Moves by some states and the federal government to offer buyers cash incentives towards their first home may actually be throwing fuel on the housing affordability fire. Public policy think tank, The Grattan Institute, has concluded that policies to help first-home buyers and improve housing affordability may actually be making the housing affordability crisis worse. The authors of ‘Housing Affordability: re-imagining the Australian dream’ also noted that politicians were failing to properly explain the situation to voters.
The report stated that proposals aimed at putting more money in the pockets of first-home buyers “will all cost the budget money, and will make housing affordability worse by boosting dwelling prices even further,” according to chief executive John Daley and fellow Brendan Coates.
Initiatives that would have the most positive impact on easing housing affordability in Australia’s major cities — such as changes to planning laws aimed at increasing urban density — have been thrown in the too-hard basket.
The report also found that relatively easy to achieve action on housing affordability doesn’t result in much actual change, whereas the greater the political difficulty, the more positive the resulting change would be.
