Increased supply solution to housing affordability

Master Builders Australia welcomes the Treasurer’s announcement of a way forward to tackling housing affordability.

“The Treasurer Scott Morrison has correctly identified the role supply side constraints play in artificially pushing up the price of housing. Tackling housing affordability by addressing the structural impediments to supply should be a priority for this term of government,” Wilhelm Harnsich,” CEO of Master Builders Australia said.

“Master Builders long standing policy position aligns with that of the Government which is to keep home ownership within reach of every day Australians, but to also preserve the value of housing – the most significant investment for most Australian and the single most important factor in maintaining household wealth and living standards,” he said.

“Treasurer Morrison rightly cautioned against the use of ‘sledge hammer’ policies, like the proposed changes to negative gearing by the Labor party, noting that solutions that only focus on affordability in Sydney and Melbourne may have the opposite effect in other housing markets,” Wilhelm Harnisch said.

“Master Builders calls for negative gearing rules to remain unchanged,” he said.

“Two speed splits in the housing market, such as between the eastern states and the mining states, between detached housing and apartment markets, and between inner-city and regional markets, all need to be equally considered when developing housing policies that are aimed at addressing affordability issues,” Wilhelm Harnisch said.

“Master Builders therefore strongly backs the Treasurer’s focus on the removal of inefficient land use regulations that restrict housing supply and put upward pressure on house prices. Master Builders has consistently called for the use of competition payments by the federal government to the states and territories as outlined in the Harper Review into Competition Policy 2015 and Master Builders 5 Point Steps for More Affordable Housing,” he said.

“Over the medium to long term Australia will still be likely to face a housing deficit not only in number but also in the range of housing options. For instance, the availability of suitable housing stock to meet the need of baby-boomers who are seeking to right size,” Wilhelm Harnisch said.

“It is therefore important that the immediate policy response is to remove structural impediments to the building of more new and diverse range of housing stock,” Wilhelm Harnisch said.