As Australians gear up for the May 3 federal election, housing affordability remains a critical issue for voters struggling with soaring rents and mortgage repayments. However, economists have warned that major party policies don’t go far enough to address the crisis.
In a Grattan Institute podcast released on Monday, housing experts Brendan Coates and Matthew Bowes evaluated the housing policies proposed by major parties, concluding that comprehensive reforms are needed regardless of who forms government.
Labor highlights its existing initiatives, including the expanded Help to Buy scheme, which allows the government to take up to a 40% equity stake in first homes. However, Grattan’s analysis questions the scheme’s impact, with places capped at 40,000 despite expanded eligibility criteria.
“If anything, these changes just mean the scheme is less well targeted to those low-income households who need it most and increases the risk that the scheme effectively becomes a lottery for those who are applying,” Bowes said.
The experts also called for a tripling of the $10 billion Housing Australia Future Fund to ensure ongoing social housing growth and further increases to Commonwealth Rent Assistance beyond the 27% boost already delivered.
The Coalition’s flagship policy would allow first home buyers to access up to $50,000 from their superannuation for deposits. Coates acknowledged this would help some people but noted it would primarily benefit higher-income earners.
“It’s really not going to help those that are struggling to get into the housing market. So, it’s amongst those who are 25 to 34 years old,” Coates said. “The poorest 20% of renting households have just $5,000 in their super; the top 20% of the same age bracket have more than $70,000.”
Another Coalition proposal to reduce bank serviceability buffers would likely increase borrowing capacity but also push up house prices.
Both major parties have proposed a two-year ban on foreign residents purchasing existing homes, but Grattan’s analysis suggests this will have minimal impact given the already punitive tax regime for foreign buyers.
On migration, the Coalition plans to reduce permanent visas from 185,000 to 140,000 initially, gradually increasing to 160,000. Grattan estimates this would lower rents by just 2.5% over a decade, but at significant economic cost.
“Over the course of the next 30 years, the hit to federal government budgets would be $211 billion in today’s dollars,” Coates said.
The experts praised recent state government initiatives in Victoria and NSW allowing more townhouses and low-rise apartments in established suburbs, suggesting the federal government should introduce a national townhouse code as part of its competition policy.
Bowes described these types of homes to be “more on the kind of gentle density.”
“We’ve also seen this kind of housing encouraged in New Zealand, which introduced a medium density residential standard a couple of years ago,” he said. “We think that this is something the federal government should seriously look at expanding nationwide.”
With Australian cities continuing to face critical housing shortages, the challenge for the next government will be delivering on-the-ground results.
What are your thoughts on these proposed housing policies? Share your comments below.
