WITH housing affordability at the top of the political agenda at both a state and national level, the Planning Institute of Australia (PIA) has called on the Federal Government to acknowledge that tackling housing affordability is much more than a 'supply issue'.
PIA CEO David Williams said that despite record supply levels in recent years, prices have continued to rise in Sydney and Melbourne – proving that an increase in supply is not the solution.
"Housing markets are complex systems. A genuine solution needs to take into account where people work, shop, study and where they feel part of a community," Mr Williams said.
With the average median house price in Greater Sydney tipping $600,000 and Sydney CBD over $900,000, Mr Williams said the great Australian dream of owning your own home is undeniably becoming out of reach for Millennials.
In the statement last week, the Planning Institute said that while it welcomes the Federal Government's consideration of its role in financing affordable housing stock, all financial levers must be considered when rebalancing supply and demand.
"The Federal Government's establishment of a government lender as part of its affordability solution is a catch-up response after decades of neglect and only addresses a small part of a much larger problem," Mr Williams said.
"The Federal Government must seriously consider an overhaul of the Capital Gains Tax discounts and negative gearing policies to help overcome the lack of housing affordability".
PIA said it is not just the Federal Government but all levels of government that have their role to play in ensuring that Australia does not compromise its liveability by forcing young Australians to live on the fringes.
"State Governments play a key role in improving access to housing. The supply of a wide range of different types of housing is critical, including incentives for the delivery of affordable housing.
"Local authorities must develop local 'housing needs assessments' and set affordable housing targets at a grassroots level."
Mr Williams said now is the time for governments to look at innovative solutions to combat housing affordability.
"They need to work with planners and the industry to deliver more cost-effective housing for young Australians that sets Australia as a front runner in housing diversity, liveability and affordability," he said.
PIA is urging the Federal Government, when putting together their May budget, to change their narrow approach and address the range of factors beyond supply that are seriously impacting housing affordability.