Councils could be paid to release more land for new homes

BUILDERS have called on the Abbott government to pay councils incentives to help release more land so that owning a home does not become an "unaffordable dream".

The call came from Masters Builders, in a submission to a Senate inquiry looking at the issues driving a lack of affordable housing around the country.

During the inquiry this week, the committee heard the average price of a home had risen to six times what it was in 1986, while wages and inflation had not kept pace, increasing only 2.5 times.

Driving the lack of affordable housing, some witnesses said, was negative gearing policies and overinvestment by existing homeowners, preventing potential first-home buyers from getting into their own home.

But Master Builders Australia chief executive Wilhelm Harnisch said one of the key issues was land supply, and a need for a national commitment to develop more land for housing.

He said any "supply side reforms" should also provide extra funding for social housing to help lower-income families into their own home.

Mr Harnisch said the Abbott government and states also needed to renew previously abandoned commitments to a national housing affordability agenda.

The key body driving that agenda in recent years was the National Housing Supply Council, which Prime Minister Tony Abbott had abolished in November last year.

Masters Builders has proposed a 'national competition-style" payments system, where the Federal Government would pay incentives to councils to help release more land.

The housing lobby also called for new 10-year horizon plans to create a forward schedule across all local government areas, designating specific land for future housing development.