{{propApi.title}}
{{propApi.text}} {{region}} Change location{{propApi.title}}
{{propApi.successMessage}} {{region}} Change location {{propApi.title}}
{{propApi.text}} {{region}} Change location{{propApi.title}}
{{propApi.successMessage}} {{region}} Change locationInterest rate rise risks worsening housing shortage
Interest rate rise risks worsening housing shortage
Member and guest login
Enter your email and password to access secured content, members only resources and discount prices.
Did you become a member online? If not, you will need to activate your account to login.
If you are having problems logging in, please call HIA helpdesk on 1300 650 620 during business hours.
Forgotten password
Need some help?
If you are having problems logging in, please call HIA helpdesk on 1300 650 620 during business hours.
If the email address you have entered is registered, you will receive an email with further instructions.
Become part of the HIA community
Enables quick and easy registration for future events or learning and grants access to expert advice and valuable resources.
Create a guest account
Enter your details below and create a login
Send me exclusive tips, early access to new launches, and special offers. I can change my mind at any time.
By clicking Get started now you agree to the terms and conditions and privacy policy.
“Monetary policy has an important role in managing inflation, and the RBA’s actions reflect the persistence of price pressures across the economy,” Mr Reardon said.
“However, higher interest rates also increase the cost of delivering new homes and make it more difficult to finance new housing projects.”
“As a result, this decision is likely to reduce the number of new homes commencing construction at precisely the time Australia needs more housing supply.”
Mr Reardon said the impact of higher interest rates on housing supply risks intensifying the structural shortage of homes, placing further upward pressure on both rents and house prices.
“Constraining the supply of new homes does not reduce housing costs, it does the opposite. When fewer homes are built, competition for existing housing increases, pushing prices and rents higher and adding to housing inflation.”
Mr Reardon said policy settings across all levels of government will now become even more important in determining whether Australia can address its housing shortage.
“If governments are serious about improving housing affordability, they must focus on increasing the supply of new homes,” he said.
“The only sustainable way to reduce housing costs is to lower the cost of delivering a new home.”
“This means reducing the taxes, charges and regulatory barriers that add to the cost of new housing.”
Mr Reardon warned that proposals currently being discussed to increase taxes on property investors would move policy in the wrong direction.
“At a time when higher interest rates are already restricting housing supply, increasing taxes on investors would further discourage the investment needed to finance new housing projects,” he said.
“Policies that reduce investment in housing will inevitably reduce supply and push housing costs higher.
"The logic that increasing taxes on investment in the established market will see more investment in new home building is flawed.
"Taxing used cars does not lead to new cars becoming more affordable. The same logic applies to housing/ Investors know that they incur the new tax in the future and take that into consideration in making the decisions.”
Mr Reardon said the focus should instead be on policies that encourage the construction of new homes.
“The solution to Australia’s housing shortage is straightforward: lower the cost of building new homes and encourage investment in new housing supply,” he said.
“Reducing taxes and charges on new housing, speeding up planning approvals and lowering regulatory costs would do far more to improve affordability than policies that further restrict housing investment.”
For more information please contact:
WA State Budget delivers record housing investment
Today Treasurer Rita Saffioti delivered the 2026/27 budget for the Cook Labor Government in WA.
HIA welcomes record housing investment: no better place to be a tradie
The 2026/27 Western Australian State Budget delivers a strong platform to boost housing supply while creating significant opportunities for skilled trades and the next generation of industry workers, according to HIA Executive Director WA, Michael McGowan.
Victorian Budget Contains Few Positives for Home Builders
This year’s predictable ‘election focused’ State Budget has missed the opportunity to improve the environment for home building. It contains few positive measures to increase housing supply, address housing affordability and lower the costs facing new home builders.
HIA welcomes grant extensions in NT Budget but calls for stronger skills focus
“The Housing Industry Association (HIA) says the Northern Territory’s 2026–27 Budget maintains key housing incentives but falls short of the investment needed to significantly lift housing supply and address skills shortages in the construction sector,” said Luis Espinoza, HIA Executive Director, Northern Territory.