“We need to see a real concerted effort to deal with the chronic demand versus supply problem in these major markets,” he said.
Mr Harrod’s plan of action to address housing affordability and supply/demand imbalance includes:
- Encouraging more families to establish their lives in regional centres and incentivising employers to relocate to these areas. “It’s a long game, but it works, just look at the US,” he said.
- Change how stamp duty is calculated. This will “liberate real estate stock”, according to Mr Harrod because it’s currently too expensive for some owners to sell their property and buy their next home. “House prices have risen in recent times in Sydney by 45 per cent, stamp duty costs have also increased by 45 per cent.” Mr Harrod said the stamp duty debate should already be over because it is clear it’s a “highly inefficient and restrictive tax that is directly contributing to the rise in house prices in many markets, because the cost of change is so prohibitive”.
- Change the planning approval process. “It’s failed in every aspect of encouraging sustainable development of housing stock to meet population demands.”
- Address the infrastructure problems we’re facing which are forcing many of us to live close to CBDs. “Shame we haven’t seen more of the income generated through property taxes spent on improving infrastructure and public transport.”
Mr Harrod said the bigger picture solution “is simple”.
“We have to change the supply and demand characteristics of the real estate market,” he said.
“This is now a structural issue that requires real vision to fix. A good start is for the federal government to acknowledge this crisis and appoint a dedicated housing minister, whose sole responsibility is to address this housing shortage crisis by developing real policies with their state counterparts to fix all the constraints that currently sees housing demand outstrip supply in most major Australian property markets.”
Do you agree with LJ Hooker and Mr Harrod?
Are we in a crisis? What’s the solution?
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