State governments have a far better handle on housing affordability. The Victorian government’s solution of cutting stamp duty for first home owners is a safer option.”
When asked in what ways the Budget could address affordability, Brammall says the two factors that are key are interest rates and supply and demand, and the government can’t touch them. “There’s talk interest rates might continue to lower, which is good for business, great for borrowers and not so good for making houses any more affordable.”
He says a coalition government wouldn’t want to be seen “playing with the levers when it comes to property”. However, they do have at least one measure in place that addresses housing affordability – the National Rental Affordability Scheme (NRAS).
Hockey also introduced a new application fee for foreign buyers – $5000 for properties under $1 million and $10,000 for properties over $1 million. Both economists see this as a small step towards improving housing affordability but not drastic enough to put off foreign investors.
But both Brammall and Keane agree there’s one sure way to enhance affordability – remove negative gearing – however they both believe that it’s unlikely to happen with a coalition government.
