The housing supply and affordability crisis is upon us and debating how we arrived here won’t help.
One Nation’s housing policy ‘looks to the future,’ offering common-sense solutions to help more Australians purchase their own home, while at the same time, reducing rent.
Overview
- Lower immigration to sustainable levels to reduce housing demand.
- Ban foreign ownership of residential property to increase housing supply.
- Allow a portion of your superannuation to be invested in a home purchase.
- Ditch Labor’s Housing Future Fund and invest those funds into creating a new People’s Mortgage Scheme, offering 5% deposit and 5% interest rate.
- Allow people with a HECS debt to roll their debt into a People’s Mortgage account, improving their ability to obtain and service a housing loan.
- Implement a 5-year moratorium on charging GST for new home construction, which will make new homes more affordable.
The Role of Interest Rates in the Housing Crisis
The Reserve Bank understands that slowing down construction is an effective tool in reducing inflation and is doing so knowing it will make the housing crisis.
This is what I mean when I say the Government is “stepping on the accelerator with handouts and government-sponsored construction,” at the same time the Reserve Bank is tightening the reins with higher interest rates.
The result is a shambolic government from Anthony Albanese and Jim Chalmers.
A shortage of home construction firms is also contributing to the problem. As of May 2024, there have been 2,500 building company bankruptcies | May of 2024 financial year.
These failures are a result of rising material costs, approval delays, high interest rates affecting both the builder and the customer and a shortage of skilled labour. Our immigration policy has brought millions of people into the country, however only a fraction of those migrants are qualified in construction trades.
The Government’s answer involves a set of measures that “promise” many new homes, yet so far, only a few thousand have been delivered and they are mostly homes that were already in the pipeline.
In other words, the Albanese’ Government’s efforts have made no meaningful impact on the crisis.
One Nation’s approach will tackle inflation without relying on interest rate rises. Refer to our inflation policy.
The Role of Immigration in the Housing Crisis
One Nation’s policy to address the housing shortage involves reducing immigration until the housing market stabilises.
This strategy is grounded in logic that if we already have a limited supply of houses and we increase demand faster than new homes can be constructed, it will only lead to a worse housing shortage. Even those who support high immigration should recognise that this approach makes sense.
Anthony Albanese has overseen the arrival of 2.4 million new residents in just the last 2 years, creating a demand for 700,000 homes. With home approvals at just 160,000 per annum, our housing shortage continues to get worse. In turn, the worsening shortage will cause higher rents and higher home prices, putting home ownership or rentals out of reach for many everyday Australians.
Rent controls discourages construction, making the problem worse.
The graph below illustrates new housing approvals against population growth. Under Anthony Albanese’s Labor/Greens government, the number of home approvals has decreased while new arrivals have increased. This trend suggests that without the implementation of One Nation’s housing policy, the problem is going to get significantly worse for everyone currently living here.
The Role of Foreign Buyers in the Housing Crisis
During COVID, with immigration at such low levels, there was an opportunity for a “’catchup” – a period of construction without the pressure of increased demand.
Despite this opportunity, no significant catch-up occurred, yet new homes were built. So where did these homes end up?
Part of the answer can be found in the August 2021 Census, which revealed that one million of Australia’s 10.8 million homes were empty on Census night.
One Nation believes that part of the issues stems from foreign buyers purchasing new housing stock and locking it up, so that it can be sold as “brand new” when values rise. Much of the construction during this COVID period was removed from the market in this manner. The Greens also highlighted this issue: read here.
One Nation’s housing policy includes measures to end foreign ownership of residential and agricultural property, aiming to help Australians secure homes.
Another contributing factor are owners that decide tenants are too troublesome and choose to forgo rental income. This problem would likely be more common among foreign or corporate investors who view real estate as a speculative investment – focusing on fast capital appreciation rather than rental returns.
Why wouldn’t foreign investors pour capital into Australian real estate, given how fast property prices are increasing?
Rising Australian real estate prices were an irresistible target for international and local capital. Additionally, superannuation firms are increasingly investing in residential property, potentially adding to the demand and contributing to rising prices.
Is Short-stay Accommodation Contributing to the Housing Crisis?
The short-stay rental market, such as Airbnb, is often highlighted in discussions about housing. There are approximately 100,000 short-stay properties in Australia, which adds to the 280,000 rooms available in the conventional accommodation sector.
In comparison, Australia’s total housing stock comprises 10.8 million homes, meaning short-stay properties represent less than 1% of the overall market.
The short-stay rental market caters to people seeking holiday or business rentals and is an industry with a finite growth curve. Many short-stay rentals are not stand-alone units. Often, they are converted spaces like garages or spare rooms. These types of properties would not typically qualify as permanent rental accommodation under existing planning regulations.
Many of these properties have always been used for short-stay purposes. In the past, these properties would have been managed by local real estate agents and legacy websites like Stayz. Therefore, the actual number of rental properties removed from the market for short-stay use in the past 5 years, is much less than the 100,000 figure suggests.
While some on the left are fixated on short-stay rentals, it appears to be more an ideological abhorrence of Australians that use entrepreneurship to get ahead.
We Need a People’s Mortgage Scheme!
The Housing Future Fund (HFF) is an Albanese Government initiative to create a fund that invests in mortgages. Currently valued at $10 billion, it is expected to be increased to $20 billion. However, this scheme has not delivered a single new home and is limited to just a few thousand properties per year.
One Nation proposes to turn this scheme into a low-deposit, low-interest Government-backed mortgage scheme for Australians, especially those with a HECS debt. This proposal would help people secure homes years sooner.
One Nation will convert the HFF into a mortgage fund, offering government-backed loans to Australians who fail to meet traditional banking criteria. This is aimed primarily at the three million HECS debt holders in Australia. These individuals, HECS repayments can restrict their ability to buy a home, manage a mortgage or save for a deposit, as their HECS debt impacts their income.
We propose offering People’s Mortgages with fixed terms of up to 25 years at a 5% interest rate, with the option for early repayment, and requiring only a 5% deposit. This is in line with the Government’s own low-income deposit scheme.
Applicants will also have the option to use up to one-third of their superannuation for the deposit, with the condition that the funds must be repaid when the home is sold.
For Australians who have been employed for several years, have a reasonable income and superannuation balance, and qualifies for the first home buyers grant, it’s likely that no cash deposit will be required for an entry level property. Additionally, the mortgage repayments will be comparable to current rent payments.
People’s Mortgages for HECS Debt Holders
One Nation will offer HECS debt holders a simple and straightforward choice:
- Continue paying off your HECS debt while managing a mortgage as you do now; or
- Roll your HECS debt into your mortgage, extending the repayment period over a longer period. This option allows you to secure a mortgage sooner if your income and eligibility for a First Home-Owner’s grant, along with a superannuation top-up, support it. While this option increases the total cost of your HECS debt over time, it enables you to purchase a home much earlier.
Mortgages will only be issued if the applicant meets the lending criteria, including the ability to make the repayments through gainful employment or a self-owned business.
These mortgages will be administered through an Authorised Deposit-taking Institution (ADI) or approved intermediary, such as mortgage brokers.
Case study: Blake has the average HECS debt of $25,000 and is paying that off over the average duration of 9.5 years. The debt increases every year with indexation, Blake will most likely repay a total of $29885 at $300p/m before being eligible for a home loan. Under One Nation’s low deposit mortgage, Blake can roll the $25,000 debt into their mortgage and pay the debt off over 25 years at 5% interest for a total repayment of $43,800. This will add $146 per month to the mortgage, a much more manageable figure.
For more details on how One Nation plans to make HECS fairer, refer to our HECS Policy.
Suspend Charging of GST to Buyers
According to the Australian, government fees, charges and taxes account for 50% of the cost of a home in Sydney and 32% in Queensland. Housing has become a cash cow to maintain bureaucratic empires and social agendas, making it increasingly difficult for everyday Australians to afford to build their own home.
One Nation policy will strip away red, green and blue tape, allowing tradies to get on with the job.
I have requested the Parliamentary Budget Office cost our proposal to suspend collection of Goods and Services Tax (GST) on new home construction. The policy is straighforward – builders will be able to claim back the GST on all building materials they used in the construction of the homes, rather than passing the GST cost onto home buyers.
This measure will cost $1.4 billion over 5 years and will lead to a corresponding reduction in the purchase price of new homes.
Since GST revenue is collected on behalf of the states, the Federal Government will compensate the States for the reduced GST revenue. This practical measure provides direct assistance and rewards the completion of new, ready-to-sell homes.
Addressing Building Materials Shortages
Amid discussions about building houses, the Prime Minister is ignoring a critical issue: the availability of building materials.
At the same time the Prime Minister is trying to build homes, the Greens and the Prime Minister’s own Net-Zero cabal are obstructing essential industries. These groups are targeting forestry for timber, steel production for frames and supports, and cement manufacturing. Of note, a major ingredient in cement is fly ash, a byproduct from burning of coal for power. Therefore, eliminating coal power will also decimate Australia’s cement industry.
One Nation’s Strategy to Tackle the Building Materials Shortage
- Approve the harvesting of plantation timber for the domestic construction industry, with conditions for adequate replanting and regeneration.
- Building new, clean steel plants at Abbot Point and Port Hedland to capitalise on Australia’s competitive advantage in steel production. This will lower costs, improve the quality and increase the availability of steel for the construction industry.
- Utilise steel mills to provide fly ash for cement production and provide heat for production of ceramic tiles and other building materials.
- Promote the development of an Australian hemp industry to produce hemp-based particle board, building bricks and insulation.
