New South Wales may have a new premier in Chris Minns, but the state is still afflicted by the same widespread housing crisis, with leading property bodies calling for change.
The Real Estate Institute of NSW said home-ownership in the state has been in long-term decline and this has led to increases in the cost of housing and the cost of living, which are the top two issues NSW adults are concerned about according to Forseechange.
The proportion of household renting from private landlords has risen from 19.7 per cent in the mid 1990s to 28.8 per cent in 2017-2018, while the number of tenants in state housing has dropped from 5.4 per cent to 3.7 per cent, according to a REINSW report into home ownership.
REINSW Chief Executive Officer Tim McKibbin said there had also been a significant drop in the number of people who own without a mortgage, down from 43.9 per cent to 29.7 per cent, but a jump in the proportion who own with a mortgage from 26.5 per cent to 34.8 per cent.
“The average age of first-home buyers has increased markedly over the past 30 years and has accelerated in the last 10 years – the average age of first-home buyers is now 36,” he said.
“Dealing with the symptoms of the problem will not solve the problem itself -insufficient housing, and particularly, affordable housing.
“NSW simply needs more property and that means investing in building more property.
“Until government directs its attention exclusively to supply, the housing market will remain in crisis.”
Mr McKibbin said more homes had to be built and that approvals process had to be streamlined, with local governments held to account.
“A 10 per cent increase in supply improves affordability by 25 per cent,” he said.
Anti-landlord policies were also pushing landlords to sell their rental properties and this was reducing supply and driving rents up.
Mr McKibbin said property taxation was also in need of urgent reform.
“The NSW Government currently collects around $15 billion in stamp duty revenue each year, yet many NSW citizens are unable to afford a home,” he said.
“We know that reducing the rate of stamp duty drives increased transactions.
“Treasury should be instructed to model the optimal outcome for all stakeholders.
“A reduction in the rate of stamp duty will generate increased market activity.
“The reduced stamp duty revenue per transaction will be offset by an increase in the number of sales and higher GST revenue.”
Mr McKibbin said the taxes and charges applied by the three levels of government inflated the price of new homes by 40 per cent.
He said there was also a case for reducing stamp duty for some classes of people moving house, such as empty nesters, which would increase the number of homes suitable for first-home buyers.
What the Minns Government has promised
Housing policy was a core component of the Labor Party’s election campaign, with stamp duty reform among the top promises.
The new Premier, Chris Minns, has vowed to scrap stamp duty altogether for first-home buyers on properties worth up to $800,000, with concessions on homes worth up to $1 million.
The Perrottet Government’s land tax option would be scrapped.
“The dream of home ownership has slipped out of reach for far too many people,” Mr Minns said in his Fresh Ideas for Housing in NSW policy document.
“NSW Labor has a comprehensive plan for fair and affordable housing in NSW.
“It will begin with abolishing the Liberals and Nationals’ forever land tax on the family home.
“We will remove or reduce stamp duty for 95 percent of first home buyers over the next three
years.
“We will boost housing supply. And we will make renting fairer.
“We aren’t promising the world. We are promising what we know we can deliver. And if we don’t deliver, by all means hold us to account.”
Other proposed policies include a mandatory requirement for 30 per cent of homes built on surplus government land to be set aside for social, affordable and universal housing, including increasing the supply of affordable housing for renters, in locations well serviced by public transport.
Labor has also proposed a $30 million pilot build-to-rent program on the South Coast and will create a new agency – Homes NSW – to drive the delivery of more housing options and manage social housing in order to tackle the state’s housing crisis.
The Land and Housing Corporation, Aboriginal Housing and DCJ Housing will be merged into one social and affordable housing agency to streamline bureaucratic processes.
They’ve also promised longer-term funding for homelessness, housing support and tenancy advocacy services and that developments on dangerous Sydney floodplains would be stopped.
What about the rental market?
The Minns Government has pledged to ban secret rent bidding, which encourages renters to outbid each other to secure a home, driving up the costs of rent.
“Labor will legislate to make sure this stops,” Mr Minns said.
“Labor’s plan will mean that rental transactions will be open and transparent. If renters want to offer more than the listed price, this will have to be disclosed to all applicants who then have the chance to match the offer.”
They have also promised to establish a Rental Commissioner to advocate for tenants and identify barriers to increasing rental supply, implement a portable bond scheme and end ‘no-grounds’ evictions and instead work with stakeholders, advocacy groups and industry to develop a list of reasonable grounds for an owner to end a tenancy.
One of the Rental Commissioner’s jobs would be to devise a list of reasons the landlord can refuse a tenant’s request for a pet, which would be made via a simple pest request form.
“This doesn’t guarantee renters will be able to have a pet, but it will make it easier to apply to have one,” Mr Minns said.
The Property Council of Australia
The Property Council of Australia has also called on the incoming government to fix “one of the most combative and complex planning systems in the country”.
“We need a planning system that enables housing delivery, provides certainty, clear governance and speedy development outcomes – a planning system that does not result in complex over-assessment at different stages of the approval process,” Property Council NSW Acting Executive Director Adina Cirson said.
Ms Cirson said the incoming government must secure a proper housing strategy that addresses the housing affordability and rental crisis.
“Showing leadership to cut through the complexities of the planning system must be the number one priority for the next Premier if we are to meet the needs of a growing population in the grips of a housing crisis,” she said.
“Infrastructure contributions reform remains in the ‘never never’ but it can’t be forgotten.
“If we want to deliver stable housing supply, generate over $12 billion in savings for the state, and ensure the right infrastructure is provided at the right time and at the right location, we need to make infrastructure contributions reform a top priority for the next Parliament.
“Let’s also not forget about the challenge with providing adequate land for jobs to occur, especially with the industrial vacancy rates at 0.2 per cent. We cannot just have another crisis with no immediate solution.
“Investment in key infrastructure is critical to further develop the investment pathways and to offset potential job losses arising from a potential economic downturn in mid-late 2023.
“We call on the next NSW Government to show the intestinal fortitude to confront the big challenges facing the NSW planning system and work to improve the economic and social well-being of existing and future residents in Sydney and broader NSW.”
