Page 2802 - Week 09 - Thursday, 27 September 2007
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workers. Through the affordable house and land packages we will put a strong emphasis on developing the skills of our apprentices and trainees. For those who travel from interstate to work on these new homes we will provide better affordable accommodation options, with a new two or three-star motel and a five-star caravan park.
Lastly, this plan takes account of another of the pressing issues of our time and policy priorities for the government, including climate change. We do not want to add greatly to the cost of home ownership or construction, but we will be paying close attention to sustainable design in our quest to deliver affordable housing.
Some commentators continue to assert that ACT government taxes have a significant effect on housing affordability. I dispute that assertion and would make some comments. A recent report commissioned by the Property Council of Australia showed that ACT government taxes account for only 5.1 per cent of the cost of purchase of a house and land package. Moreover, of the 13 residential growth markets considered by the property council report, Canberra has the third lowest state and local taxes as a proportion of the purchase price of a house and land package, with only Adelaide and Mandurah, which is 74 kilometres south of Perth, ranked lower.
I note that the only ACT government tax directly associated with the purchase of housing for owner occupiers is stamp duty on conveyancing, and the duty payable is only a small proportion of the price of a given residential property. For example, on a $400,000 house, the duty payable is $15,000 or 3.8 per cent of the purchase price. This compares with the interest cost on the associated standard housing loan of around $26,000 in the first year alone.
Moreover, while duty is a one-off payment, interest costs continue to be incurred over the life of a loan. For a 30-year loan, the interest cost would amount to over $300,000 in present value terms. It is also important to note that the long-term real growth in house prices of around four per cent means that the increase in a home buyer’s wealth will exceed the cost of conveyancing duty within the first year of home ownership.
The government’s affordable housing action plan is bold, innovative and far-reaching and we have hit the ground running. We have accepted all the recommendations of the steering group and have moved rapidly to their implementation. We have made significant strides. At the launch of the action plan I asked for patience on the part of those who desire rapid change. It is understandable that people are keen to immediately obtain cheaper land or acquire the new affordable housing land packages and other new products. However, we are not about a quick fix, but rather a fundamental change to the system.
An enormous amount of work is underway, but the government alone cannot tackle the issue of housing affordability. I welcome the support of industry, the not-for-profit sector and the community generally in working collaboratively to improve housing affordability.
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