Low and middle-income Australians struggling to crack into the housing market will soon have a chance to buy with a smaller deposit with a helping hand from the federal government.
Labor has finally got its Help to Buy scheme across the line after months of debate, with the Greens agreeing to wave through the scheme and a separate policy aimed at delivering more build-to-rent developments.
Both pieces of legislation are all but set to pass parliament.
Housing Minister Clare O’Neil welcomed the end of the political stalemate, but warned problems in the sector would not be fixed immediately.
“This is not a silver bullet and it was never meant to be,” she told Nine’s Today program on Tuesday.
The Help to Buy scheme is a shared equity program that will allow 10,000 first-home buyers each year to purchase a house with a contribution from the government.
The build-to-rent policy involves tweaks to tax settings to spur foreign investment in a specific style of housing development where homes are rented rather than sold.
Australian Housing and Urban Research Institute managing director Michael Fotheringham said both policies were sensible but there was more to be done.
“There’s no one policy or regulation that’s going to fix our housing challenges,” he told AAP.
Shared equity schemes are not a new concept, he said, with state governments successfully running similar programs for decades.
While a demand side measure, Dr Fotheringham said well-designed shared equity programs were only marginally inflationary and much less likely to send property prices soaring compared to first-home buyer grants.
That’s because there are a set number of places, recipients must earn below a certain income threshold and there are price limits on home purchases.
“That restrains the inflationary impact,” Dr Fotheringham said.
A debate between Greens housing spokesman Max Chandler-Mather and opposition housing spokesman Michael Sukkar on Tuesday confirmed housing policy will be a hot-button issue at an upcoming federal election.
Asked if a coalition government would repeal the government shared equity and build-to-rent tax changes if they return to power, Mr Sukkar said his party “unashamedly oppose both of those measures”.
“They’re terrible policies, which is why we are, in many respects, unsurprised but dismayed that the Greens are now supporting it,” he said.
At the National Press Club’s policy debate, which the housing minister was invited to but did not attend, Mr Chandler Mather said the Greens were “only just getting started”.
“It is reasonable to feel terrified and scared about the housing crisis we face,” he said on Tuesday.
“We have a government who is willing to leave behind millions of renters who will never be able to buy their own home, and every day that the government doesn’t take substantial action is a sad day,” he said.
The minor party was unable to get the government over the line on its key demands of caps on rent increases and phased-out property tax concessions but promised to take the fight to the election, due by May.
