15 April, 2016
Research by lender ME shows strong support for action on housing affordability, including among property investors.
The survey of 1,500 households was conducted by DBM Consultants in December 2015 and results were compared with an earlier survey in June 2015.
Of households canvassed in the December survey, 76% agreed (9% disagreed; 16% neutral) the federal government should be taking action to make housing more affordable for first home buyers, an increase of 3 points from the June 2015 survey.
Support for action was broadly based across all states and generations as well as by those looking to buy property in the next 12 months (81%) and property investors (70%).
In terms of actions to fix affordability, 76% agreed (9% disagreed; 15% neutral) the federal government should do more to encourage the development of lower priced housing, up 2 points from June 2015.
Also, 61% agreed (20% disagreed; 19% neutral) the federal government should reform the tax system to provide less support to investment property buyers, up 6 points from June 2015, including 42% of property investors.
More households on lower incomes than on higher incomes supported winding back tax concessions for property investors: 63% of those earning $40,001-$75,000 supported the idea, compared to 59% of those earning $75,001-$100,000 and 59% of those earning over $100,000.
ME CEO, Jamie McPhee, said he wasn’t surprised by the findings as most Australians view housing as a long-term source of wealth, which is becoming increasingly unavailable to younger generations.
“We see the impact a lack of access is having on younger generations’ sense of financial wellbeing, which is falling behind the financial wellbeing of older Australians.
ME’s December 2015 Household Financial Comfort Report clearly shows rising house prices are contributing to a widening in the gap in financial comfort between younger and older households, a trend that’s continued to develop over the four years we’ve run the survey (see Figure 1 below).
“Property is an important wealth generator and the inequities in accessing housing should be tackled.
“Australia’s current tax arrangements are contributing to the problem by advantaging investors over first home buyers and they should be addressed within a broader review of our taxation system.”
"That 70% of property investors agree something should to be done and 42% agree tax concessions for property investors should be changed, shows reforms would receive wide support.
Figure 1 - the widening gap in overall financial comfort between older and younger generations over ME's nine household financial comfort surveys