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In undertaking the inquiry, the Commission is to invite public submissions, consult with key interest groups and affected parties, issue a draft report, and produce a final report of its findings by 31 March 2004. PETER COSTELLO [Reference received 4 August 2003] VI DECLARATION OF INTERESTS
Contents Terms of reference Contents Abbreviations Key findings Overview V VII X XII XIII 1 About the inquiry 1 1.1 What has the Commission been asked to do? 1 1.2 How has the Commission approached its task? 2 1.3 Guide to the report 11 2 Are recent price and affordability trends unusual? 13 2.1 A snapshot of housing in Australia 14 2.2 How much have house prices risen? 15 2.3 What has happened to housing ‘affordability’? 25 2.4 Concluding remarks 39 3 The role of cheaper and more accessible finance 41 3.1 How much cheaper is housing finance? 42 3.2 How has the availability of housing finance improved? 46 3.3 Effects on housing demand and prices 49 3.4 Some policy issues 54 4 What role for other demand-side forces? 59 4.1 Economic growth 60 4.2 Population and other demographic changes 61 4.3 Grants to first home buyers 71 CONTENTS VII
Page 1 and 2: First Home Ownership Productivity C
Page 3 and 4: 31 March 2004 Melbourne Office Leve
Page 5: Terms of reference PRODUCTIVITY COM
Page 9 and 10: A Public consultation 233 A.1 Submi
Page 11 and 12: IGA IMF IPART LVR MBA NAHP NCOSS OE
Page 13 and 14: Overview Owning a home is of fundam
Page 15 and 16: Figure 1 Real house price growth in
Page 17 and 18: Why have prices risen so fast? A st
Page 19 and 20: Figure 4 Housing finance commitment
Page 21 and 22: Figure 5 New finance commitments fo
Page 23 and 24: • The apparent overshooting in th
Page 25 and 26: It needs to be emphasised that thes
Page 27 and 28: The overwhelming view put to this i
Page 29 and 30: Are infrastructure charges too high
Page 31 and 32: Authorities and utilities imposing
Page 33: ‘Lifeline’ assistance designed
Page 36 and 37: 1.2 How has the Commission approach
Page 38 and 39: The implication is that the communi
Page 40 and 41: Box 1.2 Some distinctive features o
Page 42 and 43: Hence, in looking at how to improve
Page 44 and 45: asis, while others took the form of
Page 46 and 47: - looks at the extent to which high
Page 48 and 49: As noted in chapter 1, house prices
Page 50 and 51: of the housing market in Australia
Page 52 and 53: Over the past few decades, there al
Page 54 and 55: First and foremost, it has been mor
Page 56 and 57:
Notably, there has been a large inc
Page 58 and 59:
The reasons underlying the surge in
Page 60 and 61:
discussions of trends in affordabil
Page 62 and 63:
Figure 2.7 The BIS Shrapnel home lo
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Figure 2.9 First home buyer deposit
Page 66 and 67:
• Similarly, the use of Australia
Page 68 and 69:
2001 could simply be due to the age
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that, since 1994, the maximum share
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characterised the Australian experi
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That in turn suggests that in seeki
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However, there is no mechanistic re
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Figure 3.2 Real yields on indexed l
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Moreover, while investors in all ty
Page 82 and 83:
Box 3.1 Some other recent home loan
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the lower end of the debt-to-income
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the late 1990s, and declining renta
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3.4 Some policy issues Cheaper and
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• whether to implement proposed i
Page 92 and 93:
In the Commission’s view, some re
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4.1 Economic growth Over the last d
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Box 4.1 Coverage of resident popula
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Figure 4.2 Net immigration to Austr
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Box 4.3 Location and housing arrang
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Table 4.1 Average annual population
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Impact of population and household
Page 106 and 107:
Figure 4.4 Loan approvals to first
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5 The role of taxation Findings •
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This latter item effectively repres
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operation of the ‘margin scheme
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Table 5.1 Stamp duty payable on the
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Other taxes A number of other taxes
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housing in each country compare wit
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property (as a benefit or cost), wi
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Moreover, over time, any tax impost
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In general, provided nominal house
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as rising incomes have pushed more
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increasingly capitalised into the p
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people may decide to stay in their
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eliance on these taxes [payroll tax
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ate structures, and provisions for
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esponded that ‘it is unclear that
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Taxes on taxes, multiple taxation a
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Although no-one specifically sugges
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occupiers, would be required to est
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Moreover, seeking to achieve greate
Page 147 and 148:
The combined effect of a number of
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depends on a range of factors — n
Page 151 and 152:
Are there distortions in individual
Page 153 and 154:
Several participants endorsed the n
Page 155:
In the interim, making housing-spec
Page 158 and 159:
The recent increase in house prices
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increased by more than 100 per cent
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Figure 6.4 Trends in ‘greenfield
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increases being in suburbs close to
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which expected housing demand is li
Page 168 and 169:
Box 6.2 The Melbourne 2030 urban gr
Page 170 and 171:
Strategic planning and controls on
Page 172 and 173:
6.3 Planning approvals From a price
Page 174 and 175:
Perceived problems Planning approva
Page 176 and 177:
Figure 6.5 Architects’ assessment
Page 178 and 179:
The lack of experienced staff has b
Page 180 and 181:
potential new residents against the
Page 182 and 183:
Governance In discussions with the
Page 184 and 185:
develop specific options for addres
Page 186 and 187:
Box 6.7 The Development Assessment
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The extent to which processes can b
Page 190 and 191:
Australians today expect to have a
Page 192 and 193:
Box 7.1 Types of infrastructure •
Page 194 and 195:
Table 7.1 Case studies of developer
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Box 7.2 NSW section 94 levies Secti
Page 198 and 199:
The incidence of developer charges
Page 200 and 201:
• residents of developments effec
Page 202 and 203:
infrastructure are subject to regul
Page 204 and 205:
development — where land is not d
Page 206 and 207:
Box 7.5 Regulation of utilities’
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efficient and equitable upfront cha
Page 210 and 211:
finance the costs of providing such
Page 213 and 214:
8 Are industry performance and buil
Page 215 and 216:
Overall, the evidence available to
Page 217 and 218:
In terms of productivity, at least
Page 219 and 220:
CFMEU, in claiming that the analyti
Page 221 and 222:
Skill shortages in the residential
Page 223 and 224:
unnecessarily to costs. While time
Page 225 and 226:
In illustrating the effects of such
Page 227 and 228:
9 Have prices ‘overshot’? Findi
Page 229 and 230:
structural change if low inflation
Page 231 and 232:
long-term averages in most of Austr
Page 233 and 234:
Whichever way additional holding co
Page 235:
could help to narrow, though probab
Page 238 and 239:
Accordingly, this chapter examines
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10.2 Rationales for direct assistan
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• growing affordability problems
Page 244 and 245:
Further, several participants calle
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supply. However, they should be pur
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Demand-side or supply-side? Measure
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GST can be justified. Importantly,
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course, targeting raises some impor
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main monetary resource available to
Page 256 and 257:
own savings and increase their cons
Page 258 and 259:
Such shared-equity arrangements are
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Keystart and similar programs A num
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Also, to the extent that the curren
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APPENDIXES
Page 268 and 269:
Participant Submission number Brisb
Page 270 and 271:
Participant Submission number Langf
Page 272 and 273:
Participant Submission number Taylo
Page 274 and 275:
South Australia Department of Treas
Page 277 and 278:
B Who are the first home buyers? In
Page 279 and 280:
While single-parent households acco
Page 281 and 282:
Table B.5 Housing costs of first ho
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and Melbourne, the median price pai
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B.6 Location The geographic distrib
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Figure B.4 Per cent 100 90 80 70 60
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B.7 Dwelling characteristics Detach
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Bernardi, F. and Poggio, T. 2002, H
Page 294 and 295:
French Ministry of Finance and Indu
Page 296 and 297:
—— 2002a, Revenue Statistics: 1
Page 298 and 299:
The Treasury 2003, Preliminary Asse
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