Home starts falling, industry calls for reform on supply

THE housing industry has called for the federal government to focus on supply and reform, but rejected any changes to negative gearing.

The Housing Industry Association released an annual report on the housing market yesterday.

It argued that despite the industry making an "outstanding contribution to the economy", the Commonwealth needed to get involved in reform of housing supply.

While Labor's policy aims to increase housing supply by abolishing negative gearing on established homes - incentivising investment in new homes - the HIA rejected any such changes.

HIA chief economist Dr Harley Dale said tinkering with negative gearing and capital gains tax did not represent real reform.

Despite the HIA report showing dwelling starts were forecast to fall from 220,000 last year to 160,000 in 2017-18, the industry remained opposed to Labor's policy.

While the Coalition has considered changes to both negative gearing and capital gains tax, backbench warnings about such changes, and a concerted campaign from property interests has quelled enthusiasm within the Coalition for any such reforms.

Prime Minister Malcolm Turnbull has also repeatedly used Labor's policy as a vehicle to attack the Opposition - seeing it as a potent issue to be capitalised on during the coming election campaign.



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