An independent review into housing affordability headlines Master Builders’ annual Pre-Budget submission to the State Government.

Master Builders’ research shows that homes in Melbourne are less affordable than all other capital cities except Sydney and are less affordable than they were a decade ago. 
The average Melbourne house cost 5.7 times the size of median yearly household income (before tax) in 2002/03. It has since increased 3.5 per cent, meaning the average house costs 5.9 times the size of annual household income. This compares to ratios of 7.0 in Sydney, 5.6 in Adelaide and 4.8 in Brisbane.
graph1
Source: Real Estate Institute of Australia

Our call comes as new data shows fewer than 1700 first home buyers entered the Victorian market in November – the lowest monthly figure since early 2011.

The Victorian Competition and Efficiency Commission has previously calculated the costs to business of complying with land-use, planning and building regulations are between $500 million and $875 million per year, adding significant pressure to housing affordability and reducing the competitiveness of the homebuilding industry.

  • In addition, other outcomes Master Builders has called for include:
  • Introducing incentives for councils that deal with planning matters in a timely, sensible manner;
  • Reconsidering parallel builder arrangement rules, which adds to the cost of new homes;
  • Funding to upgrade sustainable energy measures in existing homes; and
  • Requiring tradespeople to be registered, to help boost onsite productivity

“There are a widespread number of taxes, levies, charges and fees added to the price of new homes across multiple levels of government,” said Master Builders Chief Executive Officer, Radley de Silva. 

“If government is serious about housing affordability, then we need to look at these charges and identify ways of reducing costs while promoting the benefits of home ownership to young Victorians.”

“The Victorian Government has introduced reforms to encourage first home buyers including grants for newly built or off-the-plan homes and significant stamp duty discounts.”

“Now it’s time to look at the underlying factors impacting home ownership with an independent inquiry so we can tackle housing affordability now and in the future.”

Click here to see Master Builders’ Pre-Budget submission, which also includes the latest forecasts for residential building activity.

You can also hear more directly from the State Government at our 2014 Conference, when Treasurer Michael O’Brien will address our industry and take questions from those attending.