Housing affordability crisis

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Federal Treasurer Joe Hockey caused a storm this week when he advised first-home buyers to “get a good job that pays good money“.

His comments have been criticised by social welfare agencies for ignoring the root causes of unaffordable housing.

Rising housing prices across the country, especially in Sydney and Melbourne, have pushed residential property beyond the reach of many Australians.

A HSBC report released yesterday found that Melbourne house prices have risen by 22 per cent in the past three years.

While the debate on affordable housing has focused on first-home buyers, rising property and rental prices also have a significant impact on people on welfare.

The latest Anglicare Australia Rental Affordability Snapshot report indicates that affordable housing remains inaccessible for most low-income individuals and families.

Of the 65,614 properties surveyed, less than 1 per cent were deemed affordable for single people on government payments.

“A secure home, together with employment and health are three imperatives that allow individuals to participate meaningfully in society,” the report stated.

“Our national economy and the stitching of our social fabric are shaped in part by unaffordable housing and in that way, we all bear the brunt.”

The report found that the lack of affordable housing decreases the likelihood of women leaving abusive relationships. Insecure rental tenure can also lead to disruptive school schedules for children, potentially impacting their learning progress.

One of the report recommendations was to reform current negative gearing rules.

Negative gearing reduces the tax investors need to pay by deducting losses made on rental properties from their income. Critics of negative gearing say that it encourages investors to buy more property at the expense of people purchasing their own homes.

Mr Hockey has ruled out changing negative gearing, saying that it will lead to an increase in rents.

Labor is considering a proposal to limit the use of negative gearing to new properties only. The topic is expected to be discussed at a Labor National Conference next month.

The Greens have proposed abolishing negative gearing for new investments and contributing the proceeds to social and public housing. They believe this will open the space for first home buyers to enter the market and create new housing for people on low incomes.

Image by Don Solo via Flickr.

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