Lack of supply is doing the damage in home market
Big banks agree governments across all levels need to work together for greater investment to build more houses.
LACK of adequate housing supply is the key driver of the national affordability crisis for first-home buyers, according to Australia’s largest banks.
A Senate committee examining intergenerational housing inequity has heard the nation’s big four banks are unanimous in pushing for a boost to housing supply.
Representatives of the lenders appeared during the inquiry’s final day on Thursday.
NAB chief economist Sally Auld told the inquiry the decline in house prices recorded in the first few months following the Federal Budget, when the government stripped some tax advantages for property investors, aren’t enough to overcome affordability issues.
National home values are 3.6 per cent below the market peak posted in March, according to figures from Cotality.
The latest forecasts from the Commonwealth Bank suggest property prices could fall by as much as 13 per cent in Sydney.
“This is a challenge that is likely to take the better part of a generation to resolve,” Auld said.
“There is no single policy lever that can solve this issue on its own. Governments of all levels need to work together with the support of business and industry.”
CBA head economist Belinda Allen echoed comments from treasurer Jim Chalmers on Wednesday that a number of factors are at play in the recent price dip.
“Interest rate hikes, the Middle East conflict and, of course, the tax policy changes in May have all contributed to what we are seeing across the board,” she told the inquiry.
Greens senator and inquiry chair Barbara Pocock said decreasing property prices have barely made a dent.
“Prices have increased by 400 per cent since 1999,” she said.
“A four per cent fall in house prices is very little comfort to a first-home buyer.”
Scrapping tax incentives for investors has been significant but Senator Pocock said she wants the government to commit to addressing public-housing shortfalls.
“The solutions have been repetitive and clear. Invest in public housing. We’ve dropped the ball 30 years ago,” she said.
Senator Pocock has called for the banks to provide a “no frills mortgage” for first-home buyers and greater transparency around the income the big four receive for each mortgage issued.
The inquiry’s final report is due to be handed down by the end of September.
