Housing Up Front

Our newly minted Prime Minister, Anthony Albanese announced his leadership team this week and elevated, for the first time for an Australian government, the Ministry of Housing, Homelessness and Small Business to the 21-member Cabinet. Normally an outer Ministry, Housing had been consigned to being of secondary importance to work-place relations, education, foreign affairs and the like.

The Hon. Julie Collins, the Member for Franklin in Tasmania, has been appointed as the new Minister having been first elected to parliament in 2007 and previously served in the Housing portfolio in previous Labor governments.

Housing featured prominently during the election campaign with home and rental affordability bundled in with rising cost of living pressures. Both major parties committed to various housing policies designed to assist first home buyers and encourage supply. Labor has committed to building 30,000 new social (government provided) houses and share equity in 10,000 homes annually for first home buyers.

These are all positive initiatives designed to broaden the opportunities for first home buyers. This focus would normally help rental affordability as first home buyers typically free up tenancy stock once they transition into their first home.

REIA will be calling on the new government to focus on housing supply as the key to unlocking the affordability challenge. Affordable housing is challenging because 67 percent of all homes are under ownership, either owned outright or mortgaged, and I’m yet to meet a home owner that celebrates when the value of their home falls. But this is, of course, what needs to happen if housing is to become more affordable.

Whilst housing affordability is an important issue, especially in the eastern states, rental affordability deserves more focus. This is because those in rented homes are at more immediate risk of social malaise and homelessness than those that own a home. 27 percent of all housing stock in Australia is privately owned rental homes, but this number is falling.

In WA, there are some 10,000 fewer privately owned rental homes now than there was in early 2020. Poor capital growth, low rents and high vacancy rates in the ten year period 2009 to 2019 coupled with rental moratoriums during the height of COVID-19, has seen investors sell out in favour of better performing assets.

• This important cohort of investors must not be left behind for ideological reasons. Government (despite the Green’s bizarre claim they can build one million social houses by ‘taxing the rich’)
• cannot provide enough housing to match the private sector contribution. Nor should they aspire to. We don’t bemoan Australians saving for their retirement by boosting their super funds. Investing in housing to deliver affordable rentals as part of individual financial planning should be no different; it should be championed.

Delivering affordable rental homes by encouraging private individuals to buy investment stock is just as important as the great Australian dream of owning your own home.