Polling reveals housing crisis will punish government at elections
New polling reveals the housing crisis will become the key issue at the next federal elections ahead of falling living standards and retirement concerns, primarily because 85% of voters believe either it’s impossible or doubtful whether young Australians will ever be able to buy a home of their own, even with family financial help.
Rates of pessimism are highest in electorates held by Labor.
Research by RedBridge and Accent shows that pessimism about home ownership and retirement strongly correlates with swings away from the government, especially in outer suburbs and regional areas.
However, only 15% of South Australians believe it’s impossible for young people to enter the housing market without family assistance.
Yet, according to CoreLogic’s latest Affordability Report, servicing a loan on a median priced Australian dwelling now requires more than half a gross annual income of about $100,000. Eliza Owen, the company’s head of residential research, says the 50.3% cost of servicing a mortgage has increased from 37% a decade ago, “a hike that’s unsustainable”.
Change is needed urgently
The Business Council of Australia (BCA), the nation’s peak business organisation, is calling for a comprehensive overhaul of the housing approval process to increase housing supply, and recommends that state governments become more involved by relaxing threshold requirements for housing projects.
The BCA wants a review of thresholds at which decisions on approvals for housing projects can be transferred from local councils to state governments as “significant projects”.
At present these thresholds vary widely, having to exceed a value of $75m in Sydney but only $20 in Perth.
BCA’s chief executive Bran Black says tough decisions must be made to “turbocharge” housing assessments and approvals, amid the federal government’s Housing Accord target of 1.2m homes to be built in Australia by 2029 – already pronounced unachievable by economists and building industry leaders.
The Opposition believes it’s unachievable for various reasons but fundamentally because there won’t be enough infrastructure ready in the next four years to support the function of so many homes.
The Opposition’s remedy
Leader of the Opposition Peter Dutton proposes to get the job done by establishing a $5b infrastructure fund to unlock the potential of sites for 500,000 homes, a process that can be sped by putting a stop to proliferation of red tape with a 10-year freeze on further changes to the National Construction Code.
He says this will protect families from exploding costs attributable to bureaucratic delays, and to on-going moderations of energy efficiency standards.
The fund Mr Dutton is proposing as a key element in the Coalition’s forthcoming election strategy will operate on a use-it-or-lose-it basis, where companies can apply for grants and concessional loans to undertake housing projects on shovel-ready greenfield sites.
Though this is not a traditional matter of federal responsibility, Mr Dutton says the Coalition wants to restore Australians’ dream of being able to own their own homes.
Accordingly, with time limitations, he says a government he leads will help fund enabling infrastructure including water, power, sewers and access roads.
In the four years the fund will operate, money will be available on application to local governments, state and territory-owned utility providers, property developers and companies that operate special purpose vehicles.
However, successful applicants must have made satisfactory progress in 12 months, or funding will be terminated.
Meanwhile in SA
We understand there’s an initiative in SA underway where offshore investors are looking at a scheme to build 2000 “social and affordable homes” by 2030.
Maria Palumbo, chief executive of the developer, Junction, says it’s expected secure investment will come from specialist and offshore financiers and from potentially local superannuation and insurance funds.
She says many of the proposed homes will be built to rent, and while “there is a lot of scepticism in Australia about such development”, it’s been a proven success in Canada, Singapore and elsewhere.
Junction, which employs 400 people, has several social and affordable housing projects in progress across Adelaide, including a $36m development at Tonsley that’s supported with a $15.2m grant from the federal government’s Social Housing Accelerator Program.
A joint venture with Housing Renewal Australia and the SA Housing Authority is planning another 700 new homes for a $200m development at nearby Oaklands Park, expected to be the state’s largest social housing project in decades.
Junction’s investment in innovations to build homes for vulnerable people, is represented by trialling an alternative to traditional housing at Tiny Homes Campus in Adelaide’s south. The organisation is delivering 10 compact modular homes there to support people between 16 and 18 transitioning out of the care system.
But it’s a blurry bottom line
Yet even if the Coalition’s proposed solution to the housing crisis – outlined above --will fix it; even if initiatives like Junction’s (linked to state and federal funding) are effective in helping to solve the problem, the bottom line here is blurry.
Can enough be seen to have been done by the government to fix the housing problem before the next federal elections?
We, along with many other commentators, are inclined to answer no to that. We e also suggest that if Anthony Albanese’ s government isn’t re-elected, it in no small measure will be because voters believe he’s failed to take hard decisions on tax and other reforms that would have checked inflation, thus avoiding much that has worsened the nation’s housing problems.
