Building more overpriced private housing in Sydney’s dysfunctional housing market will not make housing more affordable
With a State government addicted to stamp duty and developers keen to maximize profits, no one should accept their arguments that just increasing the supply of overpriced private housing will make housing affordable.
The fact is Sydney’s housing market is dysfunctional because of federal tax concessions and a lack of community housing supply. Until this is addressed prices will remain sky high.
Greens MP and Planning Spokesperson David Shoebridge said:
“Until we end negative gearing, stop self-managed super funds from investing in established housing and fix capital gains tax concessions Sydney’s housing will remain ridiculously unaffordable.
“Sydney’s property market is huge, with more than 1.6 million housing units worth trillion of dollars. House prices in this market are primarily driven by investor demand from a raft of dysfunctional commonwealth tax concessions, not the relatively tiny number of new housing units constructed each year.
“When a Premier who is making billions on stamp duty and developers making more on over-priced housing tell you they want to address affordability then only the most naïve would listen uncritically.
“Between 2012 and 2014 NSW housing starts increased from 33,740 to more than 48,500 at the same time as prices skyrocketed.
“The entire new housing target for Sydney is 32,000 new housing units per year, a target which appears to have been effectively met in 2014. Yet prices kept going up.
“There is a reason for this, an additional 5, 10 or 15,000 housing units are sold in a huge Sydney residential market worth trillions of dollars. The increased housing represents a tiny fraction, less than 1%, of the overall market and therefore has very little impact on the price.
“We need to remove the tax concessions for cashed up investors to fix the affordability problem. However no state government addicted to stamp duty, and no property developer keen to maximize profit, will admit to this.
“In the absence of federal tax reforms the NSW government needs to focus on building new public and community housing that is delivered outside of the dysfunctional Sydney housing market.
“This is a far harder job than just selling the developers’ line that removing planning powers from communities and building a few more units will do the job,” Mr Shoebridge said.
