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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.
With the delay to decisions on the content of NCC 2025, the ABCB has published a further amendment to the current NCC 2022 which applies from 29 July 2025. The purpose of this minor amendment is to align the NCC with recent changes to the Premises Standards which apply to Class 3 to 9 public buildings, common areas of Class 2 apartment buildings and short-term accommodation
“HIA alongside a group of construction leaders and Standards Australia came together today at Parliament House, to present a united front in getting easier access to Australian Standards in the hands of those who need them most,” said HIA Managing Director, Jocelyn Martin.
HIA has made a comprehensive suite of submissions to the Productivity Commission ahead of the upcoming Treasurer’s Economic Reform Roundtable on 19-21 August.
The Housing Industry Association (HIA) is calling on Treasurer Jim Chalmers to put housing at the centre of the upcoming Economic Reform Roundtable.