New South Wales residents began the week with the announcement of a new Premier. Former state treasurer Gladys Berejiklian has replaced Mike Baird as the Premier of last year’s best-performing state – an announcement that Berejiklian herself gave as Treasurer, boasting record profits across the charts.
What’s at the top of the new premier’s to do list? Housing affordability. And no wonder, considering the latest statistics. According to data from CoreLogic, Sydney’s home values have gone up 15% in the twelve months to January. The current median house price sits at a staggering $830,000 – a figure out of reach for many first home buyers.
Premier Berejiklian has vowed to tackle the housing affordability crisis and claimed earlier this week that she is open to ideas from experts outside the government sector. Grant Harrod, CEO of LJ Hooker, has a few ideas.
Introduce affordable housing
There are two NSW state policies that aim to ease housing affordability. The state currently has the first home buyers grant, which was cut by a third back in January 2016, and the national rental affordability scheme, which the government distanced itself from in the 2014 budget. Harrod believes there needs to be more affordable housing incentives in order to provide housing for low- and middle- income families.
“At present, it has not been feasible for developers to provide affordable solutions,” Harrod says.
“The government, therefore, needs to step in with incentives to ensure the delivery of affordable housing can occur.”
Remove stamp duty
It appears the high cost of selling, buying and moving is causing people to reconsider. CoreLogic data shows that the number of total listings in Sydney is down 13.9% from January 2016. New listings are also down by 2.3%. Harrod says axing stamp duty would help increase the mobility of the population and encourage owner-occupiers to move into a property that suits their changing needs, without being slogged with an extra-large tax.
“This will ensure more properties become available for sale, helping balance supply and demand and ensuring more families get to grow up in their home of choice,” Harrod says.
Move government services and businesses
Around 90% of Australia’s population live in capital cities. Why? Because they tend to be within 10km of schools, employment hubs and shopping centres. To assist in the appeal of regional, often more affordable areas, Harrod is encouraging the government to consider decentralising businesses, households and government departments.
“Regionalisation will boost the economies of smaller regions and provide employees access to more affordable housing in these areas,” he says.
“It will also elevate some stress and demand on infrastructure, services and housing in capital cities.”