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Wednesday, 28 February 2018
Page: 2409


Mr LEESER (Berowra) (17:29): The National Housing Finance and Investment Corporation Bill 2018 establishes a new independent corporate Commonwealth entity which will strengthen efforts to improve housing outcomes for Australians. The National Housing Finance and Investment Corporation will be a financial intermediary with broad functions to enable it to administer an affordable housing bond aggregator and the $1 billion National Housing Infrastructure Facility. The affordable housing bond aggregator will improve the efficiency of financing for community housing providers, enabling them to strengthen housing outcomes. It works by providing cheaper and longer term finance for community housing providers by aggregating their borrowing requirements and issuing bonds into the market at a lower cost than the traditional big banks would. It will operate in a similar fashion to the British bond aggregator, The Housing Finance Corporation, which has helped administer five billion pounds in loans to housing associations.

The $1 billion National Housing Infrastructure Facility will help increase the stock and accelerate the supply of housing. It will do so by recognising the importance of early investment in speeding up supply and complementing private sector and state and local government investment. The National Housing Finance and Investment Corporation will be established as a Commonwealth entity governed by an independent skills based part-time board. The board will comprise experts from a range of fields to ensure decisions are robust, responsible and rigorously assessed. The independence of the board in financing affordable housing projects will be paramount. The government will not be able to direct it to make or reject specific investments. The bill includes a government guarantee of all the corporation's liabilities to support market confidence in its housing investments. This legislative guarantee will drive the best price outcome for community housing providers and provide certainty for investors.

This bill today is the result of significant ongoing work and consultation, reflected by the supportive stakeholder feedback. I congratulate the assistant minister for his efforts. Compass Housing Services declared:

Compass strongly supports the NHIC and its potential to address infrastructure bottlenecks that impede development of additional housing.

PowerHousing Australia credits this bill as:

… a positive step to delivering greater numbers of affordable housing dwellings to low to moderate income earners.

When government consults widely as part of a comprehensive, careful and calibrated plan, the end result is legislation enjoying broader support from the sector and its stakeholders. The creation of the NHFIC is fundamentally good news for the housing market in Australia. We're speeding up the supply of new housing through the provision of loans, grants and cheaper longer term finance to registered community housing providers.

This legislation delivers on a key element of the government's comprehensive housing affordability plan to improve housing outcomes for all Australians. The Turnbull government is committed to ensuring all Australians have access to secure, stable and affordable housing. Australia is one of the great home owning democracies of the world. Purchasing your own home is at the heart of the Australian dream; we want that opportunity to continue, and we want to make it as achievable as possible. In my electorate of Berowra in the northern suburbs of Sydney the cost of housing is a source of frustration and stress for many young families trying to break into the market. It's also of great concern to older parents keen to see their children and grandchildren secure their own homes. My electorate encompasses a diverse range of suburbs, but they share a common experience of rapidly rising housing prices in the last five years or so.

For example, Pennant Hills and Hornsby are two commercial and suburban centres in the area. Both are 25 to 30 kilometres, or a 45-minute train trip, from the CBD. Traditionally both suburbs have been home to young families starting out, buying or building their first home, raising their children and getting involved in the local community. In the last six years the median house price in both suburbs has effectively doubled. In Pennant Hills the median house price currently sits at $1.57 million; properties in Hornsby attract $1.28 million on average. Galston is a quiet, semirural suburb 20 minutes from the centre of Hornsby and 40 kilometres from the CBD. By car it takes an hour in light traffic and costs $14.43 in tolls one way. The fastest journey by public transport—bus—is around one hour and 20 minutes, although there are other, slower options. Due to Sydney's transport difficulties, some days it can take hours to get into the city. Median house prices in Galston have risen nine per cent since 2011, with a median property today selling for $1.22 million. Finally, in Cherrybrook, a popular family suburb in my electorate 30 kilometres from the city, house prices there have jumped 106 per cent in just six years to an average $1.53 million.

Young families want to take advantage of the opportunities by living in these beautiful thriving areas close to where they grew up themselves, close to their families, friends and communities, close to their church groups and schools and sports clubs yet the feedback I'm given is that this dramatic price growth is putting them under considerable and unsustainable pressure. It is not uncommon for my constituents to be carrying mortgages in the high six-figures or close to $1 million simply to provide a home for their families. In Berowra, 41.7 per cent of dwellings are owned with a mortgage, well above the state and national average.

I hear all too often about the impact of mortgage stress on families. The cost of servicing these large mortgages combined with paying very high road tolls—my constituents are the most tolled people in Sydney—the cost of child care and the rising cost of living means many people are feeling the pinch. In pursuit of the great Australian dream, my constituents work hard to provide for their loved ones. Doing so requires considerable sacrifice. Nearly half of all working people in Berowra, 47.1 per cent, work more than 40 hours a week and that is three per cent above the state average and four per cent above the national average. In addition, many travel over an hour each day each way to work. It is clear my constituents are working harder and longer to save for or pay off their homes. When they come home from work and look at their children, many of them question how their kids will be able to afford property in Sydney when they grow up. It is these issues that I hear about time and again from my constituents and it is why I support this bill.

There is no one silver bullet to housing affordability; however, the government's reducing pressure on housing affordability plan helps us strive towards the goal of providing opportunity and accessibility for first home buyers, and security and stability for homeowners. We have a dual responsibility to represent the best interests of both purchasers and owners because housing is so critical to the social and economic wellbeing of Australians and the economy as a whole. Unlike Labor, who will take a tax sledgehammer to the market through the removal of negative gearing and a 50 per cent increase in capital gains tax, we recognise the sensitivities of the sector to the economy and the importance of a responsible approach.

The NHFIC bill is part of the coalition's package of measures to address housing affordability. While we rightly look forward to the benefits of the bill, the government can also take pride in the benefits delivered from the implementation of is housing affordability plan so far. In 2015, the coalition committed to cracking down on foreign investment, including fees to acquire real estate and tougher penalties for investors who break the rules. We are upholding strict standards to ensure foreigners are not allowed to buy existing homes. Since coming to government, we have enforced the sale of illegally purchased properties worth more than $100 million compared to Labor who did not sell a single illegal property while in power. We make no apologies for our tough stance. Foreign investment in housing should never be at the expense of the Australian dream.

In early 2017, the Australian Prudential Regulatory Authority introduced lending restrictions on banks to discourage riskier forms of lending to pay for what were, in some cases, overheated property prices. Led by the Treasurer, this government warned the regulators that they needed to crack down harder on high-risk loans. It required banks to limit the flow of new interest-only lending to 30 per cent of the total residential mortgages. The clampdown on interest-only lending had the desired effect, cooling overheated elements of the investor market with interest-only diving 44.8 per cent during the September quarter. This has helped take the heat out of risky investments in the housing market and suppress runaway growth in housing prices.

Whereas growth in Sydney at the start of last year was running on average at over 15 per cent, it's now down to a more accessible five per cent but that's still five per cent off a very high base. Fewer international investors participating in the market provides greater opportunities for first home buyers to get their foot in the door and this has been confirmed by the latest data from the Australian Bureau of Statistics. The number of loans to first home buyers hit a five-year high in November, making up 18 per cent of overall owner-occupier home loans. Concurrently, loans to property investors in November recorded an 8.3 per cent fall year on year. This latest data is promising. But changes to macro prudential rules are not the only measure currently making a real difference.

In December, the Turnbull government legislated the First Home Super Saver Scheme, despite rampant resistance from Labor. This scheme is giving young people a leg up in the housing market through a tax cut which will allow them to save for a deposit inside their superannuation. First home buyers can contribute up to $30,000 into their superannuation, which they can then draw upon at a generous concessional tax rate for the purchase of their first home. For a young couple this means a combined contribution of up to $60,000. This will allow most first home buyers to accelerate their savings by at least 30 per cent. The impact of this supercharged boost to their deposit saving should not be underestimated. We've empowered first home buyers to take control of their financial future through less tax and a savings scheme that rewards their ongoing strides to home ownership. Labor didn't support this approach. They refused to help first home buyers save a deposit, and they refused to recognise the benefits of supercharged savings for young Australians. Labor argued that the scheme would damage the superannuation system, refusing to put faith in the ability of individuals to know what's best for themselves. This government takes a different view. We believe in all Australians. We believe in their ability to salary sacrifice and save in a smart manner so they can achieve that Australian dream, the goal of home ownership.

The impact of these measures cannot be anywhere near as meaningful if supply isn't similarly addressed. That's why in December last year we legislated important incentives for older Australians to downsize from their family home. From 1 July this year, Australians aged 65 will be able to consider the financial rewards of downsizing. When they sell property they have owned for at least 10 years downsizers will be able to contribute up to $300,000 from the proceeds into their superannuation accounts above and over existing contribution restrictions. In the case of a couple, both can take advantage and collectively contribute $600,000 from a sale into super. This is a fantastic piece of news for older Australians looking for a way to strengthen their super savings and make the next move in their lives. Constituents have already contacted me advising that they will be taking advantage of this measure.

This government has a record of delivering solutions to the sector, but we know it's a complicated issue and the federal government alone cannot transform the market. So I'm always encouraged and pleased to advocate on behalf of the people of Berowra who are taking steps to contribute to the process, people like Peter Coyle from Mt Colah, who heads up Absolute Shipping and Modular Homes. Peter recently came to parliament to discuss his proposal to provide high-quality housing through the use of shipping container materials. Peter's company prides itself on its fast completion times, high standards and fair pricing, offering the kind of creative proposals we need in the market. Its modular homes can be ready to move into in 90 days, with a cost to government of about one-third of the current cost of public housing. Peter's company is Australian owned and run and offers innovative designs to its diverse clientele. I applaud my constituent Peter Coyle for his work.

Also actively looking at solutions to a tight housing market is Russell Garnett from Urban Revolutions, a company building 26 affordable microvillas in the Hills district. Russell's approach recognises that housing affordability is an issue that affects all corners of our community, not just families with children. From those affected by family breakdown to young people who are leaving their home for the first time, it's essential we look for ways to ensure affordable and quality housing for all Australians. Russell hopes that choosing the option of a high-quality microvilla might allow low- and middle-income workers to save for a deposit in three to four years instead of the average 11 to 12 years. Russell's efficient approach relies on creative design paired with community vision, building new developments that incorporate a range of shared community spaces along with a smaller apartment. In providing affordable but attractive housing options, Urban Revolutions offers more opportunities for aspiring homeowners to enter the market, regardless of their family size or structure.

I'm proud to be part of a government that is addressing affordability for my constituents. As the government aims to address affordability for the people of Australia, I'm determined to see the people of Berowra benefit too. My constituents work hard to bring up their families, and I want them to know I'm working hard for them here. We often discuss the problems associated with the housing market through the lens of simply providing a roof over one's head. For many in Berowra the access to and affordability of good housing is a lot more than that. Sir Robert Menzies said that a home gave people a stake in the country, and he meant this in terms of homes material, homes human and homes spiritual. We don't just want Australians to have houses, we want them to have good homes—places of family and familiarity. That's the Australian dream. It's why I'm so pleased at the outcomes already being achieved by the government. Fairfax's Domain publication just last month reported that the amount of time first home buyers spend looking for a property has dropped from between 60 and 90 days to between 30 and 40 days. ANZ research reveals that since July 2017 the number of monthly first home buyer approvals has risen more than 60 per cent in New South Wales and 50 per cent in Victoria. The coalition is ensuring the Australian dream is still achievable. I commend the bill to the House.