The Great Australian Dream to own your own home has been a quintessential part of our identity since the term was first coined over half a century ago. While the make-up of this dream may have changed over the decades, it has become increasingly difficult for so many.
The Turnbull Government is focused on creating an environment that supports jobs growth, drives investment and, in turn, makes home ownership a reality for all Australians. This is one of the reasons I have been tasked with overseeing the Government's housing affordability agenda in my capacity as Assistant Minister to the Treasurer.
Home ownership rates are continuing to fall across the board, particularly among young Australians. For example, between 2002 and 2014, home ownership rates dropped from 38.7 percent to just under 30 percent, shutting more than 160,000 young Australians out of the housing market.
While the Government is examining all of the causes of Australia's housing affordability problems, it's widely accepted by all levels of government that the lack of housing supply has been a primary driver of these issues. So, addressing the endemic supply side issues that are inhibiting people from entering the market must be the key policy objective.
Home ownership rates are continuing to fall across the board, particularly among young Australians.
This is not an issue which has silently or swiftly crept up on us. It has been a worsening problem for at least three decades, with state and territory governments struggling to ensure the supply of new homes has kept up with demand and population increases, particularly in our major metropolitan hubs.
The solutions to these challenges are not universal, and there is no silver bullet to address them. While some policies affecting housing affordability are the responsibility of the federal government, the majority of policies are the remit of state and local government.
A large proportion of the cost of building a new dwelling comes from state imposed taxes, planning constraints and regulatory burdens, negatively impacting new supply. Efforts to improve housing supply were flagged when COAG met late last year, and it is imperative that state and territory governments work with the Commonwealth to provide tangible solutions to these challenges and drive future growth.
Research by the Centre for Independent Studies estimates that in Sydney, nearly half of the price of a new home is attributable to taxes and levies as well as compliance costs. In all other Australian metropolitan areas and some regional cities the comparable proportion is over 30 percent.
Lags in land releases for residential developments and planning and zoning restrictions are also detrimental to supply.
There is ample room here for reductions in costs that will result in more supply, provided state and local governments come to the table. In this respect we have already heard encouraging words from New South Wales Premier, Gladys Berejiklian, and welcome the Andrews' Government announcement on stamp duty over the weekend.
Lags in land releases for residential developments and planning and zoning restrictions are also detrimental to supply. While the Victorian Government's announcement last week to build 17 new suburbs on the city's fringe is a welcome step, infrastructure has to be put in place to make these suburbs accessible and liveable. Through initiatives like the Smart Cities Plan, the Turnbull Government is already working towards making this more achievable.
It would be remiss to ignore issues facing first-home buyers when exploring this issue. An estimated 30 percent of Australians are renters, many of whom are trying to get their foot in the door of the property market. Labor's reckless plan to limit negative gearing -- and, in effect, to implement a housing tax -- promises to hike up rents and does nothing to increase supply, making the idea of home ownership more out of reach to many first home buyers.
It is clear that repressive policies to limit negative gearing will do little more than undermine activity and investment, while simultaneously making life harder for first-home buyers.
In contrast, The Turnbull Government has made success in the area of housing affordability a priority. We will continue to work with our state and local government counterparts to develop a comprehensive plan to alleviate the many challenges in this area and make home ownership a reality for Australians.
Over the next few weeks The Huffington Post Australia will run a series of daily blogs on housing affordability called The Great Australian Nightmare.
Everyone from senior government ministers to first-home buyers will have their say on what we at HuffPost Australia consider one of the biggest issues facing Australia.
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