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Removing supply constraints critical for affordable housing


Removing supply constraints to make housing more affordable, a key recommendation of the Productivity Commission Report into the National Housing and Homelessness Agreement (NHHA) released today, has been a constant refrain from Master Builders Australia (Master Builders).

“Master Builders welcomes a key finding from the Productivity Commission that if governments implement reforms to improve supply, to ensure more homes are built, then housing for both homeowners and renters will become more affordable,” said Denita Wawn, CEO of Master Builders.

“We know that Australia needs to build at least 200,000 new homes every year to meet demand with it only met once this decade. Alarmingly, Master Builders’ forecasts that the next 3 years will fall significantly short of that 200,000 per annum figure with the forecasts indicating that it will not be reached until 2026”, said Mrs Wawn.

Master Builders advocates that the focus on supply must be across the entire housing market that will facilitate movement through the housing spectrum, enabling lower-cost housing to become more affordable. It is clear from the report that the issue of supply should not concentrate in the lower-cost segments.

“We have welcomed the Federal Government’s policy to create a National Housing Supply and Affordability Council to work with all levels of government. Master Builders strongly urges governments to commence work on supply reforms to address the key barriers that includes planning restraints, slow land release, high developer charges, and slow approval response times,” said Mrs Wawn.

The Productivity Commission found that the $3 billion spent by governments on first home buyer grants works against improving affordability but also found that the main barrier to prevent the purchase of a home is saving for a deposit given that the average deposit required has more than doubled over 20 years.

“Master Builders has supported first home buyers grants as a mechanism to assist in home ownership. The long-term use of first home buyer grants have been a necessary measure because governments have not addressed the underlying policies that stifle supply that in turn make home ownership out of reach for so many,” said Mrs Wawn.

Master Builders welcomes the recommendation by the Productivity Commission into the need for an independent review of the construction industry to identify reforms to boost productivity and improve affordability.

“Any review must be holistic and include the array of external pressures that adversely impact on productivity including the cumulative impact of taxes, regulation, and material costs. Master Builders has recently commissioned its own review but would support a review led by governments to identify microeconomic reforms to improve productivity,” said Mrs Wawn.

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