Effective action needed now to address housing undersupply & affordability

The CEO of Australia’s largest independently-owned mortgage broker, Mortgage Choice, is calling for federal and state governments to work together to remedy the inter-related problems of housing undersupply and housing affordability outlined in the second annual report issued earlier this year by the National Housing Supply Council.

Mr Michael Russell says that while the federal government should be commended for its increased investment in social and subsidised housing via the Social Housing Initiative, the Nation Building and Jobs Plan, and the National Rental Affordability Scheme, there are two critical areas outlined in the 2nd State of Supply Report 2010 report that need to be addressed as a matter of urgency.

“Australia has serious blockages in its land and dwellings supply pipeline. This must be cleared if we are to start to get on top of the undersupply problem that continues to stress housing affordability,” he says.

“Firstly, an immediate and significant improvement is required in the planning approval and development assessment process. This remains fundamental to delivering the required supply of dwellings and land to satisfy present and future demand. These processes currently result in far too much time wastage, frustration and costs for developers and builders.

“Secondly, the government must review, with a desire to reduce, property related taxes and charges.

“The gap between underlying housing demand and total supply increased to a shortfall of 178,400 dwellings throughout 2009 and has been estimated to increase further to 308,000 by 2014. Given that housing supply has a direct impact on housing affordability for homebuyers and renters, both issues should be addressed in conjunction with the initiatives already undertaken.”

Speaking further, on the first homebuyer segment and the growing affordability issues they encounter, Mr Russell says continued assessment needs to take place to:

1. Develop a more attractive savings option for first homebuyers, seeing as the First Home Saver Account has failed to reach anywhere near its target (actual accounts opened is c.15,500 compared to the budget of 750,000); and
2. Index the First Home Owner Grant to median housing price growth and backdate to its first anniversary, July 2001.

In the lead up to the federal election this Saturday, Mr Russell states, “Homebuyers, renters and all those gainfully employed in the building and finance industry continue to watch and wait for any election promises specifically made to address the above.”

Call 13 MORTGAGE. Or, visit www.mortgagechoice.com.au, www.facebook.com/MortgageChoice or http://twitter.com/MortgageChoice.