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Two conflicting plans on how to deal with housing affordability.

Source: SBS

Key point of contention between the two groups is whether negative gearing should stay or go.

Housing analysts have yesterday offered conflicting plans for how to tackle Australia’s housing affordability crisis.

The Property Council of Australia has released a 10-point 'Fixing Housing Affordability' plan that proposes increasing the supply of homes, lowering housing production costs and phasing out stamp duty.

Chief executive Ken Morrison says the council also wants low deposit loans for first home buyers, similar to the so-called ‘Keystart’ scheme in Western Australia.

"It is very difficult for people on modest incomes to get into the housing market for the first time in our big cities,” Mr Morrison told SBS News.

“It's tricky, because there's a whole bunch of detailed policy that needs to happen at a state level and a local government level, and we do see a role for federal leadership."

The Australian Council of Social Service has released its own six-point plan, prioritising low to moderate earners.

"We need to get more growth in social and affordable housing, so social housing, which is for people on really low incomes, and then affordable housing for people on very modest incomes,” explained CEO Dr Cassandra Goldie.

“We've got to set very clear targets and make sure that the income levels are factored into the financing arrangements."

The future of negative gearing?

But a key point of contention between the two groups is whether negative gearing should stay or go. Dr Goldie believes the system must be phased out.

The Property Council disagrees, and argues negative gearing should not be changed, as does the Housing Industry Association's Graham Wolfe.

"The negative gearing helps investors come to the market, purchase off the plan, helps drive the construction and brings more supply into the marketplace,” Mr Wolfe told SBS News.

“All three levels of government are aware of the role that they play. What we do need, however, is those three levels to sit down constructively, in a coordinated way, to understand their roles."

All the housing groups do agree that, in Australia's major cities, supply is a big problem. Mr Morrison says there simply are not enough homes for prospective owners, meaning there is little competition, or need to bring down prices.

"Fundamentally, we need policies which are targeting that supply, reducing the cost of new housing construction, ensure that we've got more housing coming through and that the housing-construction cycle that we're in lasts longer," he said.

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Source SBS News