House debates

Thursday, 15 February 2024


Help to Buy Bill 2023, Help to Buy (Consequential Provisions) Bill 2023; Second Reading

11:34 am

Photo of Daniel MulinoDaniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

I think that, if we were to do a word search on the previous speech, probably the most common phrase would be 'I reiterate'. It really was a brief scare campaign on autoloop and didn't go to the heart of this issue and the complexity of the homeownership challenge that this nation faces.

I want to spend a couple of minutes touching on homeownership, because that is of course one of the great macroeconomic challenges that this nation faces and that has been evolving over decades. It's not just a macroeconomic changes, though; it's a social challenge. It affects the electorates of every member of this place, including my own, including the previous speaker's and including the electorate of every other speaker who will contribute to the discussion on this bill.

But in addition to being a great macroeconomic and all-of-society challenge it is also the most personal of issues, because our home is the place where we live with our partner, where we live our own life, where we raise a family. It's a place where we want, under that roof, to have great security and certainty. So homeownership is, at the same time, an incredibly personal issue for so many people in all our electorates. And it's at the same time an incredibly multidimensional macroeconomic and social challenge.

I'll just touch on a couple of dimensions of the macroeconomic side of it. One is that homeownership has been trending down over the past couple of decades. One can look at homeownership tracking down from 70 per cent to 67 per cent, roughly, between the 2006 census and the 2021 census. What's even more startling than that aggregate decline is what we see when we look at generational cohorts. ABS data that was released in 2022 shows that 55 per cent of millennials—25- to 39-year-olds—had achieved homeownership, 62 per cent of gen-Xers and 66 per cent of baby boomers, at the same age. So, that wasn't at a given point in time; it was the same age. We're seeing in the ABS data that homeownership rates are falling markedly across generations over time. That is one of the things I wanted to point out, because that is something this bill directly addresses.

The second point I want to make is that in addition to that falling rate of homeownership across generations we have some structural changes that are occurring over decades—30 or 40 years or more—in our housing market. One of those is the rising ratio of house prices to disposable income. Over the past 30 years or so we've seen that ratio rise from around 2.5 to 5.5. Of course, there all sorts of reasons for that. Changes in our financial markets have meant increasing access to granular information and increasing willingness on the part of financial institutions to lend at higher ratios. And lower structural global interest rates over decades have meant that banks are willing to lend at higher household-to-income ratios. But of course that means households are having to come up with much higher deposits as a rate of their income. So, that's a second dimension of the longer-term change in this housing market that I think is important to note. Thirdly, I think it is important to note that Australia has some of the highest absolute values of housing prices as well as the highest ratios of house price to disposable income in the world.

Those are a few characteristics of the long-term nature of this challenge that I think are important to put out there right from the start, because they go to the specific nature of this program and how it fits in with the government's overall approach to housing affordability.

Another thing I want to talk about is that this is, from an economic perspective, a challenge with both a supply side and a demand side. On the supply side there are a number of aspects to the housing affordability issue. One is issues relating to land release. Another relates to materials availability, which of course became an issue after COVID when supply chains had issues. Another relates to skills, and the government is dealing with that obviously through a whole range of measures, including fee-free TAFE. And another relates to funding and finance mechanisms, which tend to be very specific to particular areas of the housing market—for example, rent to buy or build to rent to buy. Those kinds of schemes have particular funding and financing needs, and those are things the government is looking at.

There's also a whole series of demand-side issues. One of those is that demand tends to be very uneven geographically. For example, demand might surge in particular areas where there are changes in employment opportunities or demand might decline in some areas where there's a decline in employment opportunities. Demand might surge in particular areas where migration demand increases. Sydney and Melbourne, for example, go through periods where that has an impact on their housing markets. There might just be lifestyle changes—for example, a sea change or a tree change. All of these things feed in on the demand side, but they're uneven, and that's something which the housing industry, but also policy settings, need to reflect.

Then there's security of work, and this is something this place has dealt with through a tranche of bills. This is a serious issue because insecure work is not just an issue for how people feel at their work and all of the consequences that can flow from not knowing whether you have secure hours from week to week or that your tenure at work is secure. The more people that have insecure work, the fewer people are going to be able to negotiate mortgages—long-term borrowing arrangements. That's something this House has dealt with through a range of IR bills, every single one of which those opposite have opposed.

Finally, on the demand side, is the deposit. The deposit becomes a huge barrier for some cohorts in particular, but it becomes a particular challenge for younger cohorts because they need time to save. The challenge with the deposit is that, if you're in a race to save the deposit against house prices that are increasing, it becomes a particular challenge. In some housing markets it can take up to a decade or more for the median household to save a deposit. This has become a particular issue. That dovetails with the issue that I talked about before of the ABS data showing that, from generation to generation, homeownership is declining for people of the same age.

This is a serious, complicated and multidimensional issue. Some aspects of this that are particularly noteworthy are that it's impacting younger cohorts and that on the demand side the deposit has become a particular barrier in some housing markets. Those factors warrant a particular response.

If you look at the government's overarching approach to housing affordability, we've put in place many programs which reflect that this is a multidimensional issue. The National Housing Accord sits over many of them. The National Housing Accord brings together the Commonwealth government, state and territory government and local government but also the building industry and the superannuation industry. It's a sensible and appropriate and much-needed way of bringing together all the strands of this policy and making sure that we are moving forward on all of those supply-side and demand-side challenges simultaneously.

There's also a series of very important programs: the $10 billion Housing Australia Future Fund, the $3 billion new homes bonus, the $2 billion social housing accelerator—and I could go on. There are all these different important programs which are dealing with different segments of the market. Rental assistance has also been a very significant priority. This is an important part of the housing market because there are many people renting and they have needed additional assistance throughout the broader cost-of-living challenge that the community has faced.

What we see with this bill is that we are putting another important component in place of our overarching response to the housing affordability challenge. As I said earlier, this is an important piece because it deals with that cohort of people who are finding it a struggle to pull together the deposit, and that is a material issue for many households. So this is an important additional component to what's already a very comprehensive set of packages that this government has put in place—many of which have come through this place and, as I alluded to, many of which have been opposed by those opposite.

This is an important scheme that will support up to 40,000 Australian households to purchase a home of their own. The Commonwealth will provide an equity contribution to eligible participants for up to 40 per cent of the purchase price for new homes and up to 30 per cent for existing homes. Skewing it towards 40 per cent for new homes, again, provides an incentive for additional supply. Four times 10,000 new participants is a material contribution for a particular cohort that's in need. Those participating in this scheme will need as little as a two per cent deposit. This goes to the point that I was talking about before. This is a multidimensional challenge with supply and demand, but one of the key intergenerational challenges that we're facing is that there are many young households who have the capacity to service loans but are struggling in the race against increasing house prices to save the deposit. So as little as a two per cent deposit will enable households to participate.

The package has very sensible income limits. This is being targeted to those that need it the most. The limits are $90,000 for singles and $120,000 for couples. And there are price caps for each city and region, which, again, are tailored so that those people who need it most will get assistance, and they'll get assistance at the right level.

Public policy experts are lauding this scheme. The Grattan Institute has been very supportive of this shared equity scheme and said that it will level the playing field for homebuyers, particularly by giving those who are struggling to save a deposit that extra leg-up that they need. The Australian Housing and Urban Research Institute has said that a shared equity scheme can transform people's lives. Public policy expert after public policy expert will say that this is an important component of the overarching response. This is not the only thing that we should be doing, and this government has been bringing to this place measure after measure throughout the last 18 months, but this is an important component that will help a cohort that is struggling.

Looking at my own electorate and looking at this in a very tangible and concrete way, my electorate is younger than the average, with a median age of 36, compared to the median age across Australia of 38. I talk to young people constantly. Many parts of my electorate are low socioeconomic or low or medium income, and they would be precisely the kinds of households that this bill is addressed at—households that are struggling to save a deposit. And, as I alluded to earlier, my electorate has a lower-than-average median family income. It's just under $1,900, compared to over $2,100 for Victoria and Australia. So it has precisely the cohorts that this measure is aimed at. Then again, if you look at median house prices across a number of the suburbs in Fraser, right around my electorate office, in St Albans it is $640,000, in Sunshine West it is $683,000, in Sunshine it is $802,000, and in Braybrook it is $730,000. So, for the median house in all of these suburbs around my electorate office where young families are looking to buy, they'll get a huge assistance in pulling together that deposit through this scheme.

The opposition has made some frankly highly irresponsible claims in that most recent contribution. The kinds of things that were alluded to will simply not be a part of this scheme. Of course there's some flexibility in the scheme for the ways in which people might pay off their loan over the course of their life. That's entirely appropriate. But people will be secure in their homes, and, importantly, people will be given the assistance to buy a home in situations where it would have been a real struggle if they were left to just having to save. We all know the difficulty. We all know people in our lives, young people in particular, who are struggling to pull together that deposit—people who could service a loan but can't get on the first rung of the homeownership ladder. This is an important component of the government's overarching response. It will help 40,000 households—40,000 families—and I very strongly commend it to the House.


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