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Housing affordability – it’s time to act

By Rebecca Vassarotti - 20 April 2017 7

Isolated image of two hands on black background. House icon in the center, as a symbol of sale, rent, insurance and protection of real estate. Concept of sale, rent, insurance and protection of real estate.

It’s great to see that housing affordability is shaping up as a centrepiece of the upcoming Federal budget. While it is highly unlikely that there will be changes around negative gearing and capital gains tax which are the areas that would make the most difference, it is still encouraging to see that the Federal Government has realised that they do have some levers to improve housing affordability across the country.

We know that housing affordability is a shared responsibility, and will not be solved by federal action alone. As such, the upcoming Territory budget provides a real opportunity to focus on local measures that will make housing more affordable in Canberra.

Contrary to many people’s understanding, we have a significant housing affordability issue in the ACT. Our high average incomes mask the reality that access to safe and affordable housing is becoming increasingly difficult for many of our residents – whether people are looking to buy or rent. In addition to the ACT having the second highest rate of homelessness in Australia, we have very low vacancy rates in the private rental market. We have long waiting lists for public housing and a low proportion of affordable housing options. As is the case in many capital cities, we are seeing housing values rising rapidly which is increasingly squeezing first home buyers out of the market.

Housing affordability is an area where consensus is building around what could make a difference. Last year we saw an unlikely alliance between ACT property industry, business, community groups, unions and professional groups where they released a joint statement that called for action. They called for a single Minister to be responsible for both planning and housing, for the Government to develop a territory-wide housing strategy, work to update the ACT Affordable Housing Strategy and for improvements to be made around the accountability of public agencies who are responsible for affordable housing targets. A number of jurisdictions are getting serious about tackling the issue and new ideas are emerging – such as the idea of a ‘vacancy tax’ that was recently raised by ACT Greens MLA Caroline Le Couteur and is currently being investigated as a means to discourage properties staying empty.

Locally there have been some good initiatives introduced. A standout is the ‘land rent scheme’ which reduces the costs of homeownership by enabling lessees to rent land from the Government at a discounted rate and meaning that a loan is only required for the value of the actual home. However, there is much to do to respond to this issue systemically and this budget provides the perfect opportunity to commit to strong local action.

There are positive signs that this may occur. Housing issues are heavily referenced in the ACT Parliamentary Agreement and so we should see some of these proposals implemented in this year’s Territory budget. Let’s hope we see a real commitment to a renewed Housing Affordability Strategy – something that has been languishing in recent times. The election saw commitments made to bring a number of innovative models to Canberra which could work to increase affordability and reduce homelessness. These include MyHome, which provides housing and support for people with mental illness, another Common Ground development which provides housing and support for people facing homelessness, HomeGround, a not-for-profit real estate agent and the Nightingale model which aims to cap development profits and involve purchasers in the design of developments. This budget is the time to provide the funds for these initiatives to get off the ground. This budget also provides the opportunity for increased investment into community housing, ongoing public housing renewal and the bolstering of support for homelessness support services that continue to face funding uncertainty.

We will never have a better chance to make a difference in ensuring that all of us have a place we call home and somewhere safe to lay our heads each night. Let’s hope we make the most of this opportunity.

What do you think are the initiatives that will make the most difference in making housing more affordable in the ACT?

Rebecca is a board member of Community Housing Canberra, an affordable housing company. She is also an active member of the ACT Greens and ran as a candidate in last year’s Territory election.

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7 Responses to
Housing affordability – it’s time to act
1
HiddenDragon 4:16 pm
20 Apr 17
#

The Land Rent Scheme is certainly better than nothing, but in some respects, it is symptomatic of just how costly housing has become, in that households with incomes of up to $160,000 p.a. (and higher when there are dependent children) need to be given the option of renting land, because “buying” it is unaffordable.

2
Rachel Moore 6:46 pm
20 Apr 17
#

Great article Rebecca! I think Canberra needs to keep having this conversation until we get it right. MyHome, Common Ground, and HomeGround are all amazing initiatives in the ACT.
But I think though there is something being left out of the conversation in relation to housing. The cost of living. Bills, food and entertainment.

You can’t buy a coffee in Canberra for under $4 in most cafes. Add any variation to a traditional coffee, such as changing the milk and the $4 quickly turns into $6. A simple sandwich costs the best part of $15 and a special meal in a restaurant with a loved one almost requires a small banking loan.

I think we have lots of people in Canberra who make ok money, but the cost of living is just too high. Have a scan around your local Woolworths or Coles, then go to someone else’s local Woolworths or Coles. Identical items are different prices. Look again at that same item in another city and the price is again different. Just to get an electrician to come to your house to fix an essential house hold item such as heating often requires a $150 call out fee. That doesn’t cover labor. Just a call out fee.

I hope that this conversation continues to transform into a positive one. Everyone deserves a place they feel safe and to feel like they belong. Stable housing does this.

3
pdpd 8:28 pm
20 Apr 17
#

Just had a look at allhomes

Checking out Queanbeyan I see they have 84 properties for sale that are under $300,000, of which 22 properties are under $200,000. Many of these properties are renovated. One has a communal swimming pool.

There are still properties in Canberra under $400,000 if folks are happy to live out in West Belco or the Deep South.

If people are looking for their first home, they should not be afraid to live amongst people who happen to be working class or recently arrived from overseas. If you make an effort to mingle amongst people who aren’t middle class, you’ll find your new neighbours to be interesting and decent.

Put it this way, if you are looking for a home that has mature oak trees planted on wide grasses footpaths, forget it! Leave the inner north and south to the wealthy and privileged elites. They are pretty boring folk when you scratch the surface.

4
Glynis Quinlan 9:44 pm
20 Apr 17
#

The rate of homelessness in the ACT is an absolute tragedy. Whatever else we do as a city, we need to make sure the most vulnerable are looked after. People can go down hill so quickly and it’s heartbreaking to think that so many children and young people make up those homelessness ‘statistics’. Can the government please consider putting less important things on hold and instead provide more funding for homeless services.

5
emd 11:28 pm
20 Apr 17
#

There are lots of good programs out there to provide affordable housing to low income people, and the evidence is pretty clear that negative gearing and CGT discounts are inflating the cost of rental housing for the benefit of corporations and super funds. The only thing missing seems to be political will to actually do something about it, instead of just telling everyone to work harder/save more/buy further away from where they have jobs/schools/family.

6
MarkE 8:41 pm
27 Apr 17
#

Housing Affordability problems in Canberra is a problem caused by corrupt politicians and senor public servants by their drip feeding of land into the Canberra housing market to prop up the value of their own properties.

It costs about $50,000 to service a block of land with roads, power, sewerage etc. In places other than Canberra you can build a 3 bedroom brick veneer house for $180,000; so why can’t I get a house and land package in in Canberra for $230,000?

The Government just drip feeds the land at a premium price at a pace well below demand to keep prices up. They know what they are doing and it is deliberate corruption. A quick look at a map and you can see space to double the residential space in Canberra. Not competent to do this yourself? Outsource it to companies who can.

Struggling to buy a house? Don’t worry, just wait. For several decades the major global financial crises have been caused by the meddling of the US Federal Reserve Bank, which is a privately owned, for profit corporation. Their latest mess is an enormous bubble in the US bond market. When this bursts world interest rates will rise dramatically. It is possible to make a case for mortgage rates going to over 20%. If this happens you will have a wide range of homes in foreclosure to choose from at bargain basement rates.

The Reserve Banks of the world have some control over interest rates but the bond market is the elephant in the room. The Federal Reserve has a balance sheet of US$4.5 trillion; the US government bond market is worth about US$37 trillion; but riding on the back of this is the interest rate derivatives market that has a face value of over US$750 trillion. When the derivatives market moves the Fed Reserve won’t have the resources to stop it for a morning. There will be hedge funds making trillion dollar profits out of bursting the band market bubble.

Anyone doing “property analysis” without looking at the above is a hopelessly naive amateur.

In short the Australian property market is in for falls of between 30% and 70%.

7
MarkE 8:45 pm
27 Apr 17
#

Rachel Moore said :

Great article Rebecca! I think Canberra needs to keep having this conversation until we get it right. MyHome, Common Ground, and HomeGround are all amazing initiatives in the ACT.
But I think though there is something being left out of the conversation in relation to housing. The cost of living. Bills, food and entertainment.

You can’t buy a coffee in Canberra for under $4 in most cafes. Add any variation to a traditional coffee, such as changing the milk and the $4 quickly turns into $6. A simple sandwich costs the best part of $15 and a special meal in a restaurant with a loved one almost requires a small banking loan.

I think we have lots of people in Canberra who make ok money, but the cost of living is just too high. Have a scan around your local Woolworths or Coles, then go to someone else’s local Woolworths or Coles. Identical items are different prices. Look again at that same item in another city and the price is again different. Just to get an electrician to come to your house to fix an essential house hold item such as heating often requires a $150 call out fee. That doesn’t cover labor. Just a call out fee.

I hope that this conversation continues to transform into a positive one. Everyone deserves a place they feel safe and to feel like they belong. Stable housing does this.

You are starting to feel the Canberra Tax. This is the cost of doing business in Canberra due to the high charges and excessive regulation of business.

Remember the ACT Government is sinking deeper and deeper into debt. They have taken on the light rail that has been estimated to cost $14,000,000,000 to build the full network. That is about $90,000 per household.

Canberra voted for it and now they have to pay for it.

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