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Reserve Bank officials judged that Labor’s first-term housing agenda did little to improve supply and possibly raised prices, directly linking migration to affordability as Labor battles to prove the budget will increase the availability of homes.
Internal notes from the bank, which it initially sought to keep secret, described Labor’s first three years of housing policies as “relatively modest”. The documents obtained under freedom of information laws were prepared for a meeting of RBA board members in May last year, the same month as the federal election.
The bank documents show its policy experts were critical of policies such as Labor’s Help to Buy share equity initiative and an expansion of a scheme allowing people to buy a house with a 5 per cent deposit.
“In recent years, many policies that subsidise [first home buyers] – are just demand side measures, pull fwd purchases; many of the view this just translates into higher prices,” they wrote. “Being characterised as a demand side measures to bridge the gap until supply is online.”
Treasurer Jim Chalmers moved yesterday to counter doubts about whether scrapping investor concessions would boost supply, releasing an estimate suggesting that $25 billion that would have been spent on investments may be diverted to new houses, which can still be negatively geared.
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