Another side to the home ownership debate

Bernard Kellerman
A review of many of the 40-plus submissions to the Inquiry into Home Ownership being run by the House of Representatives Standing Committee on Economics has revealed an inventive streak among some of the individuals and organisations who contributed to the debate - in contrast to the many and varied vested interests who just seem to change the introduction from one inquiry to the next.

One piece came from the Business Council of Co-operatives and Mutuals which, while acknowledging other suggestions, asserted its approach represented co-operative and mutual models of enterprise in Australia. In its submission, the BCCM suggested, not unexpectedly, "that it is a co-operative approach to social housing that addresses not only the physical needs of people experiencing housing stress, but also their economic and social needs."

The "self-help co-operative housing model" addresses the shortcomings of the welfare housing model by recognising that the majority of low income people, once offered decent affordable accommodation are willing to contribute to make sure their housing is well maintained and managed, the BCCM submitted.

The contribution of 'sweat equity' to housing affordability is also considerable. Tenant members review applicants for vacancies, sign off on tenancy agreements with new tenants, show properties to prospective tenants, co-ordinate cyclical and responsive maintenance, maintain the presentation of gardens and common areas, maintain records and produce reports.

The BCCM cited bankmecu, an Australian cooperative bank that it described as a leader in the sector. bankmecu has identified affordable housing as a critical issue for customers/members. As a member owned bank, they have responded by providing considerable support to improve housing affordability for low income people.

The bank has provided over A$100m to the community housing sector to increase the supply of low cost homes.

The Affordable Housing Party of Australia recognised that the level of home ownership in Australian has remained constant at about 70 per cent for the last three decades. However, examination of Australian Bureau of Statistics shows that many more households now have a mortgage.

In 1996 40 per cent of home owners were mortgage free and 30 per cent of home owners had a mortgage. By 2010 the situation had reversed, with more owners having a mortgage than not. Hence, the increased risk of mortgage stress if interest rates were to rise.

Another anti-lobbyist who made a series of big ticket suggestions was a buying agent, Christopher Curtis, who opened with: "In our view, it borders on the astonishing that housing policy and interest rate settings are so heavily influenced by and in some cases based upon, data selectively provided by industry sources having a vested interest in conveying the impression of a consistently buoyant market."

After railing against the various vested interests lined up to spruik the industry and the  "obsession with the drama of auctions and their clearance rates", Curtis went on to claim that the market was skewed in favour of sellers and their agents.

He called for the idea, abandoned in 2009, of making real estate agents as well as lawyers, conveyancers and accountants subject to the provisions of the Commonwealth Anti Money Laundering and Counter Terrorism Financing Act to be revisited.

"In that event, the required information should be extended to include the residential status of the purchaser(s) and source(s) of purchase funds," he concluded.