Australians battling to buy their first home could soon be allowed to use their superannuation as security for a home loan, with stamp duty facing the axe following a landmark inquiry into housing affordability.
Sixteen recommendations to remedy housing affordability issues in Australia were made in the parliamentary committee report from MPs.
One of the report’s recommendations is allowing prospective first home buyers to access superannuation as security for a home loan after saving for a deposit was deemed to be the biggest issue for those trying to enter the market.
First home buyers could be permitted to use their superannuation as security for a home loan and stamp duty may be axed following a landmark inquiry into housing affordability (stock image)
The latest ANZ CoreLogic Housing Affordability report estimates that based on households saving 15 per cent of their gross annual income, it would take a record 10.8 years to save a deposit for a house and nine years for a unit.
‘The Committee recommends that the Australian Government allow first home buyers to use their superannuation assets as security for home loans,’ the report read.
‘The committee recommends that the Australian government develop and implement policy allowing first home buyers to use their superannuation balance as collateral for a home, without using the funds themselves as a deposit, thereby expanding the opportunity for home buyers.’
State and local government levies and highly regulated planning restrictions were also listed as hurdles to home ownership.
The report suggested state and local governments improve affordability and increase housing supply – with housing supply issues to be improved in conjunction with first home buyers being able to access their super.
The inquiry, undertaken by the Coalition-stacked Standing Committee on Tax and Revenue, provided 16 recommendations to remedy housing affordability issues in Australia (pictured, prospective buyers at a home in Strathfield, Sydney)
State and local government levies and highly regulated planning restrictions were also listed as hurdles to home ownership (pictured, a Sydney house auction)
Sydney’s median house price was $1,410,128 in February, following a 26 per cent annual increase.
Committee chair and Liberal MP Jason Falinski wrote in the report foreword that Australian cities were ‘some of the least densely populated in the world’ and argued for state and local governments to increase urban density.
It was also recommended that stamp duty, labelled in the report as an ‘inefficient tax,’ be scrapped in favour of a a ‘broad-based’ land tax.
Falinski rejected other factors that some have suggested contribute to high property prices such as tax concessions.
‘There is a tax problem, but it sits with state and local government, and the real big issue as the analysis shows is planning laws,’ he told the ABC.
‘Negative gearing and capital gains tax concessions in the top end of the market are adding possibly 4 per cent to the price, in some parts of the market it’s not actually adding anything to price.’
Committee chair and Liberal MP Jason Falinski (pictured) wrote in the report foreword that Australian cities were ‘some of the least densely populated in the world’
The report recommended that stamp duty, labelled as an ‘inefficient tax,’ be scrapped in favour of a a ‘broad-based’ land tax (pictured, an auction in Melbourne)
In the report foreword, the Liberal MP rubbished calls for the Reserve Bank of Australia (RBA) to raise interest rates to lower house prices, saying it’s one of the ‘most absurd ideas in Australian public policy’.
In the dissenting report, Labor Members of the Committee largely disagreed with the findings as they state the report failed to ‘set the frame through which the Committee measured desired overall outcomes’.
They also blamed the ‘Chair’s focus on supply,’ time framing issues and recommendations that are ‘poorly thought through’ and ‘badly explained’.
The report reviewed how home ownership rates have plummeted over the years from 72.5 per cent in the 1966 census to 62.7 per cent as of 2019, with the rate continuing to drop.
It also examined how Australia’s five largest cities have been ranked in the top 20 least affordable housing markets in the world, with Sydney ranked second and Melbourne fifth.
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