As Interest rates stay the same, the real story of housing affordability is tax
Today’s interest rate decision is a sigh of relief for people with a mortgage, but doesn’t help those striving to buy a home.
Interest rates are only part of the picture when it comes to making housing more affordable.
Mortgage repayments are a function of interest rates and how much people have to borrow. The fact is that people are having to borrow more just to get into the housing market. Consequently, we need to look at the structural problems that drive up house prices.
The tax system is one of the underlying factors influencing housing affordability in Australia. Tax deductibility for housing investors, capital gains tax discounts, stamp duty and the absence of a broad based land tax all need to be addressed in order to have a better functioning housing system.
Until we implement a range of measures that actually reduce people’s housing stress and make housing more affordable, we will continue to see people under pressure across the housing spectrum.
The RBA’s decision to keep interest rates stable is like greasing just one cog in an entire engine that needs re-oiling. We have to make sure we are addressing the real issues that will help people to make their dream of home ownership an achievable and less stressful reality.
Campaign Manager, Australians for Affordable Housing
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