Affordability and the current inadequate Government response.
One of the greatest fallacies perpetrated throughout the housing affordability debate is that the release of land, house/land packages and units should be aimed at first home buyers. The release of land/houses/units is about balancing the supply demand imbalance holistically for everyone. If we have balance between supply and demand then prices will stabilise and affordability will be a cyclical issue and not structural.
The Federal Government must force the release of more land and developments as the State and Local governments are too inefficient, caught up in their own bureaucracy as well as their own local politics to do this.
In developing product that is artificially presented for first home buyers you are simply handing them a windfall profit on sale as you will not be able to force them to sell in the future under market value. This would be very unfair for the rest of the community including low income earners.
The development of inventory should be accelerated and forced as a medium term strategy which will see some benefit in two to three years.
A short term strategy is then needed to assist first home buyers not just to enter the market through a specifically prepared package but through the purchase of any house they can afford. This is where Government assistance is needed. The down side is that any increase in demand while there is a shortage of supply will itself result in increased prices.
