Members of the Henry Halloran Trust regularly appear in the media to comment on housing, development and sustainability issues and policy.
Architecture and Design quoted Professor Nicole Gurran and Dr Cameron Murray on how political legisation could ensure a certain percentage of homes are affordable and solely reserved for first home buyers.
ABC 7.30 interviewed Professor Nicole Gurran for a special report on housing affordability and the latest major announcement from the Coalition, that would see first home buyers use their super to help them with their deposit.
The Sydney Morning Herald quoted Professor Nicole Gurran on how both policies would put only modest upward pressure on prices at the moment as rising interest rates pulled prices down, but said Labor’s shared equity scheme was marginally less risky for households as it offered a smaller mortgage.
ABC Online quoted Professor Nicole Gurran about how rent assistance payment has been too low for some time and that if the government wants to improve the cost of living, increasing the rental assistance payment is a logical solution.
Your Investment Property cited Professor Nicole Gurran about how The Budget must restore investment in new social and affordable housing supply and increase the rent assistance subsidy for low-income earners.
By Nicole Gurran, Emma Baker and Peter Phibbs
March 31, 2022
Opinion piece originally published in the Sydney Morning Herald
For a government professing concern about home ownership, new supply and affordability, the measures in this week’s budget fell flat – benefitting few, largely ignoring renters, and extending underperforming existing policy.
To some extent there were no surprises. The rhetorical emphasis on home ownership was laid down this month in the parliamentary report on Housing Supply and Affordability in Australia. Chaired by Liberal MP Jason Falinski, the report framed Australia as a “home-owning democracy” where “living under a landlord” represents a failure of that ideal.
Prime Minister Scott Morrison’s suggestion this week that the best way to help renters is to “help them to buy a house” shows us how deep this belief is. It ignores the reality that roughly a third of us rent, a third own our homes outright, and a third have a mortgage. The housing situation of very few Australians will be touched by any of the announcements.
The headline giveaway in the budget extended existing government guarantees for first-home buyers and will allow more than 50,000 households to take out low-deposit loans. It will no doubt be attractive for moderate income households able to borrow up to $760,000 for a property. But with interest rates set to rise, and the government’s own budget papers forecasting house prices to cool over the next 12 months, the decision to extend the scheme – which will stimulate demand without creating new supply – seems puzzling.
The budget also offers some targeted support for buyers of new homes in regional and remote areas. But the regional crisis is largely in the rental sector, where immediate relief is urgently needed.
Australia’s roughly 8 million renters have largely been left in the cold. Our 500,000 very low-income renters will remain in rental stress, and our public housing waiting lists will remain essentially unchanged. While about 1.2 million negatively geared landlords continue to claim rental losses, pleas to increase the Commonwealth Rental Assistance subsidy (currently about $4.7 billion a year) have been ignored.
There’s no real additional commitment to social housing, aside from a $2 billion extension to the affordable housing bond aggregator, extending the amount available for non-profit providers to borrow via the National Housing Finance and Investment Corporation. This will support an estimated 10,000 new social housing units, against a current waiting list of about 160,000 households.
Perhaps the real constraint is a fear that effective housing affordability measures might cause property prices to fall – undermining consumer confidence, dampening historically high rates of new housing construction, and triggering a backlash from voters now exposed to eye-watering levels of debt.
By Nicole Gurran
May 2, 2022
Opinion piece originally published in the Sydney Morning Herald
With cost of living pressures starting to bite, housing affordability has moved to centre stage of the election campaign, but the policies of the two major parties are unlikely to deliver much relief to home owners or renters because when it comes down to it, neither party wants house values to fall.
Labor hopes to woo voters with a promise to help 10,000 aspiring first home buyers into the market via a new shared equity scheme. By the government taking on up to 40 per cent of the price of a new home (or 30 per cent of an existing property), Labor’s scheme will help moderate-income earners by reducing the amount they need to borrow upfront. It will allow qualifying households with at least a 2 per cent deposit to get into the market, and allow them to ultimately buy back the government’s equity share in their property over time, as their circumstances improve.
Shared equity schemes can help moderate-income earners because they reduce both the total loan amount as well as the deposit needed to buy a home. Several Australian states have modest schemes like this in place and they are well established in Britain. But unless they are targeted to dedicated new housing stock, Labor’s scheme may simply contribute to more house price inflation. The Greens’ shared equity scheme aims to underwrite a more ambitious 125,000 homes and is targeted at key workers.
The Liberal Party’s home deposit guarantee scheme allows moderate to higher income earners to take out home loans with only a 5 per cent deposit (or 2 per cent for single parents). Labor has a similar scheme for up to 10,000 first home buyers in regional areas. While likely to be popular with eligible first home buyers, experts have criticised the approach as fuelling demand without contributing to new housing supply. Worse, the scheme encourages first home buyers to take on very high levels of debt, at a time with interest rates are projected to rise, but the property market expected to cool.
What about renters? And with rents beginning to escalate especially in regional areas, the fastest relief for renters would be to increase rental subsidies, but neither party has promised to extend or increase rent assistance beyond the consumer price index.
The two major parties do not want house prices to fall because high house prices make the two-thirds of Australians who already own their homes feel wealthier, and that supports consumer confidence. Buoyant house prices also support new construction, one of Australia’s largest industries of employment. The combined spectre of rising costs of living, interest rate hikes, and falling house prices will exacerbate pressures across the entire economy.
With these economic headwinds gathering, it is mystifying that neither of the major parties are offering a significant boost to new social and affordable housing supply. Labor has made a modest commitment to increase the supply of social and affordable homes, funding 30,000 over the next three years. But with research pointing to a current undersupply of about half a million such dwellings, this promise is not enough.
For the past two decades, both sides of politics have emphasised housing supply as the answer to worsening affordability. But while the private market has delivered record levels of housing construction over the past five years, the supply of social housing has barely changed. With a cooling property market, the economic impetus for new private sector housing construction will also falter, affecting the construction industry.
In the past, government support for social housing construction offered counter-cyclical relief to the building industry, while ensuring that the supply of new homes matched population growth, not the vagaries of the housing market. Labor’s election policy does signal that the Commonwealth will resume its leading role in setting a national housing and homelessness plan, something which is sorely lacking in Australia.
Let’s hope that before the election, all parties add more weight to their promises around housing. To help first home buyers, any shared equity program should be linked to affordable and environmentally resilient new construction, leveraging the land use planning powers of the states. A much higher commitment to fund social and affordable housing is also necessary to meet existing backlog and forecast need. And Commonwealth Rent Assistance must be raised.
Our states are crying poor. They wouldn’t if they charged for rezoning
Dr Cameron Murray's article titled 'Our states are crying poor. They wouldn’t if they charged for rezoning like the ACT', published in The Conversation.
The truth behind the housing supply nonsense
Dr Cameron Murray's article titled 'The truth behind the housing supply nonsense', published in The Fifth Estate.
We’re at a fork in the road: do we choose neighbourhoods to live, work and play in?
The Conversation - Our Practitioner in Residence – Halvard Dalheim.
Living and working local - is now the time for change?
On RNZ talking about his Conversation article – 10 minutes 37 second.
NSW missing out on $8 billion a year from failure to tax land-rezoning, inquiry told
Dr Cameron Murray and our Director Professor Peter Phibbs on funding mechanisms for urban infrastructure, published in The Sydney Morning Herald.