QUESTIONS WITHOUT NOTICE: TAKE NOTE OF ANSWERS
Senator SHARMA (New South Wales) (15:01): I move: That the Senate take note of the answers given by ministers to questions without notice asked by coalition senators today. What we have with Labor's housing policy today, explained to us in question time, is a series of misses and own goals. We've got fewer homes being built.
We've got higher repayments, if you're a mortgage holder. We've got higher rents, if you're in the rental market. We've got falling house values, and, increasingly, we've got home borrowers in the situation of either negative equity or mortgage prison, as it's called.
The Foreign minister was quite right to point out that this was a supply issue, fundamentally an issue of supply and demand, but, if you agree with that diagnosis, then the prescription needs to be more supply. What we've seen from this Labor government is less supply. We're seeing fewer homes being built—173,000 homes last year versus a requirement of 240,000 homes a year to meet Labor's own housing accord targets.
We've got builders in the construction industry going broke. We've had 13,000 construction businesses become insolvent since Labor came to office, and we're seeing more and more collapses in the construction industry. Builders are not building right now, because, in a falling market, they can't pre-sale.
They can't pre-sell apartments and properties. They find it harder to raise capital, and they can't guarantee a return on their investment, so you've got builders putting down their tools. We've got a lack of investor confidence.
The changes to tax settings, the abolition of negative gearing and changes to the capital gains tax discount regime, in Labor's budget of broken promises is causing investors to withdraw from the market. Labor's own predictions in the budget said that there would be fewer homes and higher rents and a moderation in house price growth, but what we are seeing is all of those things happen at a much faster rate and in a much more pronounced way than we expected.
In the situation we've got right now, if we've got falling house prices, we've got investors sitting on the sidelines, because they don't want to invest into a falling market. Further, we've got institutional investors and individual investors no longer able to enter the market in the same way, because of the changes to the negative gearing treatment of investment property and existing homes, so we've got less investment in the market.
We've got builders building less because of less confidence in the market, and we've got fewer homes being built. You put all that together—the housing market is in crisis here in Australia. This isn't just a cyclical correction.
This is a fundamental change to the structure of the housing market. Just today, there are reports that it's now going to take new homeowners some eight additional years to save for a house deposit, if they're doing so through vehicles like shares or like managed trusts or investments, because of changes to the capital gains tax regime. Reports again today are showing that a large number of Australian households are in so-called mortgage prison, owning less than 20 per cent of equity in their home because of the deterioration of values.
If you're a renter right now, you're paying more. All the indications are that, with the rental market tighter—with markets like Sydney and Perth with about one per cent vacancy—landlords are going to have to put rent up even further because they no longer get the benefit of negative gearing. If you're a mortgage holder, you've endured something like 15 interest rate rises—including three this past year and the very strong possibility of a fourth later this month—which means you're paying more in interest every month.
Even if you own your own home, you've seen the value of that asset, the most important asset that many families own, deteriorate remarkably. This is an issue of supply and demand. In Labor's policies, what they're doing is they are crimping supply and they're doing nothing to introduce demand.
The Liberals' approach is the opposite.