Australia’s housing crisis festers as reforms stuck in political gridlock

A key piece of the centre-left Labor government’s housing programme is in limbo after opposition parties on Wednesday voted to defer for two months legislation that aims to help first homeowners break into the market. The bill is for a shared equity scheme which would allow citizens to buy houses with a smaller deposit.

A separate bill that would give tax incentives to developers to build rental housing could face the same fate on Thursday, after also drawing criticism from opposition parties. The changes are intended to attract institutional investors.

“The build to rent idea I think is a very bad idea,” Senator Andrew Bragg, who has spearheaded the centre-right opposition’s position on housing, said in a radio interview on Tuesday. “Australians don’t want to live in a country where corporations are landlords, like BlackRock, and so that’s why we’re against these policies which corporatise the housing market and give up on home ownership.”

Home prices in Australia are rising even with interest rates at a 12-year high, reflecting demand that’s outstripping supply. On the other side, rental vacancies fell in August to just 1.39 per cent, close to the February low of 1.09 per cent, according to PropTrack.