Trading in housing futures

But tweak this happy scenario just a little: Gemma and Sam’s parents are Aussie battlers with little wealth behind them and no savings. While they have seen the value of their own homes increase, they can’t afford to take out second mortgages to help their offspring - especially with interest rates expected to rise again.

Sam is a motor mechanic and Gemma an aged care nurse - they are not highly paid and don’t expect their incomes to rise quickly in the next few years. Buying a home is beyond their reach just yet, as they struggle to save a deposit to buy a freestanding house with a small backyard. They decide to delay the wedding and to put off their first baby. They hope that the threat of rising interest rates will keep house prices in check while they save. But they are worried because the latest CPI figures show the cost of house purchase is continuing to increase.

The Howard Government would have us believe that there is nothing it can do about the housing affordability crisis facing young Australians like Gemma and Sam. The comprehensive work presented at this week’s forum shows this attitude is not defensible, as does the experience of many countries around the world where affordable housing is seen as a right for all citizens.

Unfortunately, there still seems to be less creative thinking happening in Australia on how to support home ownership than is going into the question of how to provide of affordable rental. The forum participants recognised this and noted that one reason is the relatively poor information base available to policy-makers in relation to how the housing market actually works (and therefore how best to intervene).

But we do know there are options out there. In the United Kingdom, for example, a new scheme has recently been launched under which the government is supporting shared equity arrangements in partnership with institutional investors. Labor also believes that a better targeted first home owners’ grant would enable governments to provide greater support to those who need it most - low and middle income earners.

It is simply a question of deciding what kind of society we want to be. If we want Australia to be a place where young people have opportunities to strive for a better life, no matter what their background, there is no room for complacency among policy-makers on the issue of housing affordability. If we want our cities and towns to be vibrant places which encourage young Australians to stay and skilled migrants to come here, we need to ensure people can afford to live in them.

Labor is already committed to developing a national housing strategy and working with the states and local government under a National Affordable Housing Agreement to address the problems facing struggling home buyers and renters. We will look closely at the ideas coming out of this forum and will work with all stakeholders to find the right solutions for Australia. We encourage the Howard Government to remove its ideological blinkers and do the same.