Parliament Updates

Zali Steggall MP speaks on the Help to Buy Bill 2024

27 February 2024 


Australia is in the midst of a housing crisis. It's being felt in every corner of the country, especially in Warringah, where house prices now average $2.3 million. Median rents in Warringah are $625, well above the New South Wales average of $420.

For some, this crisis is nearing catastrophe. Just last week, a homeless-outreach worker from LocalKind, formerly Community Northern Beaches, and the Manly Observer reached out on social media seeking to stop a pregnant woman and her partner from imminent homelessness, as they had to leave their rental accommodation. The outreach worker, Jessica Meadows, told the Manly Observer:

The couple are expecting a baby in June but are about to become homeless … With the lack of affordable housing and long queues at viewings they have not yet secured a new tenancy … The partner is still working full time and can contribute $500 a week while they continue to apply for long term rentals throughout the duration of their stay.

Luckily, the outreach meant the couple were able to secure four weeks of accommodation at Mission Australia and a potential granny flat for six months following that. That will mean the couple will be able to bring their soon-to-be newborn somewhere safe and secure. But it's hardly a solution. It highlights just how much change is needed across this area. What it shows is that this housing crisis is, in fact, verging on catastrophe for many Australians.

We need to do more on housing and address supply by both building and ensuring greater availability of rental properties. In an earlier debate in this place when we discussed the HAFF, it was interesting that there was very little discussion around the kinds of standards in relation to the housing that would be funded—whether there would be a prioritisation around efficiency and climate adapted and resilient buildings, or whether there would be a focus on building that is effective and efficient to ensure it can be done more rapidly. The lack of housing supply is a wicked, complex problem that will require all levels of government—federal, state and local—to work together. It will take a huge shift in policy. It will need an end to politicising for political gain rather than looking at the long-term view and benefit for society.

The current state of play is that house prices in Sydney have risen more than 11 per cent in the last 12 months. Greater Sydney's median dwelling price has climbed to $1.12 million over the past year, with more than 90 per cent of suburbs increasing in value. In Warringah, the average house price of around $2.3 million is an increase of around eight per cent over the previous 12 months and an increase of around 37 per cent over the previous five years—a 37 per cent increase! The percentage of Australians renting, some 31 per cent, is near its highest point within the last three decades. In Warringah, it's nearly 35 per cent of residents. Interest rates are also putting huge stress on those with high mortgages. Those facing stress include many Warringah residents who may be fortunate enough to be earning high salaries but are also paying exorbitantly high prices.

The evidence over several years from local organisations such as One Meal and LocalKind Northern Beaches shows a dramatic increase in demand for homelessness services in the community locally. We have several hundred homeless people on the Northern Beaches. Every night in Australia there are around 120,000 homeless people sleeping rough. We have a need of around 300 to 400 social housing units within just the Northern Beaches Council area every year. Added to this is domestic violence, which is in every community, including the Northern Beaches. Our domestic violence shelters are full, and many women have nowhere to go. Northern Beaches Women's Shelter has to turn away some 25 women a month. They need more affordable housing and more transitional and emergency accommodation, but there will never be enough. We must flip this dynamic, introducing a presumption for women and children to stay in the family home and giving greater support to programs like Staying Home Leaving Violence. This program works in cooperation with New South Wales police to remove violent partners from the family home so that the other partner and children can stay safe.

We also need policies to address intergenerational inequity. There are so many that are feeling so despondent about their prospects. It's concerning that so many young people feel that homeownership is now unreachable because of the obstacles the current housing market has created. So what are the solutions to the housing crisis? What is the road map, and how do we implement it? There are some solutions, and this bill is a start. I would say it's not an ambitious start, but it is a start. There are other solutions as well, some of which have been spoken about in this place. I've spoken about some of these solutions before, but it's now more important than ever to raise them again.

One of the key levers the federal government can use to address this is of course tax reform—a hot topic in recent weeks—by, for a start, supporting state governments to transition from the inefficient tax of stamp duty to a general property tax. Stamp duties are inefficient taxes. They discourage people from moving to housing that better suits their needs. Proposals to make the shift are difficult to achieve because of the initial loss of tax revenue for the state. The federal government should commit to filling part of the revenue hole arising should a state government wish to swap stamp duties for property taxes, including any reduction in the state's share of GST.

We know that there are too many dwellings in Australia, particularly in Warringah, where we have empty-nesters. We have a large dwelling, but the children have moved out; they're adults. But there is no incentive in the system to assist people in downsizing. Instead, they've paid off their home, but you then hit them with a stamp duty tax if they try and move or downsize. So there's just no incentive in the system at all at the moment to help solve this problem. Of course, supply will be dealt with by building more, but it has to also look at incentivising that downsizing so that you free up what supply there actually is. Proposals to make the shift are often difficult because they get politicised and weaponised. But still we now are at a crisis point.

Increases to Commonwealth rent assistance and better targeting of the scheme is another lever that should be considered to address the growing rates of housing stress and homelessness, especially amongst older women, who are the fastest-growing group suffering homelessness. Rent assistance works; we know that. In 2021 it reduced housing stress levels for recipients nationwide from 72 per cent to 46 per cent, but the maximum rate of rent assistance hasn't kept pace with the rising rents paid by low-income renters. I remind you that the average rent in Warringah is $620 a week. That simply is not going to allow anyone to house themselves on rent assistance. The government needs to review rent assistance to ensure it is at an adequate level.

In parallel with this, governments should consider incentives for providing long-term lease arrangements to increase housing security and stability in the rental market. There is so much more we can do. We are far behind European countries when it comes to renter rights and incentives to ensure longer leases are provided. There just isn't anything like the kind of acceptance or mechanisms in place in Australia compared to overseas.

So there is so much more to be done, and I call on the government to focus on that because there's no doubt, as we head into another election—probably by next year—that housing and intergenerational equity will very much be on the agenda. Young people want to know there are solutions, but the party that forms government needs to have solutions around this.

What does the bill before us do? The Help to Buy Bill will help some get into owning their own homes. Help to Buy is set up as a shared-equity scheme, and it will give successful applicants a Commonwealth equity contribution of up to 30 per cent of the purchase price of an existing home and up to 40 per cent for a new home. The number of applicants is limited to 10,000 per year for four years. There are caps at certain price levels which vary according to locations, and it's capped at certain income levels. It's limited to applicants with no current other properties, and it requires applicants to provide a two per cent deposit and demonstrate other financial capabilities.

These are all good measures. The government will retain an equity share in the property, making it a part owner, thus reducing the amount of the loan which the buyer will have to pay off. But, in order to achieve sole ownership of the property, eventually the owner would have to buy out the equity. The current caps for Sydney properties are set at $950,000, so it's more than likely that this will not help many in Warringah, where the median house price is more than double that.

I would urge the minister to keep a watching brief and adjust property and salary thresholds further once the program is fully established and shown to be effective. Such caps won't be locked into the legislation. The big advantage is that only the two per cent deposit is required. Raising the necessary deposit has of course been a huge barrier to people entering the housing market, so this will be a relief to many who don't have other means of raising the deposit.

The scheme will also help many older Australians, especially many older single women, and to that effect I support the amendments moved by the member for Goldstein in assisting a focus on women. Just 34 per cent of women who separate from their partner and lose the house in those proceedings manage to purchase another home within five years, and that statistic gets even worse because only 44 per cent of women do so within 10 years. So imagine five years after separation or some 10 years after you still have less than half of those women have been able to rehouse themselves. By contrast, 42 per cent of men separating after a divorce or separation buy a home within five years, and 55 per cent within 10 years. There's a clear discrepancy in outcome upon separation when that occurs. That is why it comes as no surprise that women over 55 are at the highest risk of homelessness.

The member for Wentworth has also introduced an amendment I strongly support, which is to bring more review over the process and make it a disallowable instrument. It's very important when we're talking about so much public money and such an important scheme that everything be reviewable and that there be diligence and accountability in this place.

I support this bill. I do welcome what it brings to the table in starting to help home ownership for those who simply cannot do it at the moment. There are grave fears that it will raise prices because it will increase demand. Clearly the pendulum needs to be matched with an increase in supply to ensure that prices aren't raised. There are many other aspects that need to be looked at by the government.

In Warringah there is a high level of foreign ownership of real estate and homes and there's a high level of vacancy of homes, yet there is still no mechanism that really addresses those issues. I think there are a number of areas where federal, state and local governments need to work together to look at whether we're fully occupying and fully utilising the homes and the stock we already have and whether we're prioritising the means by which we can increase supply and have more available.

Every tool in the toolbox is needed to help alleviate the current crisis and ensure that younger Australians, in particular, can realise their dream of home ownership. If we choose not to change our policy and to implement new policy, the crisis will turn into catastrophe for many more Australians.

I urge the government to be bold and courageous and to look at more solutions. This is a good start but more action is needed. And, of course, when we talk of home building and increasing supplies, please stop allowing and enabling building in danger-prone areas. Only today I met with insurers so concerned at the catastrophic level of risk that so much housing stock is exposed to from the impacts of climate change including floods in flood zones. We are facing a disaster—an absolute cliff—where so much housing will not be insurable. And if it is not insurable, you have no means of balancing the equity for mortgages and you are going to have a situation where the government will need to stand in and solve this problem. So we can't be building more supply in a way that is reckless to the risks that we have ahead.

I urge the government to work with state governments to ensure that we are not opening up areas that are high risk for development. Developers should bear a much greater cost. A proposal that was put to me today was that we should actually have green, yellow and red warnings in our conveyancing contracts in relation to the risk exposure of properties do that a buyer is aware that you are on notice and developers will have to carefully consider whether that land is the best place to develop.

Lastly, I should say to everyone in Warringah, I will be hosting a housing forum in the coming months to hear your views and to be able to come forward with solutions to ensure our young people can stay local, they can stay and work and have their families in our area in an affordable way.