06 Aug VIDEO – Solving the housing affordability dilemma
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Housing affordability is still a key political issue and one that will continue to haunt Federal Governments of any persuasion. The peak professional body for investment professionals – PIPA – has called on the government to consider housing affordability strategies that reflect the country’s market needs, rather than any radical changes.
Property Investment Professionals of Australia chair Ben Kingsley says the association welcomes the federal government’s decision to rule out changes to negative gearing. He said he is hopeful this decision reflects a more measured approach to addressing affordability issues for both buyers and renters.
Kingsley said – “Housing affordability is challenging, but there’s no easy fix. We welcome the government’s focus on this issue but urge them to adopt sensible measures that reflect the national market needs, rather than any of the radical changes that have been floated by some corners of the market”. Kingsley noted that no policy would be able to reduce the price of quality property in the inner suburbs of major capital cities, due to continued strong demand and limited and geographically-constrained supply.
However, he believes strategic policies can encourage more supply in urban locations. Measures that encourage developers to build more family-friendly accommodation, such as three- or four-bedroom units and incentives to encourage the release of bulk land lots in new greenfield areas could also boost supply would go a long way to helping with affordability.
PIPA advocates that regulation and education remained key. Property investment advice needs to be regulated. This would remove spruikers and speculators from the market. Educating investors about the real and current risks of property investment, and ensuring they are not pressured into poor investments would help to moderate demand and avoid budding investors getting their hands burned.
The residential property cycle plays a significant role in the country’s overall economic performance and in building everyday Australians’ wealth. Kingsley point out that “While high property prices can be incredibly frustrating for those trying to enter the market, we need to remember that property is a key feature of many everyday Australians’ wealth creation strategies”. Property is an accessible, trusted source of wealth that can help just about anyone build a better future. We need to be very careful when it comes to playing around with measures that could hurt the value of these assets.