PASSIONATE CONSTRUCTION

The solution to Australia has more to do with tinkering construct modifiers than the political will to act.

The “fix” is more about the politics of supply than the economic rationale, with Treasurer Scott Morrison already warning the Government will not “go back to the dark ages”.

But what is the “fix”?

The first step, says one of the experts, is to stop the supply of new housing, with new homes built “at market rates”.

The second step is to allow more people to live in those existing houses, by re-creating existing supply.

That is the plan of the Australia Housing Agency, which was set up by the Gillard Government in 2014.

Its first proposal, unveiled in July, is a 10-year-plan to create 100,000 new homes a year, a number that would need to be matched with a 10 per cent increase in housing supply.

But the plan does not offer a fix for the current supply crisis, which is causing housing prices to soar.

There is currently about $5.3 billion in affordable housing available, according to the National Housing Foundation, a government body that manages about $2.3 trillion in federal and state-owned housing.

But a growing number of experts believe the government should go much further.

“There’s a lot of talk about fixing the supply problem.

But there’s no fix for affordability,” says Nick Tisdale, a professor at Griffith University’s Centre for Housing Policy.

So what is going on?

The problem is not that people are moving to cheaper accommodation, but that they are not getting into new housing.

It is “the affordability gap,” says Tisdales, referring to how much people are paying for the same house in Sydney and Melbourne.

That gap is estimated at about $700 a week for families with children.

In Sydney, the average house price is $1.7 million, while in Melbourne it is $2 million.

As a result, the cost of living in Australia is “extremely unaffordable”, Tisdalys says.

And this “affordability gap” is likely to grow further as Australians’ incomes continue to rise, he says.

The problem goes beyond housing affordability, he argues, as it also has a knock-on effect on people’s mental health.

For example, a study released this month by the Institute of Public Affairs found that while the “psychological distress” associated with housing is lower for those living in affordable homes, those living with a higher cost of rent are more likely to have a negative impact on mental health as a result.

This is because “affordable housing costs more than housing, and people are more susceptible to stress and anxiety” from being on a tight budget.

But what can the government do?

It could increase the amount of affordable housing the Government provides.

Currently, the Government allows local councils to increase their allotments to 60 per cent of housing needs, while some local councils have been able to increase that by up to 30 per cent.

The Government can also create a national “affairs council” to provide assistance for the purchase of more affordable housing.

“There is a lot that needs to be done in terms of the affordability of housing and housing affordability,” Mr Tisdals says.

“We need to ensure that we are not going backwards.”

Topics:housing,housing-industry,housing,government-and-politics,wealth-and-$10-billion,wealths,housing—state-issues,government,australiaFirst posted May 18, 2020 11:47:50Contact Chris EmslieMore stories from New South Wales

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