MB often refers to Treasurer Scott Morrison as “Australia’s real estate treasurer” because of his close links with the Property Council of Australia (PCA), where he served as National Manager of Policy and Research between 1989 and 1995.
We also frequently deride the Turnbull Government for its staunch defence of negative gearing, and its blatant lies surrounding the issue, as well as its support of Australia’s mass immigration ‘Big Australia’ policy, which is designed in part to keep the property industry well fed with extra demand.
Not happy with its already pervasive reach within the Coalition, the Real Estate Institute’s (REIA) President, Malcolm Gunning, has today doubled down on his call for the federal government to establish a dedicated “property minister” to further the industry’s interests:
Housing affordability has declined across the country in all states and territories…
REIA President Malcolm Gunning said the December quarter 2017 edition of the Adelaide Bank/REIA Housing Affordability Report found the proportion of median family income required to meet average loan repayments increased by 1.3 percentage points to 31.6 per cent over the quarter.
…any major improvement is going to come from a considerable increase in supply… A report by the Grattan Institute, report Housing Affordability: Re-Imagining The Australian Dream concurs with this and says that industry needs to build an extra 50,000 homes a year for a decade so that house prices are 5 to 20 per cent lower than they would be otherwise be.
Mr Gunning said this may appear any easy prescription but the reality is that unless there is a coordinated and aligned approach by all three levels of government this will not occur.
“We need to address this with some urgency and reform the planning and approval process. We need all tiers of Government involved and implementing change,” Mr Gunning said.
“REIA believes a first step in this is the appointment of a Minister of Property Services. This would also recognise the importance of the property sector as a driver of economic growth and employment. Property investment supported by historically low interest rates has been a significant contributor to growth in the Australian economy since 2013/14 as we transition away from a decade-long reliance on mining,” he concluded.
First, this site has long called for a dedicated housing ministry within the Turnbull Government, as well as an overarching national housing policy. These would serve the national interest far better than the “property minister” proposed by the REIA, which is clearly intended to serve the real estate industry first and foremost, which is already heavily favoured by the Turnbull Government.
Second, the primary reason why housing supply has fallen so far below demand is because immigration has been ramped-up to triple the historical average for no good reason, which has driven a doubling of Australia’s annual population growth:
Australia is building more dwellings than ever, suggesting a lack of supply is not the primary problem. Rather, this supply is being overrun by extreme immigration-driven population growth, supplemented by other distortions like negative gearing and foreign buyer demand, which the REIA staunchly supports:
A comprehensive housing reform program would fix the demand side of the housing equation first, while also undertaking longer-term supply-side reforms to planning and land-use.
