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Thursday, 2 December 1976

Mr HODGES (Petrie) -Today I want to concentrate my remarks on what I believe will be one of the gravest problems facing the housing of our people during the next 2 decades. The problem I identify is the lack of rental accommodation available, and the seriousness of the situation should not be underestimated. There has been an alarming fall-off in the numbers of units being constructed for rent in recent times and the reasons for this trend I intend to outline in more detail. Before doing so, though, I want to make it clear to the House that I am of the firm belief that home ownership should be the prime objective.

This Government stands for home ownership and has demonstrated its willingness to fulfil that objective by the reintroduction of the home savings grant scheme as a positive form of encouragement to first time home seekers. The seldom equalled stability of this nation is due in no small way to the large percentage of families who have acquired their own homes.

Home ownership has often been referred to as the 'great Australian dream'. It is a goal that has been achieved by a high percentage of our families and is a clear indication that Australians place a deal of emphasis on home ownership. The dream of home ownership has become a reality for countless thousands of Australian families. These people have really staked their claim and having done so have developed a greater sense of pride in their person, families, cities and towns, and nation. We as a Government will continue to engender this feeling in bur people by providing incentive and encouragement towards home ownership. Our children and our children's children will be infinitely better citizens if they are cared for and brought up in the atmosphere of a home that is the property of the family. Although our objectives remain firm, we must not adopt an ostrich approach of burying our heads in the sand for at the present time there are clear indications that it is the desire of more and more single people, young marrieds and elderly and retired peopleto live in rented premises.

Recently a comprehensive study in south-east Queensland titled Moreton Region Growth Strategy Investigations predicted that by the year 2000 the Moreton region would have a population of 1 800 000- an increase of 750 000-and that flat dwellers would rise from the present 12 per cent to an estimated 25 per cent. Last December a report titled Housing for Australia by a task force of the Australian Institute of Urban Studies found that failure of the rental market was one of the most urgent problems facing Australian housing.

Whether we like it or not there is a tendency toward greater mobility of our population and this may be the reason for the drift to voluntary renting. Young people especially have developed a lust for travel both within Australia and overseas and this may well be sapping the capital that was previously being directed towards home ownership.

Involuntary renters are being created by rapidly escalating building costs and high interest rates and the fact that local authority land development and building standard requirements are becoming more stringent. These factors are pushing costs higher and higher and putting home ownership out of reach of more people. The indications clearly show that whether they be voluntary or involuntary, renters are on the increase. Shelter must be provided and the rental accommodation component must be available to meet the demand. Rental accommodation falls into 2 basic categories, namely, public housing which is built and administered by State housing authorities and private housing. Both of these categories can be divided into rental homes and rental units or flats.

In the case of public housing there is an on going need for State authorities to ensure that the maximum benefit is obtained from the capital outlay. There are many instances of families of two and three people occupying 3-bedroom homes long after they could have moved into lesser accommodation, thereby freeing the larger premises for a bigger family. Rents frequently remain at too low a level and act as a disincentive for people whose financial position may have altered to such an extent as to warrant their vacating to make way for a more needy family. In these circumstances if disturbance appears warranted and is contemplated, I recognise the need to view each case on its merits. There will be instances where health, age or other factors may indicate that a particular family should remain undisturbed.

It is in the area of private housing for rental that my main concern lies. The increased demand will be met only if entrepreneurs can obtain a reasonable return on capital invested. At the present time, investors can expect a return in the vicinity of 8 per cent to 9 per cent which is inadequate when compared with returns from rented shops, building societies, bank fixed deposits and so on. Theinvestor may be prepared to accept the lower return if he knows there will be a substantial capital gain. If a large portion of the capital has to be borrowed at current high interest rates then servicing the loan will result in a much reduced capital gain. It is not surprising then to find that private other dwellings, which are principally flats and units for rental, showed a fall in the number of commencements during 1974- 75. In 1972-73 private other dwelling commencements in the private sector totalled 38 629. In 1973-74, this rose to 41 709 dwellings. We saw a fall in 1974-75 to 40 731 dwellings commenced. What is even more distressing is the fact that we had a dramatic fall in commencements in 1975- 76. Only 26 012 commencements occurred in that year.

Now that the problem has been indentified, how best can the difficulties be overcome? Firstly, I believe the Government should set the Indicative Planning Council the task of a more in-depth study of the problem. A maximum of up-to-date data should be available in order that the problem can be accurately assessed and then a plan evolved to ensure that private sector confidence returns to this part of the housing industry. The Australian Institute of Urban Studies is to be commended for its work in this area. It explores the problem in some depth and detail and its December 1975 report on housing for Australia is a document worthy of consideration by the Minister for Environment, Housing and Community Development (Mr Newman) and his Department. One recommendation of this report deals with specific pro-investment policies and suggests that private investment in rental housing should be encouraged by providing an investment allowance or depreciation allowance for income tax purposes. Until the yield on this sort of investment is improved, entrepreneurs will be lacking.

The position is becoming quite critical and some action must be instigated to alleviate it otherwise thousands of Australians will be without decent shelter. It is well recognised that when supply is low and demand increasing, the consumer pays more. As rental accommodation becomes scarcer, rents will rise and only those who are better placed financially will be able to afford to rent. What then happens to the low income earners- the pensioners and disadvantaged groups? It is obvious they will have nowhere to go. It should be remembered and emphasised that the decline in availability of rental accommodation occurred under the Whitlam Labor Administration. From the figures that I have quoted, it is quite obvious that this decline occurred a little longer than 2 years ago. I trust that that Minister for Environment, Housing and Community Development and his Department will have a serious look at this matter of the lack of rental accommodation.

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