Yes to new housing supply, no go for rent cap

The construction and real estate industry can now breathe a sigh of relief as National Cabinet look to support more housing stock while knocking off the notion of a rent cap.

The peak body for the building and construction industry, Master Builders Australia (MBA), has applauded the game-changing measures to boost much-needed housing supply while taking pressure off some of the most vulnerable in our community.

Master Builders Australia chief executive officer Denita Wawn said it was known from social and community housing, rental properties and owner-occupiers that there was a common constraint – supply.

“All levels of government last year acknowledged the imperative of housing supply with the establishment of the Housing Accord, and now there are real commitments on the table.

“Governments across all levels must now implement the measures announced today as a matter of urgency.

“Master Builders had forecast that we need at least 200,000 dwellings constructed a year in order to meet demand.”

The revised new national target of building 1.2 million well-located homes over five years has been welcome news to the industry and shows commitment to go above the baseline requirement, a rare trait in most bureaucracies.

Ms Wawn said the root of the supply problem was getting projects off the ground, which were lagging due to a combination of high costs, a declining investment appetite from rising interest rates, and delays in approvals.

“A national planning reform blueprint that looks at the key pinch-points in the building process from planning, zoning and land release will be a key pillar in addressing our housing supply challenges.”

The New Home Bonus and Housing Support Program will assist governments to undertake the array of reforms necessary to boost supply and offset some of these costs.

Master Builders has long advocated for a federal incentive payment program that looks at planning delays, developer charges, zoning restrictions and housing infrastructure investment.

The cost of building homes has been exacerbated over recent years with unnecessary delays and barriers encountered on their journey to completion.

This includes planning impediments, lengthy approval processes and high developer charges on new land developments.

Master Builders had previously modelled these charges and delays can add up to 30 per cent to the cost of a new greenfield housing development.

Ms Wawn said the focus on supply must be across the entire housing market so that it would facilitate movement through the housing spectrum, enabling lower-cost housing to become more affordable.

“National Cabinet has thankfully resisted the temptation of rental caps and freezes which is a harmful intervention in the rental market.

“Migration will play an essential role in the delivery of new homes with the building and construction industry needing half a million new workers by the end of 2026.

The Real Estate Institute of Victoria (REIV) has also applauded the end of the rent freeze discussion.

Victoria’s real estate peak body says i i’s buoyed by the National Cabinet announcement to end any further consideration of rental caps and freezes.

REIV chief executive officer Quentin Kilian said it was encouraging to see a national approach being taken to address the underlying causes of the housing and rental crisis playing out across Australia, with states in agreement that rental freezes would only exacerbate the issue.

“Housing supply is the foundational issue facing Australia’s residential property market and increasing supply is where policy needs to start.

“A rental cap or freeze over and above the legislation already in place in Victoria was an ill-considered idea that would only drive more investors from the market and leave renters out in the cold.”

“It’s also reassuring to hear state and national leaders are now heeding our call to address the root cause of supply head on.

“With states now encouraged to focus on increasing housing supply in place of rental caps, we welcome the opportunity to work with the state government on how to relieve that pressure on the market for now and into the future.”