Australia

Governments making no progress towards achieving affordable housing objective: COAG Reform Council

MORE than three in every five of the lowest income renting households pay more than 30 per cent of their income on rent, according to the latest analysis by the COAG Reform Council that was publicly released late last month.

The Council, in its third report under the National Affordable Housing Agreement, examined governments' progress towards achieving the objective that: "'Australians have access to affordable, safe and sustainable housing."

Council Chairman, Paul McClintock, said the report shows that in 2009–10, 61 per cent of the lowest 10 per cent of Australian households by income were in rental stress. This is up from 49 per cent in 2007–08.

The report, which is for the 2010-11 period but dependent upon the availability of data, also shows that for the lowest 40 per cent of households by income, the proportion in rental stress in 2009–10 was 42 per cent, an increase on the 37 per cent reported in 2007–08.

In 2009–10, affordability for renters was significantly worse in NSW than the national average, while South Australia and the ACT were significantly more affordable.

In addition to the poor results for rental affordability, between 2008–09 and 2009–10:

  • Fewer homes were affordable for low and moderate income households to buy;
  • Underlying demand for housing exceeded supply of new dwellings;
  • The proportion of low income households in mortgage stress remained largely unchanged; and
  • The rate of home ownership remained the same.

Mr McClintock said that while the Commonwealth, State and Territory governments all committed to make housing more affordable, "none of the indicators we are able to report show any progress toward achieving this objective."

Following the release of the report, the Housing Industry Association (HIA) said it was further evidence of the housing pressures facing renters and home buyers.

"Governments have not made the necessary headway to address the inefficient taxes, long planning and land release delays, and the myriad of other barriers which artificially push up the cost of new housing and restrict new housing supply," said HIA Chief Executive Officer, Graham Wolfe.

"The situation can be turned around, but it requires action and that action needs to occur now. The private sector can't fix these issues – regulations and taxes are set by our parliaments and local governments – these bodies need to take serious action to make inroads to the housing shortage and hence to affordability," Mr Wolfe said.

Real Estate Institute of Australia (REIA) President, Pamela Bennett, said the report should be a clear signal to the government that a concerted plan of action is urgently needed to address the issues that impact on the affordability of renting and buying.

"We know that a myriad of supply-side issues such as inefficient taxes, excessive red-tape and land-release delays are holding back the building of homes whilst at the same time demand is increasing. If we don't do something now, the problem is only going to get worse," Ms Bennett added.

Australians for Affordable Housing (AAH) said state and federal governments need to go back to the drawing board, with the National Affordable Housing Agreement "clearly not working."

"For three years in a row the COAG Reform Council has reported that housing affordability is getting worse, particularly in the rental market," said AAH campaign manager Sarah Toohey.

AAH said there are three key changes needed to turn the National Affordable Housing Agreement around, including the establishment of an Affordable Housing Growth Fund; improved transparency of government spending; and to index the agreement properly.

The COAG Reform Council's 'Affordable Housing 2010–11' report is available from the COAG Reform Council website at <http://www.coagreformcouncil.gov.au/>.

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