Unlocking Supply of Family Homes Bill 2025
Senator HUME (Victoria—Deputy Leader of the Opposition) (10:23): I rise today to speak in support of the Treasury laws amendment Unlocking Supply of Family Homes Bill 2025. When I introduced this bill in November last year, Australia's housing market was already under pressure. At that time, the national average auction clearance rate was around 65 per cent and the RBA's cash rate was 3.6 per cent.
Today it's a very different situation. The national auction clearance rate is around 55 per cent, which is actually its highest level in 11 weeks, and the cash rate is at 4.35 per cent. Just yesterday, the ANZ bank warned that property prices could fall by as much as 15 per cent.
That's the difference that 10 months and a Labor budget can make to the Australian housing market. Confidence has clearly fallen. It's clearly tanked.
Borrowing costs are higher and buyers are under immense pressure. In a market like this, we should be asking a very simple question: why would anyone want to downsize? But that's precisely why this bill is needed right now.
We should be making it easier, not harder, for Australians to make sensible decisions about their own homes. This is a very practical, sensible and simple reform that addresses two problems at once. It can help improve the supply of family sized homes available to younger Australians while giving older Australians greater flexibility to make housing and retirement decisions that suit their circumstances.
The bill builds on the coalition's original downsizer contribution policy which was introduced in 2017-18. The principle behind that policy was very straightforward, indeed. If an older Australian wants to move from a large family home into a home that better suits their needs as they get older, we shouldn't put unnecessary financial or administrative barriers in their way.
In fact, we should be making that path easier for them. When that large home that they've had is available to the market, another Australian family has the opportunity to move into it. So that's the economic logic behind this bill—increasing the flow of homes that are available to all Australians.
We need more homes in Australia, most importantly, but we also need to make better use of the homes that we already have. The Australian housing market is under enormous strain right now. Younger Australians are working extremely hard.
They're saving diligently. They're doing everything that's expected of them, and yet increasingly they can't find homes that meet their needs and meet their budgets. The dream of owning your own home, particularly owning a family home, has never felt so far out of reach for young Australians.
I've previously spoken in this place about a woman named Julia, a 27-year-old lawyer from Melbourne who wrote to me about the difficulty that she and her husband were having finding a home where they can raise their family. They're both in good jobs. They're both doing all the right things.
Her husband's an electrician. She's a lawyer, as I said. They're not asking for anything extravagant.
They want a three-bedroom home, a backyard, a shed and somewhere that they can raise their children. I don't think that's unreasonable. But, despite their two incomes, they're being priced out of the kind of home that they need.
This is a story that's being repeated right across the country. At the same time, there are older Australians who are living in homes that are larger than they need and no longer suitable for their lifestyle or mobility needs. In this current market, when confidence is so weak and property values are so uncertain, there is even less incentive to make a major housing move.
That's why we should be looking at every possible practical lever available to keep housing stock flowing, and this bill does exactly that. It makes three very straightforward changes to the existing downsizer contribution rules. Firstly, it lowers the minimum age of eligibility from 55 to 50.
Secondly, it extends the period in which downsizer contributions can be made after a settlement from 90 days to one year. Thirdly, it increases the maximum contribution into superannuation from $300,000 to $500,000 per person. That means that an eligible couple could potentially, on the sale of their home, contribute $1 million from the sale of that home into their superannuation without penalties.
The existing requirement to have owned their own home for 10 years before they do that remains. This is not a wholesale rewrite of the system; it's simply keeping up with modern markets. It's a targeted improvement to a policy that is already working.
Since 2018-19, almost 100,000 Australians have made downsizer contributions on the sale of their homes into their superannuation. So that's almost 100,000 Australians that have used a policy that was designed by the former coalition government to make a housing transition whilst strengthening their retirement savings, both of which are good things. The coalition is proposing to make that policy work for more Australians.
The current age threshold can discourage Australians that are in their 50s from making a housing decision that may be completely appropriate for their circumstances. Downsizing is not something that becomes relevant the moment you turn 55. It can happen when your children have left home.
It can happen when a property that you have right now becomes too expensive or difficult to maintain. It can happen when mobility issues arise or it can simply happen because people decide that they no longer need or want to maintain a large family home or a large garden. The decision is very, very personal.
The government should not be telling Australians to wait until an arbitrary age before they can access an incentive that may help them make decisions for themselves. Lowering the age to 50 gives Australians greater flexibility to make that decision when the time is right for them. The existing $300,000 limit was set at a time when housing values were very different to what they are today.
Family homes have increased substantially in value over those years. A $300,000 contribution may no longer provide the same meaningful incentive that it once did. Increasing the limit to $500,000 better reflects the values of housing assets that Australians have accumulated over decades.
For a couple, it means that there's the potential to put up to $1 million of the proceeds of the sale of their family home into their superannuation for their retirement income. Importantly, this is not a tax deduction. The money is coming from an existing asset: the family home.
The reform simply gives Australians more flexibility to move those proceeds into their retirement savings. The current 90-day period can create unnecessary pressure, and selling a family home and finding the right replacement property is not always something that can be done within a period of three months, particularly in a market facing the uncertainty that we're facing now.
Someone may sell their home and then discover that the smaller or more accessible property that they had in mind simply isn't available. They should not then be forced into making a rushed housing decision, something that they might want to live with for the rest of their lives, simply to meet an arbitrary administrative deadline. So extending the contribution window to 12 months allows people to sell first and take their time to find the right home before making that contribution.
That's common sense. It's important to note that this bill is entirely voluntary. It doesn't force anybody to downsize.
It doesn't interfere with the family home. It doesn't tell older Australians how they should live or where they should live. It simply removes some of the financial and administrative barriers that can make downsizing your home less attractive.
Older Australians get greater choice, younger Australians get the potential benefit of a more family sized home coming onto the market, and the housing market gets yet another mechanism for making better use of the housing stock that we already have. That's why this is an intergenerational housing measure. Labor likes to talk a lot about intergenerational fairness.
Well, here is an opportunity to actually deliver it with the mechanisms that we already have. Younger Australians need more opportunities to access those family sized homes, and older Australians deserve greater choice over how and where they choose to live. These objectives are not in conflict.
In fact, they can reinforce each other. When an older couple moves from that four-bedroom family home into a smaller home that better suits their needs, that family home does not disappear; it becomes available to another Australian family. That could be a young couple trying to enter the market, a family with young children that need more space or a family moving from an apartment into a home with a backyard.
But it's about keeping that housing stock moving rather than seeing these artificial blockages in the arteries of the housing market. That matters because Labor's housing policies have failed to deliver the homes that Australians need. Let's not forget Labor promised 1.2 million new homes, but Australia is struggling to build at the pace that is required.
The government have presided over an historic housing construction collapse, and at the same time they've also overseen an incredible rise in the number of new migrants to Australia. Our population growth has surged because of Labor's out-of-control migration policy. Under Labor, Australia is building around 170,000 homes per year.
That compares to the 200,000 per year that were built under the coalition government. Labor has spent tens of billions of dollars —billions, not millions—on housing, and at the same time it's making it more difficult and more expensive to build houses. The government's own tax changes are expected to mean that 35,000 fewer homes are built over the next decade.
That should be a warning bell to everybody—the idea that you would make tax changes that would build fewer homes and have that written in black and white in your own budget papers. Fewer homes and higher rents—how can that be a policy for intergenerational fairness? We know that this is true because mortgage applications have fallen so sharply just since May's budget.
The economists are now warning that weaker demand will flow through to fewer transactions, less construction and tighter housing supply. You cannot solve a housing shortage by taxing investment, by smashing confidence and by making it harder to build. Australians need more homes, not fewer homes.
We need to make it cheaper and easier to build new homes, but we also need to make better use of the homes that we already have, and that's why the coalition has a comprehensive housing agenda. We would scrap Labor's housing taxes—those terrible taxes that are discouraging investment and discouraging new builds and that are taxing those that are doing the saving to buy their first home.
We would cut red tape, and we would cut the green tape that is making it so much more difficult and more expensive to build a new home. We would simplify the National Construction Code while preserving core safety standards, and that would have the potential to cut the cost of building a new home by up to $70,000. That National Construction Code used to be 200 pages.
It used to be a document that would fit in the glove box of a tradie's ute. Now you need the ute to carry around the 2,000 pages of the National Construction Code. We will also establish a $5 billion housing infrastructure fund to help unlock the 400,000 new homes by investing in the essential infrastructure that allows housing developments to proceed, and we would also remove the ineffective and inefficient housing programs and bureaucracies that have failed to deliver the homes that Australians were promised by Labor.
But not every housing reform needs to involve billions of dollars of government spending. Sometimes the best thing you can do is simply remove a barrier. Government can just get out of the way.
And that's exactly what this bill does. It takes a policy that was introduced by the former coalition government, makes it more flexible, more contemporary and more relevant to the housing market and the problems that Australians are facing today. It recognises that there are thousands of Australians who may want to make a different housing choice but need greater flexibility to do so, and it recognises that retirement security and housing supply can be two parts of the same policy solution.
It recognises, too, that we need to make better use of the housing stock that we have right now, not just build new houses. That's on top of building new houses. We need to give Australians greater freedom and greater choice to make decisions that suit their circumstances, not be dictated to by government edict, and we need to stop putting unnecessary barriers in the way.
The coalition believes that homeownership is a foundation to strong families, to strong communities and to a strong society. Family homes and families should be at the centre of every policy decision that is made. Young Australians should be able to work hard.
They should be able to save, and they should be able to aspire to buy a home. That's not unreasonable. Older Australians should have the freedom to make decisions about housing and retirement that work for them.
This bill brings those two interests together. It won't solve Australia's housing crisis on its own—we know that; we're not saying that it will—but it is one part of the policy solution, the policy agenda, the policy suite that will actually deliver for Australians what everybody wants. There's no excuse for Labor to oppose a practical reform that can help.
When the housing market is under pressure, we should be using every sensible lever that's available to us. We should be making it easier for homes to change hands, not harder, and certainly not more expensive. We should be giving older Australians more choice, not fewer options, and we should be doing everything that we can to give young Australians a better chance of finding a home in which they can build their future.
Australia needs more homes—of that, we are in complete agreement—and we need to make better use of the homes that we already have. This bill helps to do both, so I commend this bill to the Senate.