Solutions to housing affordability

April 18, 2011

The Real Estate Institute of Australia (REIA) has presented a submission to the Commonwealth Government identifying a range of areas affecting housing affordability which need to be addressed in the 2011/12 Budget.

REIA President, David Airey said, “Our focus in this year’s submission is housing affordability.”

Airey listed REIA’s key suggestions to the Government for improving housing affordability as:

• Retaining current arrangements for negative gearing of property investments
• Ensuring family homes are not subjected to Capital Gains Tax
• Not increasing in Capital Gains Tax on property investment
• Removing stamp duty on property transactions
• Reviewing the First Home Owners Grant (FHOG). “An increase of the FHOG is crucial to improving affordability in the housing market and encouraging the return of first home buyers to the market,” Airey said.
Establishing a scheme to encourage young Australians to contribute to voluntary superannuation by allowing them to access these resources for the purposes of raising a deposit for a first mortgage. “The scheme would be an adjunct to the First Home Savers Account but would allow flexibility for the saver to decide whether all or part of the voluntary superannuation payments was needed to augment the home purchase,” Airey continued.
• Monitoring of the Housing Affordability Fund and National Rental Affordability Scheme to observe their effects on housing supply and conduct a review which considers additional measures to bridge the demand-supply imbalance.

Airey added that these issues were of great importance to the future of the property market, and that REIA expects the Government to consider the proposal carefully.

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