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{{propApi.successMessage}} {{region}} Change locationThe RBA has gone too far
The RBA has gone too far
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The ABS released the Lending to Households and Businesses data for June 2023 today, as well as the same month’s building approvals data for detached houses and multi-units covering all states and territories.
“When the RBA first increased the cash rate there was a record volume of houses under construction, and a record volume of new houses approved, but not commenced. This large volume of work in the pipeline has obscured the adverse impact of rising rates on the wider economy,” added Mr Reardon.
“Compounding the rise in the cash rate, increased government regulatory costs, rising land prices and construction costs are further impeding an increase in the supply of new homes.
“This lack of new work entering the pipeline threatens to worsen the affordability crisis.
“Australia has a structural undersupply of housing, with rental vacancy rates around the country at record lows, driving rents and dwelling prices to new heights.
“The return of overseas workers and students, without an equivalent boost to housing supply, will exacerbate the situation.
“The only solution to addressing this crisis is to increase the supply of new housing.
“Against the headwinds of rising interest rates, governments need to respond by reducing the tax on housing, attract more investment, improve the supply of land for greenfield and brownfield projects and invest in new public housing stock.
“At its core, the shortage of housing is caused by a lack of investment. Investors are crucial to delivering new housing supply, especially in the increasingly important apartment sector. Despite this, governments and regulators have squeezed investors, especially foreign investors, out of the market with lending restrictions, fees and tax surcharges.
“Increased investment is also required from owner occupiers and from government.
“With the volume of houses commencing construction expected to reach decade lows in 2024, this is the ideal time for governments to invest in public housing stock. During down cycles, government will get a better return on their investment and help maintain the skill base in the industry that will be required in future years.
“Governments cannot resolve this shortage of housing stock by increasing or imposing more taxes on housing,” concluded Mr Reardon.
Lending for purchase and construction of a new home
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Slow start on signature housing target
“Australia commenced construction on just 43,250 new homes in the first quarter of the 2024/25 financial year,” stated HIA Senior Economist Tom Devitt.
“Let’s Build Australia” and get serious about skill shortages
“The focus on Fee Free TAFE is distracting from the real issue facing the supply of housing in Australia. Successive governments have been aware of the persistent and structural skill shortages across key construction trades for decades and the current policy approaches are doing very little to shift the dial,” said HIA Managing Director Jocelyn Martin.
Keeping the dream alive - Greenfield development must be part of a diverse housing mix (NSW)
Reports featured in the media today are a good reminder that home ownership still matters to Australians, and we need to build more housing, of all types to keep the dream of home ownership alive,” said Brad Armitage, HIA Executive Director NSW.
New Year updates for WA
On behalf of all of us at HIA we would like to wish you a very happy 2025! As everyone heads back to work for the new year, we are sharing some exclusive member updates to get you ready for what lies ahead and perhaps what you might have missed while you were away.