The housing market needs a long-term plan and a review of negative gearing

Home ownership is falling. It is harder than ever for younger or poorer Australians to become homeowners.

More than 60 per cent of renters on low or moderate incomes pay unaffordable rents (more than 30 per cent of their income). There is dwindling supply of low-cost housing.

Negative gearing has forced us into a highly variable and unresponsive housing market. In other countries there is a stronger positive relationship between capital value and rental returns than in Australia.

In Australian capitals and main regional cities it is not possible to get a positive return on investment without negative gearing at the highest marginal tax rate - even with strong capital growth. That means that companies paying 30 per cent tax cannot possibly make residential housing work as an investment.

We need to construct a different, less volatile housing market and one that does not result in prices beyond the reach of most Australians.

Key workers - nurses, train drivers and service industry workers - are already saying that it is too expensive to live in Sydney. Our largest city will not be viable if we cannot house key workers. That's a reality that has to be faced and which government cannot afford to ignore.

The Australian Democrats would like to see a housing market that tames the beast while still providing investment opportunities for Australian investors, one that maintains affordability across the board, and a supply of new housing that is sufficient to meet demand.

A mix of investment subsidies that are targeted specifically to affordable rental including additional investment in new types of public and community rental housing could address the significant failings in our private rental markets.

A national housing plan that sets realistic social and economic goals within a long time frame is required and a review of negative gearing should rightly and properly be a part of that. The question is - are the government or the opposition ever going to be brave enough to take on the challenge?