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{{propApi.successMessage}} {{region}} Change locationNavigating the housing supply challenge
Navigating the housing supply challenge
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Today’s housing crisis has developed over more than 20 years and accelerated through the pandemic. It cannot be resolved by any single government or within one term, but there is much that can be commenced.
The Australian Government’s scope to improve market equity and increase housing supply is constrained. State governments oversee infrastructure, transport, and hospitals, while local councils manage the availability of land for development.
There are around 11 million households in Australia, but increasingly the cost of achieving climate change goals, increasing public housing stock and paying for the maintenance of community spaces are being imposed on just the 200,000 households building a new home each year.
The inequity of a tax system that requires new home buyers to fund an increasing burden of government expenditure has seen a decline in the share of households building a new home over recent decades. This, in turn, leads to fewer new home buyers bearing this ever-increasing tax burden.
The more you tax housing, the fewer homes will be built. Up to 50 per cent of the price that a consumer pays for a new house and land package is taxes, fees, charges and unnecessary costs imposed by governments. If you tax it, you will get less of it.
The following initiatives will not resolve the inequities caused by decades of undersupply of housing but adopting them will set the stage for increased supply, reduced rents, and stabilised home prices by the end of the decade. It's not too late to make a difference.
- Focus on increasing housing supply across the housing continuum, rather than focusing on one housing segment.
- Include ‘housing affordability’ as a guiding principle for every state and federal government department developing housing related policies.
- Fund public housing equitably and increase public housing investment beyond election cycles.
- Increase government investment in enabling infrastructure to get shovel ready land delivered faster.
- Ensure infrastructure costs are equitably shared and not burdened only on those supplying new housing.
- Restore foreign investment into home building to help fund and boost the numbers of private rentals.
- Increase placements in Home Guarantee Scheme and introduce Help to Buy to support first home buyers to secure house deposits.
- Ensure stable and reliable migration policies are set in place and housing can be planned to support these settings.
- Facilitate greater access to skilled labour through the introduction of an appropriate skilled migration program.
- Boost apprentice numbers and provide consistent support for employers to take on an apprentice.
- Reevaluate mortgage lending restrictions that place unnecessary restrictions on first home buyers securing home loans.
- Improve data on land supply and benchmark new land releases against the National Housing Accord target of 1.2 million homes.
- In conjunction with state and territory governments implement widespread planning reforms as set out in the National Planning Reform Blueprint.
- Aim for a Rental Vacancy Rate of 3 per cent to create a more competitive rental market, increase rental options and reduce prices.
- Place a moratorium on new regulatory measures that would add to the cost of housing and require government standards setting agencies to identify regulatory offsets for any new substantive regulations.
Call to Action
Addressing the housing crisis requires leadership and coordination from the Housing Minister, Treasurer, Finance Minister, Skills Minister, Immigration Minister, Industry Minister, and all tiers of government.
We need to rethink how revenue is raised, redefine the role of local councils, and shift away from expecting taxes on new housing supply to fund broader public needs.
We need to acknowledge the impact of the increasing reliance by state and local governments on housing related taxes and work out how to incentivise or compensate for this if they feel this revenue stream is threatened.
Governments should support housing outcomes rather than hinder them. The focus should be on removing restrictions and enabling Australians to secure homes without undue financial strain.
Overall, we seek strong and brave leadership on housing, collaboration, and a system which encourages accountability from state and territory governments.
For more information please contact:
Population data highlights contradiction in government policy
“Australia’s population reached 27.4 million by the end of 2024, up by 445,900 people, or 1.7 per cent for the year,” stated HIA Senior Economist, Tom Devitt.
Tasmanian Election - Stadium or no stadium we still need housing
The Tasmanian election that no-one wanted to have is in full swing, and while the limited campaign period is unlikely to provide the usual platform to promote key policies and reforms, HIA is calling on both major parties to prioritise housing policies given the significant challenges across the state.
‘Getting Keys in Doors’ shouldn’t be this difficult
“Our dated and complex planning system is littered with speed bumps that could easily be removed”, said Brad Armitage, HIA NSW Executive Director.
New home building contract laws welcomed by HIA
“The Victorian government’s proposal to update home building contract laws to make them fit for use in the 21st century is welcomed by HIA,” stated HIA Executive Director, Keith Ryan.