Housing affordability is now firmly on the federal election agenda. This is a great thing.

Because there’s every reason that Australia should be having a red hot debate on housing affordability and what should be done about it.

A recent survey conducted for the Property Council found over 70 per cent of voters believe that younger people will never be able to purchase a home in our country. Almost 90 per cent of people trying to get into the market say housing affordability is one of the most important issues in deciding their vote. 

We’ve known for a long time that Australian house prices are high by international standards. International housing affordability survey Demographia ranks all Australian capital cities bar Darwin as ‘severely unaffordable’.

Last week we also saw more evidence that housing costs and rents are feeding into higher inflation in unhelpful ways.

Australia desperately needs better policy frameworks which provide the housing supply and choice that our growing communities need.

The current Federal Government has delivered some very important housing measures over its term. During the depths of the pandemic the Government’s HomeBuilder program helped avert a construction and jobs calamity, keeping hundreds of thousands people in work and the economy moving. 

The Government’s Home Guarantee Scheme – extended in the budget and supported in a similar form by Labor – has helped first home buyers and others bridge the deposit gap.

The Opposition’s proposed Help to Buy shared equity scheme announced on Sunday would also make a big difference to the 10,000 people a year who could secure a place in the program.

These and other existing schemes are worthy, targeted and welcome – but by themselves they don’t represent the systemic overhaul the nation needs.

And that’s why the second part of Labor’s housing announcement at its campaign launch is particularly important. Labor’s proposal to establish a National Housing Supply and Affordability Council got less attention, but it presents far greater potential for real reform.

The Government’s official forecasts from the National Housing Finance Investment Corporation show a housing supply crunch is on the horizon. 

The numbers show housing supply is set to fall by fully one third, right at the time our population growth is returning to normal settings. NHFIC estimates that between 2025 and 2032 Australia will find itself 163,400 homes short of demand.

Falling supply and rising demand is a danger zone for housing affordability. 

State, local and federal taxes and charges can already make up almost 40 per cent of the cost of a new home, and poor supply and planning systems add further upward pressure on the cost of supplying new homes for a growing nation.

So a focus on housing supply is the right one. Yet any new Housing Supply and Affordability Council also needs real teeth. It’s one thing to set out housing targets for each state and territory, it’s another to ensure these targets are met. It’s the hardest part, yet the most crucial.

What will be needed is a set of carrots and sticks within a joined-up national plan that ensures these goals are achieved. All three tiers of government must be prepared to work together on this. Pleasingly, a recent Parliamentary inquiry led by Liberal MP Jason Falinski set out several workable models that could see the federal government take a leadership role in helping to incentivise better outcomes at state and local levels.

In fact, the words ‘models’, ‘outcomes’ and ‘supply’ seem almost hollow, or policy-wonkish when you consider the humanness of the issue we face.

When we talk about ‘outcomes’ we’re talking about quality of life. When we talk about ‘supply’ we’re talking about choice: Giving grandparents the chance to find a suitable home, in the same area where their children are now raising their own families. Giving teachers and nurses the opportunity to afford to live near where they work, the same community they tirelessly serve, rather than living far away and battling long commutes. At the end of the day housing supply is about keeping families close, and communities connected.

And while we know delivering greater housing supply and choice is vital for affordability, it is also critical for the economy. 

In 2015 the Productivity Commission said that better functioning cities and towns was one of the top five productivity opportunities for the nation. The Commission particular took aim at the overly complex and inefficient state planning and zoning systems around the country. 

On top of that Shifting the Dial report, there have been 13 separate federal parliamentary inquiries and reports on the subject of housing affordability since 2003… with no real dial being shifted.

It has taken several decades to undermine the great Australian dream of owning your own home. 

Solving these issues won’t happen overnight and will take gumption and collaboration from all levels of government.

With only weeks until the May election, the property industry is ready and willing to help governments tackle this BBQ-stopper head on.

Undecided voters are ready for action too.

This article was written by Ken Morrison, and was originally published on the Daily Telegraph on 03/05/22.