“Labor and the Liberals think they can tinker around the edges with a fundamentally broken housing system, but renters will punish them at the ballot box.”
The Greens’ measures are likely to lead to criticism that removing stock from the market would further tighten supply at a time when more homes are needed to lower prices.
Unlike the Greens’ $2.5 billion offer to the states to enforce a short-term freeze and long-term cap on rent rises, the Coalition’s assistant spokesman for housing affordability, Andrew Bragg, said governments could “hit the states hard” by potentially withholding GST or other federal funding to encourage the states to build more homes.
“NIMBY-ism is poison for young people, and when you see councils and states block developments, particularly apartment buildings, that is a disaster for young people,” Bragg said, speaking on the ABC on Sunday.
Under the GST deal put in place by the Howard government, all proceeds of the tax must flow to the states and territories.
The Coalition’s housing package, expected in the next few months, will expand a Scott Morrison-era pledge to open up superannuation for housing, and Bragg said new supply-side measures were being looked at, pointing to a New Zealand policy linking construction to funding.
Any move to tie GST to specific state policies would likely be fiercely opposed by those governments and require contentious federal laws.
Prime Minister Anthony Albanese used Bragg’s comments to claim the Coalition’s plan would hurt voters, as he made a visit to Western Australia – a key state in next year’s federal election.
“Now we know that WA is at risk … along with all other states being subject to threats by [the Coalition] to make cuts to the GST and hit the states hard where it hurts. That means less funds for education and health and infrastructure,” Albanese said.
Newly appointed Housing Minister Clare O’Neil vowed last month to find new ways to boost the supply of housing and curb the soaring cost of construction in a sign of how fiercely contested housing policy will be in the lead-up to the next federal election.
Inflation data last week showed a slowdown in growth in rents, which eased slightly to a still-elevated 6.9 per cent over the past year.
Nationally, CoreLogic’s measure of rents was unchanged for a second consecutive month, with annual values at their lowest growth rate since May 2021.
CoreLogic’s head of research, Eliza Owen, said a slip in net-overseas migration and a lift in investor activity was helping balance supply and demand for rentals.
The slowdown in Melbourne was likely affected by state tax policies as well as a run-up in supply.
“Supply is also a big factor for Victoria, where the state saw more dwelling completions over the past decade than any other state or territory,” Owen said.
While Melbourne lost residents during the depth of the COVID pandemic, it has since become the fastest-growing capital. It added more than 167,000 residents during the 2022-23 financial year compared with Sydney’s 147,000.
In Victoria, Treasurer Tim Pallas attacked Bragg’s comments on withholding GST funding as “divisive politics”, while state shadow treasurer Brad Rowswell called for cuts to state property taxes, which had risen to the highest in the nation.
Sydney’s median house value rose 0.3 per cent last month to $1,471,882. But over the year, Sydney’s median value has climbed by 3.6 per cent, lower than the city’s inflation rate of 3.8 per cent.
Across units and houses, values in capital cities rose 0.5 per cent in August to be up 1.3 per cent over the past three months. In the same quarter last year, values lifted 3.1 per cent.
While the Reserve Bank does not target house price values through its interest rate settings, it does watch for the so-called “wealth effect” of higher value encouraging people to increase spending.
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Source Agencies
