Australia Shifts Toward Public Transport Boost Under Turnbullby
Road-rail infrastructure to aid housing developments: Taylor
Sydney home values climbed 70% since 2007; Melbourne up 50%
Prime Minister Malcolm Turnbull’s government wants to boost funding for road and rail public transport infrastructure on the fringes of Australia’s major cities as a lure for housing-development projects.
“Land prices in the outer suburbs of Sydney or Melbourne are sufficiently high and have accelerated enough over recent years to be able to support funding of major transport infrastructure projects,” Assistant Minister for Cities Angus Taylor said in a Sky Television interview Sunday. “If we’re to make major investments in transport infrastructure, it’s right and proper that we can have an expectation that there are major new housing developments” in those areas, he said.
Surging home prices have pushed more Australian families to the fringes of sprawling cities like Sydney and Melbourne, where public transport is often substandard and roads frequently gridlocked. Turnbull, sometimes seen on trains while traveling to engagements, is signaling a move away from the infrastructure-funding policies of predecessor Tony Abbott, who ruled out federal funds for urban commuter rail projects, saying they were the responsibility of state governments.
Turnbull’s Liberal-National coalition government is due to release its annual budget on May 3 before holding an election that Turnbull has said is “highly likely” to be July 2.
Housing affordability is looming as a major battleground at the election, with the opposition Labor party arguing tax perks for landlords have made buying a home an unattainable dream for many younger Australians. Sydney home values have climbed about 70 percent since the end of 2007, while in Melbourne they have risen about 50 percent, data from the statistics bureau show.
About 1.2 million Australians use so-called negative gearing, where they reduce their tax bill by deducting the costs of owning a rental property, including mortgage interest payments, from their taxable income.
Labor wants to disallow negative gearing for existing homes, which accounted for 93 percent of the A$155 billion ($116 billion) of property investment last year. It argues it would spur new home construction and allow more first-home buyers to enter the market.
Turnbull’s government, which leads in most opinion polls, labels that policy as flawed as it says Labor is attempting to solve the problem of housing affordability through reducing demand.
“There has been an under-investment in housing in the country,” Taylor said. “The fundamental problem with housing affordability is not demand, it’s supply.”
Home values across the largest cities in the country expanded 0.2 percent in the December quarter, according to the data. The total value of Australia’s 9.6 million residential dwellings increased A$31.6 billion to A$5.9 trillion, the data show.