PRODUCTIVITY COMMISSION’S HOUSING AFFORDABILITY REPORT SUPPORTS REIA’S PLAN

October 2nd,2022

The Real Estate Institute of Australia (REIA) President, Mr Hayden Groves has welcomed the Productivity Commission’s report into housing affordability adding that “it supports REIAs plan for addressing the housing crisis.”

 

Mr Groves said the Productivity Commission’s Housing Affordability Report reiterates REIA’s plan for addressing affordability through a comprehensive approach covering all levels of government and includes increasing housing supply.

 

“Addressing the constraints to supply, be it planning rules, approval times and costs, funding and skills availability are crucial.

 

“What the report found was that assisting prospective home buyers increases the number of people wanting to buy a home but that the additional demand, if not accompanied by an increase in the number of homes available, places pressure on house prices and reduces housing affordability.

 

“The main barrier preventing many prospective home owners from purchasing a home is saving a deposit. The average first home buyer deposit now exceeds 80 per cent of average annual household disposable income. With larger deposits required, first home buyers are taking longer to save a deposit.”

 

Mr Groves said the Productivity Commission report found the National Housing and Homelessness Agreement was intended to improve access to affordable, safe and sustainable housing but has, so far, been ineffective. It does not foster collaboration between governments or hold governments to account. It is a funding contract, not a blueprint for genuine reform or an agreement for coordinated policy action.

 

“The focus of the next Agreement should be on improving the affordability of the private rental market.

 

“House prices are often the focus of debates about housing affordability, but rents are a better reflection of the true cost of housing. Rents reflect how much it costs to have a place to live, whereas house prices capture both this value and the value