Unlocking Supply of Family Homes Bill 2025
Senator KOVACIC (New South Wales) (10:51): I commend my colleague Senator Blyth for her comments and Senator Hume for bringing forward this bill, the Unlocking Supply of Family Homes Bill 2025. We have a housing crisis in our country. This isn't something that we can pretend isn't happening.
We have to have tangible measures in place that help us solve that crisis, and this is an example of that. This is core to who we are and what our values are. We believe that homeownership is foundational to strong families, to strong communities and to a strong society.
We believe that every single person that hopes to have their own home, to buy their own home, should be able to do that. We believe that government should get out of their way so that they can do that, and we are very concerned about the way this government is managing our economy and the impacts that that is having on everyday Australians. This government has delivered an absolute trifecta of failure on housing.
We have fewer homes, we have higher rents, and confidence in our country and in our housing market has completely collapsed. I was working in financial services during the GFC in 2008, in the home loan sector, and we had about 48 hours to pivot the entire lending policy of one of Australia's major banks. That was a really tough time and a really tough period globally and for our country.
In the last couple of weeks, I've had conversations with some colleagues who I worked with at that time. They have told me that it is worse today. It is worse now, under this Albanese Labor government, than it was in 2008 with the GFC.
We need to let that sink in for a minute and think about what the actions of this government and the policies of this government are doing to create that, compound it and make it worse. I think the budgetary measures in relation to the CGT, negative gearing and SMSF borrowing have clearly impacted that. They have impacted confidence and they will impact housing supply.
What this bill does is turn it back the other way. It actually unlocks the supply of housing, and it is aptly named the Unlocking Supply of Family Homes Bill 2025. We have people who are in homes that are too large for them.
They have more space than they need, but there are barriers that are preventing them from exiting those homes. They will be financially worse off if they do that. So it makes complete sense to put measures in place to change that.
To give you some historical context, when Senator Hume introduced this bill in November 2025, the national average for auction clearance rates was around 65 per cent, and the RBA's cash rate was 3.6 per cent. Now, today, after this government has had more time to trash our economy, the clearance rates have dropped to 55 per cent, and the cash rate is 4.35 per cent, noting we've had 13 interest rate rises under this Albanese Labor government.
The ANZ bank is warning that property prices could slump by 15 per cent. This is a crashing of our economy. This is a serious concern.
That's the difference of 10 months and an Albanese Labor budget that has caused a crisis in our housing market. But, for a moment, don't just think about the headlines that some in this chamber have been speaking of. 'It's great. This is what we want, so more young people can enter the market.' Think for a moment that this is a crash in economic confidence, but also for a moment think about all of the young people who, last year, those opposite said were getting their first opportunity to enter the market with the five per cent deposit scheme—that that was a great signal and a great opportunity for them to own their own home. 'Look at what the Albanese government has done for you.' Those are the very same people that will be first impacted by negative equity, based on what this government did next.
You have drawn in these people who have used all of their life savings to enter the market, and, once you've got them, you've basically pushed them and drowned them. That's not something that I'm making up. That's a reality.
That is what negative equity is. It is when you owe more on your home than it's worth. Negative equity isn't whether you're ahead on your repayments or not; it's when your asset is worth less than what you paid for it.
That is what has happened and will continue to happen to many of those people who entered that scheme if this continues. Then the question is: Why would anybody want to downsize in this market? Why would they bother?
Why would they take that risk? They would just stay where they are because there are costs and risks with downsizing. You have costs to pay to sell your property, and you don't know what you're going to be able to buy.
You don't know what's going to be out there, because, like you, others are hanging onto properties. That's why we need to make downsizing easier, not harder. This bill provides a simple, practical reform that helps address two problems at one time: housing supply for younger Australians and retirement security for older Australians.
It builds on the coalition's original downsizer contribution policy, which was introduced in 2017-18. The principle is pretty straightforward. It makes it easier for older Australians to move into homes that better suit their needs, while freeing up larger family homes for young families to buy.
At a time when housing supply is under extremely intense pressure, we should be looking at every practical way to get more existing homes into the market. What problem are we trying to solve? It's an access problem and a supply problem.
The dream of owning your own home has absolutely never been further out of reach. We have young Australians who are struggling to find homes that meet their needs and are within their budgets, and then we have older Australians who are living in homes that are too large and not suitable for their lifestyle or for their mobility needs. So we have this double whammy, at both ends, and we're not doing anything to enable one to flow into the other.
Expanding this policy means more Australians can access that incentive earlier and with greater flexibility. When a larger family home comes into the market, it can provide an opportunity for a younger family to enter the market or move into a home that better suits their growing family. This bill is going to do three very straightforward things to change the existing downsizer contribution rules.
No. 1, it will lower the eligibility age from 55 to 50. That's a pretty simple mechanism, and it would be quite effective. No. 2, it extends the contribution window from 90 days to one year after settlement.
Why is this important? It is because you can't always get things done in 90 days. Three months is a very short window.
If you're allowed to have that extra window that takes you to 12 months, it provides people with greater options but it also gives them time to plan what they're going to do, particularly in a volatile market like what we are starting to see now, where they actually might not know what they're going to get for their own home until they sell it. You actually can't make those plans until you know what your tangible outcomes are going to be.
This is something that the people that have created the current set of rules and the budget changes that we've seen from this government haven't thought about. The government, with the assistance of Treasury, has taken the approach of looking at these things in a very black-and-white fashion without having a look at how people actually have to make decisions in their own lives, which is very different from a spreadsheet and a formula, and we've seen that now unfold publicly.
A great example of that is the widows tax, which, shamefully, those on the other side and, I'm sad to say, also the Australian Greens voted for, knowing the impact it would have, knowing the harm that it would cause but still choosing to legislate it, still choosing to pass it, because it provided a public opportunity to wave a win in the air instead of doing the job that we're asked to do here, which is to make Australian laws robust and the best that they can possibly be.
It is not saying, 'We'll just get it across the line so we can say we won, and we'll fix it later.' Australians deserve better than that. They deserve a government that is better than that. They deserve treatment that reflects the enormity of the challenges that they're facing, not greater confusion when things are already hard enough.
That's why we've seen this collapse in confidence. The third thing that this bill does is increase the contribution limit from $300,000 to $500,000 per person. This means a couple could potentially contribute up to $1 million from the sale of their family home.
The existing requirement is that you have to have owned your home for 10 years, and that would remain unchanged. All the other existing eligibility requirements would remain in place, and the contribution would remain a non-concessional contribution and wouldn't count towards the annual contribution caps. With three very simple changes—lowering the age from 55 to 50, extending the window from 90 days to a year after settlement and increasing the contribution limit from $300,000 to $500,000.
I don't know why anybody would object to that at any point in time, but I especially don't know why anybody would object to that in the current environment in which we find ourselves, which I remind everyone is the complete crushing of confidence by this government in the housing market, where Australians do not feel confident to buy. We talk about why the auction clearance rates have dropped.
They've dropped because there is no confidence in the market and they have dropped because there have been 13 interest rate rises under this government. How do we not remember that? How can we forget 13 rate rises under this government in four years?
And then, at the budget, we have them deciding to tax all classes of assets at a minimum 30 per cent of CGT, including small businesses, including shares, including ETFs, including the savings that young people squirrel away in order to save for their first home because it is so unattainable. The reason they claim they did that is to make housing cheaper. I still fail to understand how taxing someone's small business makes a house over here cheaper.
I fail to understand it, because it doesn't. It's not because I lack the comprehension; it's because it actually has no relatability to it. The next thing this government have done, with the assistance of the Greens, is blindsided people with self-managed super funds by taking away or banning limited recourse borrowing for property.
Explain to me why an industry super fund can own housing in this country but Australians that have an SMSF cannot. Why do we have two sets of rules? Why are we only allowing institutional investors to invest in housing in our country?
The problem—let's step away from the inequity of that—is that this is again going to reduce supply in our housing market at a time when we cannot afford to lose any supply at all. SMSFs often purchase, off the plan, properties that go into the rental market, because someone who owns an SMSF can't live in those properties. They have to be arm's-length transactions.
So the houses that they are purchasing go into the rental market, and this government has taken that away as well.