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“New home building is racked by a structural undersupply of new greenfield and infill land, inefficiencies and delays in planning regimes and development approval processes, skilled labour shortages, construction cost escalation, and the aftermath of the most rapid interest rate hiking cycle in a generation,” added Mr King.
“Unfortunately, Asst Governor Hunter missed the opportunity to talk about punitive taxes on new housing,” stated Mr King.
“New housing is one of the most highly taxed and regulated sectors in the economy along with sin taxes of tobacco and alcohol. Taxing housing only contributes to fewer homes being built, rents to increase and home ownership to decline.
In 2019, the HIA commissioned the Centre for International Economics (CIE) to compose a research report- Taxation on the Housing Sector. The research and report identified that in Sydney, it’s estimated that of the total outlay made to acquire a new house & land package in a Greenfield estate, only 50 per cent of this outlay reflects resource costs. The other 50 per cent is made up of regulatory costs, statutory taxes and excessive charges.
“Any government policy changes to reduce taxation of new housing will greatly benefit housing affordability and will undoubtedly boost the supply of new housing.
“Asst Governor Hunter correctly asserted that there are major structural causes at play in the severe undersupply of new housing. ‘Underlying demand for housing, whether people rent or own their own home, is fundamentally determined by the size of our population and the number of people that live (on average) in each dwelling.’ This appears self-evident, but some government agencies continue to fail to understand this concept.
“Ms Hunter also indicated in her presentation that estimates of underlying housing demand sit somewhere between 260,000 to 320,000 homes per year. This stands in stark contrast to the National Housing Supply and Affordability Council’s finding in its State of the Housing System 2024 report, that underlying demand is currently around 230,000 and will later moderate to approximately 174,000.
“The NHSAC fails to accurately quantify and project underlying housing demand- failing to account for real income growth, changing demographic profile, an ageing population, an increasing share of one-person households, increased urbanisation and a number of other factors that are all likely to alter the dwelling mix.
“In its Housing Australia’s Future report, under varying real income scenarios, HIA estimates that Australia’s future underlying housing demand sits within the range of 227,826-249,585. This is a significantly larger volume of demand than the Council’s forecast ‘stabilized demand’ of approximately 174,000 in the year of 2024-25 and beyond.
“Asst Governor Hunter’s statement that the housing crisis ‘will not be a quick fix’ is both timely and carries a high probability rate,” concluded Mr King.
“The RBA decision to keep interest rates in restrictive territory today will not stop the improvement in leading indicators of future home building,” stated HIA Senior Economist Tom Devitt.
In mid-June 2025, the NSW Premier released the Housing and Productivity Contribution (HPC) Works-in-Kind Guideline for public consultation.
Today the State Government announced proposed changes to the regulatory powers to investigate registered builders who may be unable to meet the financial requirements of registration. The announcement also included a long-awaited review of the Home Building Contracts Act 1991 (HBCA) and associated laws.
Housing Industry Association welcomes today’s announcement by the Cook Labor Government to review key aspects of the home building contracts legislation and provide the building regulator with additional powers to work with builders in distress.