John Alexander: “If you were to play Roger Federer you would lose every time; that’s what it’s like for the homebuyer against the investor.” Photo: supplied Investors have an enormous advantage over would-be homebuyers, John Alexander says. Photo: Arsineh Houspian
The Coalition backbencher who chaired the stalled inquiry into home ownership has appealed to Prime Minister Malcolm Turnbull to restart it, and says it will address the role of investors sitting on properties that should be going to owner-occupiers.
John Alexander is now chairing an inquiry into the potential for value-capture to fund large infrastructure projects such as high-speed rail.
He said the lapsed housing affordability inquiry – which considered 30 hours of evidence from organisations including the Treasury and Reserve Bank without reporting – should be taken over and finalised by his committee, because there was no point in using infrastructure such as fast trains to create new affordable housing if it was snapped up by investors.
“We have been told time and time again that supply is the answer,” he said. “But it’s no good creating cities in the southern highlands and outside of Goulburn and outside of Shepparton if the same game is played … where the investor will have an enormous advantage over the homebuyer and then dominate that market.
“If we can build a city near Goulburn using the increase in the value of the land to fund a very fast train that could get homeowners to Sydney in half an hour, we could create affordable housing, so long as we knew it wouldn’t be snapped up by investors.
“If you are going to have a complete suite of policies regarding home ownership, you’ve got to address your supply and you’ve got to address the opportunity of homebuyers.
“I feel owner-occupiers ought to be put in front of investors, but at the moment there is no restraint on how many [properties] investors can buy, which means they are dominating the market.”
Mr Alexander, a former professional tennis player, said would-be owner-occupiers competing against negative-gearers were like ordinary tennis players coming up against Roger Federer.
“If you were to play Roger Federer you would lose,” he said. “If you were to play him 1000 times, I promise you you would lose 1000 times, and that’s what it’s like for the homebuyer against the investor – it’s stacked against them.
“The current level of supply is being completely consumed by speculative opportunistic investors who are driving the volatility of the market.”
On Monday, Treasurer Scott Morrison told the Urban Development Institute the reason people were being locked out of the housing market was that supply couldn’t keep pace with demand.
“The government will therefore also be discussing with the states the potential to remove residential land use planning regulations that unnecessarily impede housing supply,” he said.
In evidence to Mr Alexander’s inquiry, Reserve Bank official Luci Ellis said investors were constraining supply, noting that “it is a truism that if an investor is buying a property an owner-occupier is not”.
Mr Alexander said he had made a formal request for his committee to take over and complete the home-ownership inquiry and that the Prime Minister was supportive.
The decision would have to be signed off by Mr Turnbull. There would be no need to take any further evidence and both reports could be completed by Christmas.
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This story Administrator ready to work first appeared on Nanjing Night Net.