The government has confirmed its commitment to add a supply-side element to its housing policy, through the formation of a A$10 billion Housing Australia Future Fund which will build 30,000 social and affordable housing properties in its first five years.
The Minister for Housing Julie Collins met with state housing ministers last week, and following the meeting announced details of the government’s housing policy agenda, which includes: the Housing Australia Future Fund; Help to Buy, a new shared equity program; adding the Regional First Home Buyer Support Scheme to an expanded Home Guarantee Scheme; and the establishment of a National Housing Supply and Affordability Council.
Details of the government’s agenda come a couple of weeks after the release of a detailed report on the effectiveness of policies to assist first home buyers, undertaken by the Australian Housing and Urban Research Institute, which argued that the type of demand-side assistance that has been the dominant approach in Australia for the past 40 years “primarily acts to bring forward first home purchases by households already close to doing so, rather than opening home ownership access to households otherwise excluded. In doing so, these measures add to demand and hence house prices.”
The AHURI report, Assisting First Home Buyers: an International Policy Review, also argued that demand-side assistance, such as grants, government-backed loans, low-tax savings schemes and stamp duty concessions, is often weakly targeted in terms of any express objective to enable home ownership for households otherwise excluded.
It estimated that more than $20.5 billion was spent by Australian governments in stamp-duty concessions and cash grants to first home buyers in the decade to 2021.
“This sum could have funded around 60,000 social housing dwellings, as a non-inflationary form of stimulus investment,” the report said.
The research highlighted the scope for active supply side contribution to affordable home ownership through state land development agencies.
In most of the seven comparator countries examined in the research, first home ownership support involves a wider range of policy instruments than in Australia. These include supply side measures such as generation of homes for low-cost sale through government commissioned land development.
The government’s planned Help to Buy program can also be classified as a supply-side measure because, according to AHURI, such policies enable a housing organisation to develop a dwelling for renting to an aspiring first home buyer for up to a decade, while the occupier accumulates a mortgage deposit to take ownership of the dwelling.