Published on September 1st, 2017
Stop pretending everyone will own a home, housing experts say
“We’ve got to realise housing affordability for many people is no longer about being able to buy a home it’s actually about long term renting,” Mr Kirkland said.
“We’ve got to be able to find a way to make it easier for people to find affordable renting and make it easier for them to exercise their rights when something goes wrong.”
Mr Kirkland said the reality was that buying a house was out of the question for many Australians.
“In reality we’re not going to be able to turn that around,” he said. “We need to stop pretending that everyone’s going to own a home and actually work out how we make the rental market work better for whom that’s a reality.”
Head of Australian economics at NAB Riki Polygenis said barring large-scale government intervention or a major catastrophe, prices won’t come down in the near future.
“A lot of the drivers that have driven up house prices to date such as strong population growth, foreign demand, limited supply, taxation arrangements,” she said. “Unless those factors change in a fundamental way I don’t think we’re going to see much improvement of housing affordability in Australia.”
Australia’s state and federal governments either lacked the courage or simply the political support to do much to correct the widening gap between house prices and wage growth, CEDA board member John Edwards said.
“There is, it’s the most sensitive issue in Australian politics,” he said. “Too hot to handle. We’ve been very reluctant to do very much about negative gearing, or about concessional treatment of capital gains.”
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As it stands, the Australian rental system was skewed heavily in favour of landlords, Dr Edwards said.
“We don’t really, at this point, have a legal framework to support security of occupancy,” he said. “It’s not the lease [length] that’s so important it’s the landlord’s obligations to keep the property in good repair, give adequate notice, to only evict in circumstances when the tenant is clearly at fault.”
Ms Polygenis said it may take decades for housing to capital cities to be affordable again.
“If you’re trying to correct the issue of affordability then I think that’s going to be a very long process.”
“You also need to do that in a way that doesn’t put downward pressure on house prices, obviously there’s a wealth effect to consumer spending as well.”