Stop feeding the fire

Why housing policy must be about building, not bidding

The recent proposals from both Albanese and Dutton regarding housing are focused on demand-side incentives, yet they fail to address the fundamental issue: the lack of available housing.

Albanese is offering a 5% deposit scheme. Dutton’s pitching a tax break on mortgage interest. Both sell it as relief for first home buyers. Both say they’re helping Australians get a foot in the door.

But once again, there’s no door to open, because neither side is seriously talking about building the homes we actually need.

Not nearly enough enough supply

Experts like Martin Parkinson and Saul Eslake have criticised these policies, highlighting their potential to worsen the housing crisis. The core problem lies in the insufficient supply of homes, and these policies merely fuel demand in an already strained market.

The Labor party’s 5% deposit scheme is based on flawed reasoning, much like other schemes that encourage buyers to overextend themselves in a market with insufficient housing supply. It prioritises optimism and market forces over public investment and strategic planning.

The Coalition has a new policy proposal that allows first-time home buyers to deduct their interest repayments from their taxes. This proposal is being promoted as a smart, targeted, and aspirational policy. Yet, it targets supply but boosts demand leading to stalemate. The market can’t fix what the market broke.

The market can’t fix what the market broke.

You’ve identified the problems, now give me solutions

The trick is not to assist buyers in competing for scarce housing, but to increase the supply through public housing, and government-built homes.

Imagine if we built secure, sustainable homes which were rent-capped below market rates, designed with longevity in mind, built with local materials and labour. Built in our urban centres that need to be reinvigorated.

Imagine a system that gave people housing stability so they could save, raise families, or age in place, without the constant anxiety of rent hikes or eviction. And these places aren’t on the edge of town, they are in town.

They aren’t always an identikit ‘quarter-acre block’, they are medium and low density. They don’t have to be bought outright, neither do they need to be privately owned.

This isn’t radical. It’s how we used to do things.

The current major-party approach to the housing crisis is misguided, focusing on competition and incentives for first-time home buyers rather than addressing the root issue: a lack of housing supply. 

The real solution lies in building more homes, a solution that is often dismissed as too difficult.

Aren’t the Greens already saying this?

Their plan gets a lot right. A federally owned public property developer? Yes, please. Delivering 610,000 affordable homes over a decade, with 70% offered as rentals capped at 25% of income or 70% of market rent? That’s real relief.

But their plan to sell 30% of homes near construction cost is playing with the market. And their mortgage reforms are not practical. They seems to be about busting the housing market, not complementing it. They want to target private owners.

I see alternatives that can co-exist.

If housing is going to be a major election issue, we need to have an honest conversation. The market is broken, and we need to reshape it, not just find better ways to enter it.  

The solution begins with building, not bidding.