Housing in Australia continues to dominate the headlines nationally, and for good reason. With successive interest rate hikes, concerning increases to weekly rents and rental applications per property at record highs, it’s arguably never been harder to keep a roof overhead in this country. The housing market crush has been a slow moving trainwreck, with failures to effectively address supply spanning decades and crossing all levels of government. Unfortunately, its impacts disproportionately effect our young people dreaming of their first home, and our low to middle income earners who don’t own their home outright. In my electorate of Cowper on the Mid North Coast of NSW, property prices have skyrocketed, with houses close to doubling in value in some areas over just three financial years. This is well above the state average, while the median household income has remained considerably below the average. It’s no secret that my constituents are being hit particularly hard.
With the Net Overseas Migration tipped at 400,000 last financial year and a projected 315,000 this financial year, the demand for housing right across the country is set to escalate even further as planned additional supply figures lag well behind that of demand.
Concerningly, it appears that our current Federal laws around foreign investment in residential property are compounding the issue of affordability even further. While there are a number of restrictions currently in place, Australia has yet to follow the lead of our Canadian and Kiwi counterparts, banning foreign home ownership altogether. I can’t pretend that Prime Minister Trudeau and I align on social and fiscal policy too often, but on this I agree; The issue of underused and vacant housing as a result of foreign investment is one that needs to be immediately addressed; and homes should ultimately be owned by residents, not foreigners looking to profit from our collective lack of adequate planning.
While some may argue the limited impact of such a strategy, I believe we need to be pulling on any available levers to put downward pressure on demand. Currently, up to 4% of all Australian residential property is foreign owned. While this might sound small, if 4% of the property market were to be released for sale over a limited window of time and offered exclusively to residents, the positive impact on supply and simultaneous reduction in demand by removing foreign buyers from the market would be significant.
If we add this incrementally to other strategies, such as government initiated build-to-rent projects, the reduction of green and red tape around new housing developments, more effective and measurable cross-government funding streams and significantly stronger investment into the regions by increasing the infrastructural capacity of our emerging regional cities, we as a Government could at least say we were doing everything at our disposal to assist future generations into homes.
Homes take time to build. The infrastructure required to support those homes takes even longer. Those are two facts that we cannot avoid, but while we wait for these projects to commence, we must look at all available policies the keep our current supply effectively tenanted and in the hands of local families. Removing foreign ownership is a lever that I believe we need to seriously consider pulling immediately, and I will be pushing for this to happen as soon as Parliament resumes next month.
