A Looming Shortfall of 1.2 Million Homes
Australia's housing system is facing a major crisis, with a projected shortfall of 1.2 million new homes by 2029 if current trends continue. This alarming prediction comes from the National Housing Supply and Affordability Council, which has presented its State of the Housing System report to the federal government.
The report paints a grim picture of a housing market plagued by inequity, unaffordability, and undersupply. The situation is particularly dire for vulnerable groups, with over 170,000 people on public housing waiting lists and another 122,000 experiencing homelessness.
Several factors are contributing to this crisis, including lagging construction times, unaffordable mortgages and rents, a rising population, and increasing demand. While the National Housing Accord aims to build 1.2 million new homes by 2029, the Council warns that this ambitious target may not be met if governments fail to implement new housing policies effectively.
The report highlights the need for urgent action, urging the government to translate promises into concrete actions, particularly regarding state planning reforms and federal funding for infrastructure and social housing. However, even with these measures, the construction sector faces significant challenges, including a shortage of skilled workers, low productivity, and a lack of innovation.
The report also emphasizes the inequities within the housing system, noting the declining ability of aspiring homeowners to purchase a home. It takes an average of 10 years to save a 20% deposit for an average dwelling, and even with a deposit, only 13% of homes sold in 2022-23 were affordable for a median income household.
The Council recommends reviewing taxation policies that favor homeowners over renters and addressing the housing needs of Indigenous Australians, who are significantly less likely to own homes and more likely to live in social housing.
The government has acknowledged the urgency of the housing crisis, with Treasurer Jim Chalmers stating that housing will be a major priority in the upcoming budget. The Housing Australia Future Fund, with an initial investment of $10 billion, aims to support the construction of 30,000 new social and affordable homes. However, industry experts believe that doubling the fund would be necessary to meet the growing demand.
With the upcoming budget, the government has an opportunity to take decisive action to address the housing crisis. By investing in social and affordable housing, reforming planning regulations, and supporting the construction sector, Australia can work towards a more equitable and accessible housing system for all.