What can be done to ease the housing crisis? | 7.30

Summary

In a discussion about addressing Australia's housing crisis, experts highlight the urgent need for increased supply, targeting 1.2 million homes over five years. A proposed reform fund aims to incentivize states to implement efficiency-enhancing measures while tackling the disincentives of stamp duty on housing mobility. The conversation also addresses land banking practices by businesses and the productivity decline in the construction sector. Regulatory changes, including a potential freeze on construction codes and debates on negative gearing and capital gains tax, are examined as crucial elements in balancing housing supply and demand.

Takeaways

• 🏠 The federal government aims to build 1.2 million homes over the next five years, translating to about 9,000 new homes per year.
• 💰 The proposed reform fund is designed to address the housing supply gap and is modeled after successful historical initiatives.
• 📊 The report emphasizes that productivity-enhancing reforms in the housing sector are crucial for addressing housing challenges.
• 🔄 Stamp duty is seen as a tax on mobility, discouraging people from downsizing and freeing up larger homes for families in need.
• 🚫 Victoria has implemented a one-year freeze on stamp duty for off-the-plan property purchases, with potential lessons for other states.
• 💼 Businesses are urged to act responsibly regarding land banking, which involves holding onto land without developing it.
• 📉 Productivity in the construction sector has significantly declined, necessitating measures to enhance profitability and development speed.
• 🔍 The Coalition's proposal for a 10-year freeze on changes to the National Construction Code is under consideration but requires consultation.
• ⚖️ The report advocates for supply-side measures rather than demand-side changes like negative gearing and capital gains tax adjustments.
• 🗣️ Discussions on capital gains tax are welcomed, but any changes should be part of a broader tax reform conversation.

Q & A

What is the target number of homes to be built in Australia over the next five years?

The federal government, along with the states, has set a target of 1.2 million homes to be built over the next five years.

How does the proposed reform fund aim to address the housing supply gap?

The reform fund is designed to provide federal assistance for states to implement productivity-enhancing reforms, thereby facilitating the construction of more homes efficiently.

What role does stamp duty play in the housing crisis according to the discussion?

Stamp duty is described as a tax on mobility, discouraging homeowners from downsizing, which in turn limits the availability of larger homes for families in need.

What recent action did Victoria take regarding stamp duty?

Victoria announced a one-year freeze on stamp duty for anyone buying a property off the plan, which is seen as a step towards addressing the housing supply issue.

What are some challenges businesses face that affect land development?

Businesses are currently facing increased costs associated with debt, labor, and materials, which impact their decisions on moving forward with land development.

How has productivity in the construction sector changed in recent years?

Productivity in the construction sector has declined significantly, with reports indicating that productivity on construction sites is down to about 2.5 days a week.

What is the Coalition's proposal regarding the National Construction Code?

The Coalition proposes a 10-year freeze on changes to the National Construction Code to reduce compliance burdens for builders.

What is the stance of the Building and Construction Authority (BCA) on changes to negative gearing?

The BCA does not support changes to negative gearing, favoring simplicity in the tax system and maintaining the principle that costs incurred in generating assessible income should be deductible.

How does the proposed reform fund relate to broader economic goals?

The proposed reform fund aims to drive productivity uplift not just in housing, but also in other areas, indicating its potential for broader economic impact.

What are some effective practices already implemented in various states that could be harmonized?

Successful practices include Queensland's excellent concierge service, New South Wales' approach to data transparency, South Australia's consolidated zoning system, and Western Australia's assessment methods, all of which could be harmonized across jurisdictions.