Ambitious housing target hits regulatory roadblocks

Immigration and housing targets have become a political football as the National Housing Accord target of 1.2 million new homes by 2029 looks to be heading for the abyss.

Population growth, labour and supply chain shortages, combined with formidable planning hurdles magnified by bureaucratic red tape at all levels of government are standing in the way of ever getting near this target; the system just grinds too slow to meet market demand.

To add to the dilemma, Australia’s population grew by 651,200 to a record high 26.97 million people in 2023, according to the latest figures released this week by the Australian Bureau of Statistics (ABS).

This above-trend population growth remains driven by elevated net overseas migration.

ABS figures show that net overseas migration (NOM) was 26.3 per cent higher over the 2023 calendar year.

HIA chief economist Tim Reardon said the building industry had consistently argued for stable and reliable population growth.

“The boom/bust cycles in migration seen over the pandemic period leads to undesirable economic, social and business outcomes.

“As the main determinant of population growth, the fluctuating nature of NOM has a crucial impact on workforce participation numbers, national skills capacity, productivity and overall economic output.

“The HIA supports a managed migration program that delivers adequate skilled migrants in construction and building professions and trades to meet Australia’s ongoing housing needs.”

The HIA estimates Australia’s future underlying housing demand sits above 200,000 homes per year.

Unfortunately, only 172,725 dwellings were completed in the calendar year 2023 which will add to rental and house price pressures.

“The stark demand/supply imbalance in new home building requires significant and swift policy action from all levels of government,” Mr Reardon said.

“Up to 50 per cent of a new house and land package is taxes, fees and charges, reducing these costs is necessary to delivery more homes,” Mr Reardon concluded.

HIA senior economist Tom Devitt said state and federal policymakers need to incentivise local authorities to accelerate the release of shovel-ready land and permit higher density development in existing suburbs near jobs and transport.

“Addressing tax, planning, land and regulatory constraints on the housing industry is the only hope of reaching state and national housing targets in coming years and addressing the country’s housing crisis.”