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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2019-03-20 Daily Xml
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Housing Affordability

The Hon. T.T. NGO (15:27): I rise to speak on an important matter impacting our community: rental stress. SGS Economics and Planning's most recently published findings on the Australian rental market was reported in the November 2018 housing affordability index. Their discoveries about South Australia are alarming and concerning for all honourable members in this place.

Over the reporting period it was found that Adelaide had the greatest decline in affordability of states considered. Our rental affordability was described as comparable to Greater Sydney. I understand this index found Adelaide the third most unaffordable city after Hobart and Sydney, with our renters spending on average just over a quarter of their household income on rent.

Regional South Australia was found to have experienced the greatest decline in affordability, compared with all the 'rest of state' areas studied. According to the report, regional SA is at its least affordable since early 2016, with average households spending 23 per cent of income on rent. As representatives of South Australians, these statistics should greatly concern all honourable members in this and the other place, but this problem is not exclusively ours. Nationwide, I understand that households renting grew from 25 per cent to 30 per cent between 1995 and 2015. Renters spend 4 per cent more income on household expenses than do mortgaged owners.

Alarmingly, the Australian Housing and Urban Research Institute estimates that 1.3 million households need housing assistance. The index key findings identify various factors causing the shift towards renting and its increased costs. Negative gearing and the reduction in capital gains tax have attracted investors, reducing owner-occupiers. Other factors include low interest rates and widening income inequality.

Another contributor to our nation's rising housing unaffordability is the decline in affordable housing over the last decade. This pushes low-income renters into the private market, driving up prices. The movement of low-income renters from public housing into private explains why 44 per cent of all low-income households are in housing stress, compared with 35 per cent in 2008.

Even more concerning is the mention in the index findings that, for investors, vacant properties are still valuable for their long-term financial gains. As I understand it, owner-investors will make money in the long run, regardless of whether their property is currently serving the rental market.

For these reasons, I commend the Labor Party federally for announcing their $6.6 billion plan to pay $8,500 to landlords who build new homes to rent to low and middle-income Australians at 20 per cent below the market price. This policy is a step in the right direction to ease the pressure on South Australian households and our most vulnerable citizens. I also congratulate federal Labor national conference delegates for agreeing to establish a bond aggregator so community housing providers can get cheaper long-term finance for new affordable and social rental housing.

Labor also pledged to work cooperatively with state and territory governments and appoint a housing minister and to re-establish the national housing supply council to ensure better assessment of general housing affordability issues, including supply. Labor will also work with state and territory governments to improve and increase the stock of public housing, while also looking to expand Indigenous housing. I am pleased that the federal Labor Party is tackling this issue seriously, and I welcome their policy announcements.

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