A bold plan from the Federal Labor Government to tackle housing affordability has been well received by the housing industry following repeated warnings of an affordability crisis in Australia.
A paper called New Directions for Affordable Housing, released earlier this month by Labor, contains proposals to address the decline in housing affordability among Australian families.
It points to a succession of interest rate rises and a widening of the gap between household income and mortgage repayments as the main reasons why many young Australians are being 'locked out' of owning their own home and those that do own them can no longer afford to keep them.
The document states: "The stark reality is that it is getting more and more difficult for young Australians to enter the housing market. The rise in house prices in recent years has fuelled anxiety amongst parents that their children and grandchildren will never afford to buy homes of their own."
Solutions to address the crisis range from retargeting the first home owners grant (FHOG) to those who need it most, to giving tax incentives to special home deposit savings accounts. It also advocates the greater use by state governments of shared equity schemes, plus a crackdown on predatory lending.
Other possible solutions in the 'new direction' are various rental schemes to introduce cheaper rent for low income people, increasing the stock of public housing via private/public partnerships and encouraging property investors by doubling the tax allowance on depreciation.
The Housing Industry of Australia (HIA) said the paper provided a much needed framework for a dynamic and effective national housing policy.
A statement from HIA said: "The paper acknowledges that the industry is plagued by supply constraints and recognises the requirement for policy responses across a wide range of housing issues."
The Real Estate Institute of Australia (REIA) was also positive about the announcements.
Its statement said: "We applaud the proposal for a first home savings account with low taxes and low overheads. REIA has called for several years for first home buyers to have early access to the voluntary contributions they make to superannuation for a home deposit because of the favourable tax treatment."