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Home ownership matters

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With a new election on the horizon, HIA has compiled nine imperatives that will keep the incoming government on its toes. 

Kristin Brookfield

Deputy Managing Director
As 2021 ended, speculation about the date for the next federal election was effectively settled. An early Federal Budget called for March now sets the scene for a May 2022 election date.

Unlike many past elections, the lead into this year’s election sees new housing activity at a record level despite the vast array of headwinds that have occurred over the past two years. While this situation is attributable in no small part to the HomeBuilder and state grants, it also reflects the strength of our industry and our resilience to work through the challenges COVID-19 has delivered, particularly in 2021.

As COVID-19 reaches into 2022, Australians are still looking to build or renovate their home with a level of confidence that’s almost unsurpassed over the past three decades. Factors such as interest rates and migration will ultimately be the drivers of a change in demand in the years ahead. However until then, the policy settings in place nationally to support new home building and, most importantly, maintain strong levels of home ownership remain a priority for HIA. 

Under pressure

The management of the COVID-19 pandemic will clearly be on everyone’s mind. For businesses, the pressure is far from over with persistent staff shortages now biting businesses that had sustained the previous pressures of lockdowns and site restrictions. 

For housing and home building, the pandemic has reconfirmed the industry’s importance and value to the Australian economy. While HomeBuilder has set a strong foundation for positive sentiment, the unforeseen price rises due to global supply pressures and local labour constraints mean there may still be a downside for the industry and for home buyers. 

The impact HomeBuilder has had on land supply is also significant, bringing forward the meagre reserves across every state and territory. This leaves an immediate gap in supply that will take years to rectify. 

The reopening of the international border is another vital part of the recovery. Government population predictions show that Australia may never ‘make up’ the gap created from lost migrants. How this impacts housing demand and workforce levels will play out over the next four years.

HIA’s election imperatives 

HIA’s federal election imperatives highlight the importance of home ownership. The Association is seeking an incoming government to support policy and regulatory settings that recognise the importance of home building to the Australian economy.

1. Make housing supply a national priority 
Setting Australia on a path towards a meaningful and sustainable improvement in housing affordability remains a challenge. Meaningful reform requires a coordinated approach by all governments. National cabinet is reviewing a number of intergovernmental agreements that can target funding to outcomes that support housing supply and improve housing affordability.

2. Unlock land supply to support new housing 
Housing supply is fundamentally linked to land supply. The supply chain for residential land in Australia remains broken. The systemic issues within the zoning, subdivision and development processes across all states and territories means that it continues to take more than a decade to bring unzoned land to market as shovel-ready land. There also continues to be no reliable data at a national level to plan for Australia’s housing future. A national approach to land supply management is a priority.

3. Support home ownership
Increasing home prices continues to be a barrier to those trying to purchase a home, with the rate of home ownership in Australia declining, particularly among younger households. Saving a deposit that meets the requirements of lenders is the biggest barrier to those aspiring to buy their own home. The Australian government has shown in the past four years that they can play a direct role in supporting first-home buyers to achieve home ownership. However, more is needed. 

4. Increase access to rental housing
Rental vacancy rates remain very low across Australia, despite the halt to immigration over the past two years. As Australia reopens, pressure on rental affordability will increase. It’s critical there’s a focus on growing the supply of private rental housing. 

5. Grow the supply of social and community housing
Long-term underinvestment in social and community housing has persisted for decades. This has diminished the capacity of the sector to accommodate the demand that will continue to grow post-pandemic. Facilitating new investment to increase the supply of subsidised housing, both social and community, year on year, is essential to supporting Australia’s most vulnerable. 

6. A population strategy to build our future
Australia needs a strategy to navigate the population challenges post-COVID-19 and recognise our ongoing demographic challenges. Attracting skilled and productive young workers from overseas will be crucial in offsetting the impact of the pandemic and Australia’s ageing population. 

7. Maintain a stable industry workforce 
The shortage of skilled trade workers in the residential building industry is persistent. Prior to the pandemic, the number of students studying trade qualifications was in decline with high rates of attrition. The measures put in place to help apprentices retain employment in the past two years have worked. This alleviates a return to structural shortages of skilled trades. Here it’s critical that the current level of training activity and completions is maintained. 

8. Maintain the rights of independent contractors
In seeking to define ‘gig’ workers, there’s potential for more stringent regulations to impact on genuine independent contracting that’s the foundation of the residential building industry’s workforce. A streamlined, nationally consistent approach is overdue. It’s critical to make clear that genuine independent contracting is not the same as ‘gig’ work.

9. Reduce the burden on new housing
The excessive tax on new housing is an impediment to supply and affordability. Reducing the direct and indirect taxation of new housing can unlock more housing activity, leading to further economic benefits for all Australians. Residential building work is also one of the most regulated industries in Australia. Managing restrictions and risk during the pandemic has limited business capacity to manage other regulatory changes. Residential building businesses need time to recover and connect with the post-COVID-19 world.