Australians struggling with high rent could get some relief under a new push to boost the amount of affordable housing on offer.
Today Labor will lay out a ten-year plan to build 250,000 new homes across the country over the next decade, including 20,000 during its first term in government, should it win the election.
Bill Shorten will announce the policy during his speech to Labor’s National Conference this morning.
And it comes with an extra twist designed to help renters.
Mr Shorten will offer investors who build these new homes 15-year subsidies, totalling $8500 per year, provided they meet one condition — leasing the properties for 20 per cent below market rent.
The point is to help people on low and moderate incomes secure housing now, while simultaneously giving them more leeway to save for their own homes in the future.
“A hidden struggle in this country is being fought by the hundreds of thousands of our fellow Australians who can’t afford to live anywhere near where they work,” Mr Shorten will say.
“They’re spending over a third of their pay packet on rent, and plenty more on petrol each day they travel.
“Building more affordable housing is infrastructure policy. It is cities policy. It is jobs and productivity policy. And it is population policy.
“We are the party of home ownership, we are the party of affordable housing.
“We will be a government in the best of the Labor tradition: economic prosperity, social progress and a fair go for all.”
The median weekly rent at a national level is $429 per week, according to data from CoreLogic. That rises to $462 across Australia’s capital cities, with the highest median prices in Sydney ($583) and Canberra ($536).
Labor estimates a family paying the national average of $462 could save $92 a week thanks to its plan.
Overseas students, temporary foreign workers and other non-residents of Australia will not be eligible.
The Parliamentary Budget Office has costed the policy and says it will cost $102 million over the forward estimates, through to the 2021-22 financial year. It will cost $6.6 billion over the entire decade.
Mr Shorten’s plan is similar to the National Rental Affordability Scheme, a 10-year policy which started in 2008.
The NRAS also provided incentives for investors to rent their properties below the market rate, and attracted $12.9 billion in private investment over the last decade, delivering 37,000 affordable homes.
Some Australians also benefit from Commonwealth Rent Assistance, which helps 1.3 million people pay their rent.
But Labor says more needs to be done.
It points to research by the Australian Housing and Urban Research Institute estimating there is a shortfall of more than 525,000 affordable rental properties in Australia.
Mr Shorten has consistently attacked the government on affordable housing.
Should he win power, he has promised to limit negative gearing to newly built homes and halve the 50 per cent capital gains tax discount.
Labor argues the current government’s policies give investors an unfair advantage over first home buyers, and overwhelmingly benefit people with high incomes.
Prime Minister Scott Morrison has warned the opposition’s proposed changes could “take a sledgehammer” to the property market, which has already slowed over the last 18 months.
“If you abolish negative gearing as we know it then you’re inviting a housing market crash. And that’s good for nobody,” Mr Morrison said.
House prices have fallen a whopping 10 per cent in Sydney since their peak in 2017, according to CoreLogic.
They dropped 1.3 per cent in November, their biggest monthly fall in 14 years.
The data was almost as dramatic in Melbourne, where prices plummeted by 0.9 per cent.