‘Whether house prices have been inflated by limited supply, or because of transfers to investors and homeowners, government policy is now trapped in a vicious cycle. The wealth accumulated in our houses has become a central part of the retirement system, and the government itself can’t afford for prices to fall.
‘Generous tax subsidies and asset test concessions on the family home have incentivised the accumulation of wealth in property and fuelled demand pressures in the housing market for decades.
‘Government assistance to home buyers and owners is provided in the form of the First Home Owners Grants, stamp duty concessions, and the family home’s exemption from capital gains tax, land tax, as well as the pension and other assets tests. These subsidies and concessions combine to make wealth accumulation in the family home more attractive than other assets.
‘… In the short-term a significant group of millennials will miss out on the benefits of home ownership. But in the long term, unless governments address some fundamental structural problems currently entrenched within our tax-transfer system, there is a significant weakness in our social welfare system built on housing.’
Affordable home-ownership scheme offers a pathway out of social housing
Katrina Raynor writes in The Conversation (3.10.18) that ‘shared equity’ models have a dual benefit of making home ownership affordable for people on modest incomes and freeing up scarce social housing for other households in need.
‘Social housing is in crisis in Australia, with almost 200,000 people on waiting lists. Social housing made up 8% of all housing stock in Australia in 1966. This had fallen to just 4.3% at July 2016.
‘As a result, governments have tightened eligibility. Social housing is increasingly home to only the most vulnerable households. And even these households often spend years on the waiting list while experiencing severe housing stress or homelessness.
‘Outside of social housing, rental and ownership options are increasingly unaffordable, particularly in the capital cities. Social housing was once a stepping stone to home ownership, but this is becoming more difficult.’