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On Tuesday, 25 October, federal Treasurer Jim Chalmers delivered the first Labor budget in nearly a decade, announcing several strategies to support the housing industry.
The second budget developed in 2022, and the first of the Albanese government’s tenure, announced a bold plan to build 1 million new homes across the country over the next five years as part of a new National Housing Accord.
Under the Accord, state and territory governments will be held accountable for meeting supply targets and altering land release and zoning properties, a factor applauded by president of the Real Estate Institute of Australia (REIA) Hayden Groves.
He believes that if executed well, the government’s strategies can “give Australia’s housing stock the generational injection it so badly needs in the same way policy programs in the 1970s did”.
Mr Groves said it was important to note that more could be done in addition to the National Accord to address affordability.
“It is an opportunity lost once and for all to deal with the wicked problem of stamp duty by state and federal governments, which has been entirely and disappointingly omitted within the National Accord,” he said.
“However, 1 million new affordable homes are a supply ambition to be applauded. The challenge has now been thrown down to get these homes built, and Australians are housing in a very short period.”
Further to this, the Australian Housing and Urban Research Institute (AHURI) called the Housing Accord “essential”.
The institute added that “getting these involvements right will be critical. There are real risks to navigate, and many policy, regulatory and program design decisions to work through to ensure we have the right types of housing being built in the right places to make the difference our country so desperately needs.”
Additionally, Graham Wolfe, managing director of the Housing Industry Association (HIA), said the government’s target of 1 million homes “provides a necessary indicator to governments at all levels that priority action is needed should housing supply fall below 200,000 new homes each year”.
“Year-on-year housing supply shortfalls, as we’ve seen for most of the last two decades, inevitably add pressure to Australia’s housing challenges.
“For every year that Australia doesn’t deliver enough new homes to meet demand across the housing continuum, we will see a negative impact on both housing affordability and rental affordability,” Mr Wolfe said.
Joining the commendation of the government’s budget was Ken Morrison, chief executive at the Property Council of Australia (PCA).
“The National Housing Accord is a very welcome commitment, and we thank the government for engaging with the Property Council on this initiative,” he said.
He added that “achieving the government’s target will require more tangible actions than have been announced, and we look forward to working with the government on practical steps to boost supply.
Mr Morrison did suggest that “it is important we have fair tax settings that encourage investment in all types of housing”.
“Right now, current tax settings around built-to-rent housing are a barrier to investment, and levelling the playing field will bring more rental stock online,” he said.
Mr Groves added that it was important to remember that the 2022–23 budget wouldn’t immediately ease housing and rental affordability.
“Since May, repayments on a $500,000 mortgage have increased by almost $700 each month, and household savings is forecast to slump below pre-pandemic levels,” he said.
“Constraints on housing supply, including a backlog of new builds from supply chain pressures, all mean affordability pressures for home buyers and renters are unfortunately likely to continue.”
Mr Groves concluded that “affordable housing measures, whilst both necessary and welcome, will have no immediate impact on housing and rental affordability and availability woes for many Australians”.
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