News site of the year

NSW
  1. Home
  2. News
  3. NSW News

Housing affordability: experts urge Gladys Berejiklian to act

NSW Premier Gladys Berejiklian is being urged to consider a range of reforms to improve housing affordability – from abolishing stamp duty to subsidising purchases by first home buyers – after she declared the issue a key priority of her new government.

Shortly after being unanimously elected Liberal leader at a party room meeting on Monday, Ms Berejiklian declared housing affordability among her three key priorities, alongside local infrastructure and a strong economy.

Up Next

Could this be Australia's new libertarian leader?

null
Video duration
01:28

More NSW News Videos

null
Video duration
01:28

Could this be Australia's new libertarian ...
null
Video duration
02:00

How Angela beat her hoarding habit
null
Video duration
03:39

How to swim out of a rip
null
Video duration
00:37

Fiery truck crash north of Sydney
null
Video duration
01:39

Four students hit by falling tree branch
null
Video duration
00:12

Branch falls on Sydney high school ...
More videos

Gladys Berejiklian's priorities as Premier

Gladys Berejiklian has made clear her plans as NSW's 45th Premier –- but can she pull them off?

"That is the biggest issue people raise with me in Sydney; it's the biggest concern people have across the state," she said.

Ms Berejiklian, who as Treasurer resisted calls to axe residential stamp duty in favour of a broad-based land tax, said the option remained "not my preference".

She said housing supply was "the best way to address housing affordability" but said the government needed to do more.

"I will be open-minded to seeking advice of people outside the government, outside the bureaucracy, outside elected officials to support us in that," she said.

Advertisement

Ms Berejiklian's comments came as new data showed that by the end of 2016, Sydney's median house price climbed more than 10 per cent to a record $1,123,991, according to Domain Group's House Price Report, owned by Fairfax Media.

Steve Mann, the chief executive of the Urban Development Institute of Australia – a developer group – said scrapping stamp duty in favour of land tax "remains just as important as it always has been".

But he also said supply remained "a very big driver of housing affordability".

Mr Mann supported Planning Minister Rob Stokes' proposed changes to the Planning Act, and Mr Stokes' suggested measures to fast-track supply of terrace, or medium density, housing in Sydney's suburbs.

He said there was a need for "catalyst infrastructure" such as electricity and water supply, which could be built quickly to serve discrete developments.

Housing academics said Ms Berejiklian needed to do more than simply increase supply.

"We've had large increases of supply and it hasn't done much to moderate the problem," the chairman of urban and regional planning at the University of Sydney, Peter Phibbs, said.

"It's just a very blunt tool in an era of such low interest rates, when tax settings are the way they are," he said.

Replacing stamp duty with a more regular stream of land or value-based taxes would be useful, he said.

So, too, would advocating for federal tax reform, and mandating the construction of dedicated affordable housing in new development sites.

The director of the City Research Centre at UNSW, Bill Randolph, said Ms Berejiklian should follow Mr Stokes and advocate for curbing negative gearing concessions that benefit investors over first-home buyers.

"She needs to push her federal colleagues into taking affordability seriously and to look seriously at the tax and subsidy arrangements," Professor Randolph said.

Mr Stokes has called on the federal government to put restrictions on negative gearing.

Professor Randolph said other policies worth trying include "shared equity" schemes under which the government would help home buyers by taking an investment stake in their properties.

Professor Randolph also recommended overhauling stamp duty. "I've always thought of stamp duty as a feudal anachronism," he said.

"It is inappropriate that a buyer should have to pay a tax ... it is much better if the tax is taken consistently over time."

As Fairfax Media revealed on Monday, Ms Berejiklian also acknowledged that she has been reviewing some of the Baird government's more contentious policies.

On council amalgamations, she said she was open to discussions with the Nationals, who are pushing to halt further mergers in regional areas.

Asked about the proposed privatisation of the Land and Property Information service, Finance Minister Dominic Perrottet, standing alongside Ms Berejiklian as the new deputy Liberal leader, did not rule out changes.

However, Ms Berejiklian said she was comfortable with the current situation with the lockout laws for licensed premises.

She would not be drawn on the reshuffle expected next week.

The focus on housing affordability comes after Ms Berejiklian selected Sarah Cruickshank, the executive director of the cities branch of the Department of Premier and Cabinet, as her chief of staff.

The two have been friends for more than 20 years, and Ms Cruickshank has significant experience in the state and federal public service.

She was an assistant secretary in the Department of Climate Change and Energy, and assistant secretary in the G20 Taskforce in the Department of Prime Minister and Cabinet, until moving to work for the state public service in 2015.