Renting will increasingly become a way of life for Sydneysiders as rates of home ownership fall to similar levels as New York and London, according to a Liberal MP who lives near Canberra.
“We can’t keep thinking that in an international city – with all of its associated expenses and population pressures – that you can expect to have the same level of owner occupiers as in other cities,” Peter Hendy will tell Federal Parliament on Tuesday.
About 65 per cent of Sydneysiders own their home, just below the national rate of 67 per cent. In London, only about half of inhabitants live in a house they own, according to Dr Hendy, an economist who started out as a cadet with Treasury. He has a doctorate in government studies.
In New York the owner-occupier rate is 32.2 per cent, for Los Angeles it’s 49 per cent, Paris less than 30 per cert and Tokyo 44.6 per cent.
“Australian lawmakers cannot ignore this fact of life,” Dr Hendy will say. “The Sydney levels of owner occupation will probably fall to match those of other international cities.”
Dr Hendy, whose seat of Eden-Monaro sits just outside Canberra and includes towns like Bateman’s Bay and Bega, will cite the figures while warning that Labor plans to get rid of negative gearing, which would harm investment.
Reserve Bank governor Glen Stevens last week described the Sydney property market as “crazy”.
And despite Treasury secretary John Fraser saying Sydney is showing “unequivocal” signs of a housing bubble, the Abbott government insists there is no bubble.
Dr Hendy will say what is truly ‘crazy’ is the attack on negative gearing and capital gains tax by Labor and the Greens.
“For short-term expediency they are justifying their tax grab as some sort of solution to a so-called housing bubble in Sydney,” he will say.
“Let’s be clear, we should not be setting our taxation system simply based on the property market in Sydney. The solution to Sydney’s housing issues are not taxation measures designed to impact on the demand side of the equation.”
A Grattan Institute report in late 2013 said policymakers should think about greater security for renters, such as longer minimum lease periods and notice periods before lease termination.
“In 2004, Ireland moved from arrangements similar to Australia’s towards improving security of tenure for renters,” it said.
“The standard lease moved from six to 12 months to a legally prescribed four years, though landlords and tenants can terminate a lease in the first six months with 28 days’ notice.”
SOURCE: The Australian Financial Review PUBLISHED: 15 June 2015
WRITTEN: Johanna Mather
@Jurds Real Estate – Cessnock and Hunter Valley Wine Country Property Experts – the place to buy, sell and lease property in Cessnock and the Hunter Region.