As home ownership is fast being removed from a reality formany Australians and media speculation is rife on a lending crackdown, RealEstate Institute of Australia (REIA) has delivered three key urgent andactionable recommendations to the House of Representatives Standing Committeeon Tax and Revenue inquiry on housing affordability and supply.
REIA President, Adrian Kelly said they have called for allgovernments to address three fundamentals which will assist Australians inachieving home ownership.
Our three recommendations are axing taxes on Australianhomes, building more houses and implementing a national plan for housing, Mr Kelly said.
Australia needs more housing
Mr Kelly said home ownership remains a major part of thegreat Australian dream, with 75 per cent of Australians viewing home ownershipas part of the Australian way of life but this is fast becoming an unreachablegoal.
With COVID-19 economic stimulus and housing supportprograms ending, first home buyer activity has plummeted by 20 per cent sincethe start of this year the decline is set to continue as the number oflistings continue to dry up across the nation as home owners become morereluctant to sell up due to the high costs involved.
Coinciding with the decline of first home buyers, listingsare at a historical low falling down to just 200,000 over the past year typically listings are double on this figure.
As migration returns to normal, demand is expected toexceed new supply which in turn will further highlight the criticalrelationship between supply and affordability and new dwellings will beneeded, Mr Kelly said.
Stamp duty is a major deterrent for buyers
Mr Kelly said selling and buying a home has becomeincreasingly prohibitive with real estate agents long highlighting to State andFederal governments that investors and owner occupiers alike are discouragedfrom buying a property due to stamp duty.
Stamp duty is a major deterrent for Australian investorsas well as those struggling to buy a home with lower investor activity puttingupward pressure on rentals,” Mr Kelly said.
Recent analysis shows that stamp duties on houses alsoabsorb a significant portion of average annual earnings in Darwin (30 per cent),Hobart (28.5 per cent), Adelaide (27.8 per cent) and Canberra (26.8 per cent).
For units, Melbourne and Sydney lead by a long way, thoughstamp duties also significantly eat up earnings for unit buyers in Adelaide(21.2 per cent) and Hobart (20.7 per cent).
Mr Kelly said more can be done to encourage activity tobetter utilise existing housing stock.
First home owners should be able to offset their interestrates as a tax deduction the same way investors do for private rentals.
Other levers that must be considered is the removal of CGTon second residences and investment properties.
By reducing and eliminating antiquated taxes, we willencourage more activity in the market place which will balance out bothaffordability and supply issue, Mr Kelly said.
Australia needs a national housing plan
Lastly, REIA has recommended that a national plan forhousing be developed by State and Federal governments with an accountablecouncil of Ministers formed.