As the federal budget approaches, Australians are weary of the pre-budget leaks and speculation, but the housing crisis remains a central concern. Despite anticipated changes to capital gains tax and negative gearing, experts warn that tinkering with the tax system will not solve the underlying issue of housing supply.
New dwelling approvals fell by 10.5 per cent in March, and the war in the Middle East is disrupting supply chains for essential construction materials like PVC and asphalt. Asphalt prices have spiked by 50 per cent, leading builders and developers to warn of project delays and further insolvencies, putting the government's target of building 1.2 million homes at risk.
Baby Boomers are often blamed for the housing crisis due to their dominance in the rental market, with over-60s holding an estimated 27 per cent of investment properties. However, this age group has also seen a 62 per cent increase in homelessness over the past 15 years, with older women particularly vulnerable. Boomers face stiff competition from younger renters and have little chance of increasing their income to cover rent hikes.
The housing crisis will not end with the budget, as supply chain disruptions threaten to worsen the situation. While it is easy to blame a single generation, the real culprit may be the lack of housing supply exacerbated by global events.
