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Migration cut not housing answer: industry

The housing industry has backed a new report into housing affordability calling for more supply but has cautioned against a cut in the migration intake to solve the problem.

The Grattan Institute think-tank report criticises governments over the past two decades for creating a housing mess by taking easy options rather than addressing the real problem of supply.

It describes the politics of real housing reform as "poisonous" but warns young, low-income families are the big losers when it comes to buying a home.

"It's bad. It's getting worse," the institute's chief executive John Daley told AAP, summing up the outlook for housing if nothing is done.

The report says boosting housing supply by a further 50,000 a year over the next decade would have the biggest impact on affordability.

But it also cites "tapping the brakes" on immigration as a last resort if the states are not prepared to reform their planning systems, however, stresses it is not the preferred option.

Housing Industry Association managing director Shane Goodwin warned houses will not get built if the population doesn't grow.

"The main driver of population growth in Australia is migration," Mr Goodwin said in a statement.

However former prime minister Tony Abbott has called for a cut to the migration intake.

"The best thing we can do, I think at the federal level, is scale-back the rate of immigration, not forever, but certainly until infrastructure, housing starts ... catch up," Mr Abbott told 2GB radio on Monday.

Mr Daley says limiting negative gearing and reducing capital gains tax will help in the short term, but won't help nearly as much as getting housing supply right.

"If you got rid of capital gains tax and negative gearing you might have some money to bribe the states with," Mr Daley said.

Treasurer Scott Morrison says the institute gives the game away when it admits that "abolishing" negative gearing and halving the capital gains discount are primarily about raising taxes, not housing affordability.

"Labor also seek to dress up their blatant tax grabs as being about housing affordability. It's just another con," Mr Morrison told AAP.

Labor hit back, saying there are serious ramifications of not dealing with housing affordability, far removed from the "mission accomplished" attitude of the Turnbull government.

Shadow treasurer Chris Bowen said Mr Morrison is engaged in a ridiculous scare campaign over negative gearing, saying if he was serious about housing affordability he would look at some of the institution's recommendations, such as a national housing supply council.

NSW Premier Gladys Berejiklian said her government's stamp duty concessions have had a positive impact getting people into the housing market.

"We know the challenges are still there but, as a government, the policies we have put in place are having a wonderful outcome," she said.

But Mr Daley says you don't increase supply by giving people more money.

"You increase supply by freeing up planning," he said.

Topics: Approvals

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