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According to the Real Estate Institute of Australia (REIA), the steps to addressing Australia’s housing affordability and supply issues have long been voiced by real estate agents working on the front lines.
REIA has delivered three clear cut proposals to the federal MPs chairing the inquiry into affordable housing and supply: axe the tax, build more houses, and get government right.
Currently reviewing feedback from interested organisations and communities, the inquiry has received over a hundred submissions from stakeholders commenting on the tax and regulation frameworks that surround buying and renting practices in the Australian housing market.
REIA, in its role representing the nearly 47,000 real estate agencies across the county, has earmarked itself as well placed to contribute ear-to-the-ground analysis of the circumstances driving market behaviour, and what’s needed to keep the dream of home ownership alive and accessible for everyday Australians.
Among the organisation’s key recommendations within its own submission to the inquiry is reforming the stamp duty costs that are creating high barriers to entry for first time home owners in particular.
It’s not the first time real estate agents have sounded the alarm before on necessary reforms to stamp duty, the REIA pointed out. The institute’s submission outlines how upfront taxes are acting as both a major deterrent to Australians struggling to buy a home while lowering investor activity, which in turn places upward pressure on rentals.
“Thresholds for stamp duty and land tax have remained stagnant for over a decade,” REIA added. “This means that the significant rise in property values makes thresholds (i.e. median prices) far too low. Agents have called for higher tax-free thresholds and broadening of exemptions, especially for first home buyers, downsizers, and rightsizers.”
But expanded access to the market through tax reforms won’t address affordability issues if supply remains so tight. REIA’s second recommendation focuses on the need for more building activity, noting that figures from the National Housing Finance and Investment Corporation (NHFIC) show that issues of supply and demand are only expected to exacerbate in the coming years.
“From 2023 to 2025, on the back of a recovering economy and a return to normalisation of migration, new demand is expected to exceed new supply, highlighting the critical relationship between supply and affordability,” REIA commented. “In real estate agent’s terms, we must plan for this and build more new houses, in order to deal with both supply and affordability.”
None of this, in the eyes of REIA leaders, can be achieved unless governments at all levels get on the same page. On this aspect, in particular, REIA’s message is forthright: “A clear plan, involving the three levels of government and regular industry engagement, needs to be undertaken. A strategic approach will respond to current inefficiencies, data, and feedback from buyers, renters, and agents on the ground.”
According to REIA, a national plan should include the establishment of a government-led mechanism for tracking data on housing demand and supply. They want to see a system implemented that identifies targets for housing supply, land release, and national planning reform, where progress is regularly reviewed and reported.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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