Pre-budget submissions have called on the government to tackle low levels of first home buyers and soaring house prices.
REIA president Peter Bushby said the ten proposals put forward by the lobby group aim to stem the rapid decline of first home buyers.
“We want to see a marked improvement in the standards of delivery of vocational education and adequate data on the supply/demand imbalance of housing for informed decision-making by policy makers and stakeholders,” said Bushby.
The groups proposals include allowing first home buyers access to their superannuation for the purchase of a home and reviewing the amount of the First Home Owner Grant annually to maintain relativity with house price movements.
Abolishing stamp duty, retention of current negative gearing arrangements for investment properties and no increase on Capital Gains Tax were among other key proposals.
“Availability of affordable housing is a goal that is shared by governments and all sectors of the community,” said the submission. “Availability of affordable housing impacts on the functioning of the economy as well as the wellbeing of individuals and the cohesiveness of communities and society.”
The report cited statistics that showed the number of home loans issued increase by 20.5% over the two years from November 2011 to November 2013, while during the same period first home buyer participation declined from 20.2% to 12.3% - the lowest level ever recorded by the ABS.
“This decline is despite eight cuts in the official interest rate since November 2011.
“Providing a stimulus to economic activity outside the mining sector was amongst the main reasons for the
RBA to cut the official cash rate during 2011-13.
“Declines in returns to term deposits prompted substitution towards other assets, including housing however the full effect of the rate cut is yet to be felt.”
Home ownership levels fell by 4.5% in the decade to 2011, said the submission and was most pronounced in the 35-44 age group.
“The National Housing Supply Council, in its 2012-13 report, showed that it seemed certain that the rate of home ownership would drop further.”
The HIA’s submission called on the government to leverage off the expanding housing sector in order to restore growth in Budget 2014/15.
HIA chief executive industry policy and media, Graham Wolfe, highlighted the imperative for May’s Budget to contain measures that promote growth in new home building.
“It is important that the Commonwealth removes impediments to growth in the sector, invests in training for the future workforce and ensures that it improves the return that it is currently getting from investments in affordable housing programs,” said Wolfe.
Key measures being proposed by the industry for the 2014/15 Budget include:
- A Productivity Commission Inquiry into the cost of housing, including taxation and its impact on affordability, productivity and economic activity.
- Increasing incentives for employers of apprentices, and improved commencement and completion incentives for apprentices.
- Continued funding for the National Rental Affordability Scheme, with greater accountability measures and tying Commonwealth housing programs to performance incentive benchmarks targeting improvements in the supply of new housing.
