Advertisement
Powered by MOMENTUM MEDIA
lawyers weekly logo
Borrower

Policy rethink needed to boost housing supply, Cotality warns

7 minute read
Housebuilding

A bottleneck in the build phase is hindering government efforts to accelerate new housing delivery, Cotality research has found.

Policy change is “urgently needed” to boost the construction of quality housing if the government is to meet its target of building 1.2 million new dwellings by 2029, according to Cotality Australia’s head of research Eliza Owen.

She argued that, with approvals lagging and construction capacity under pressure, housing targets are looking increasingly unachievable.

However Owen stressed that the delivery of homes was the major problem, not dwelling approvals.

 
 

“With 219,000 homes already under construction and completion times ballooning, the real bottleneck lies in the build phase, not planning reform,” she explained.

Tim Reardon, chief economist at the Housing Industry Association (HIA), has previously said that Australia will need to build more than 250,000 homes annually to meet the government’s target of 1.2 million homes.

However construction companies continue to be stretched by rising costs and a shortage of tradies, in spite of government initiatives to boost numbers.

How can government lift housing supply?

Owen warned that a major part of sluggish housebuilding was that the government has limited control over many of the factors that determine demand and supply.

For instance, despite state and local government policies to speed up planning and approval processes, relatively high interest rates and affordability constraints were keeping dwelling approvals low.

Commenting on the problem, she said that higher approval rates would not solve the housing shortage problem.

“Approvals could move higher in the coming months, as recent zoning reforms and incentives for new builds at the state level coincide with falling interest rates.

“But this could present a problem for the construction industry: it may add more new projects to an already swollen pipeline. It’s like turning up the tap on a bath that is already full.”

All eyes on roundtable

Later this month, the Treasurer will host an Economic Reform Roundtable, aiming to improve productivity, enhance economic resilience, and strengthen budget sustainability.

Housing is likely to feature heavily, with leaders across business, government, and industry set to discuss reforms that could reshape policy.

‍The HIA and the Mortgage and Finance Association of Australia (MFAA) have already made submissions urging for reforms to boost productivity and alleviate housing pressures.

In its submission to the Productivity Commission’s five inquiries on boosting Australia’s productivity, which will inform the roundtable, major lender Commonwealth Bank of Australia (CBA) also called for policy reforms to address housing affordability.

[Related: Building approvals rise, but more needed to hit housing targets]

construction house property ta k y r

Will Paige

AUTHOR

Will Paige is a senior journalist at mortgage broking title, The Adviser.

He writes news and features about the Australian broking industry and property market, reporting on regulation, lending trends, banking and emerging technology.

Before joining The Adviser in 2024, Will covered M&A and debt financing news at London-based publication TMT Finance. He has previously written about business and finance news for a variety of media brands including Insider Intelligence, The Sunday Times Fast Track and Alliance News. 

Contact Will at: william.paige@momentummedia.com.au.

JOIN THE DISCUSSION

You need to be a member to post comments. Become a member for free today!
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more
You have 0 free articles left this month.
Register for a free account to access unlimited free content, or become a PREMIUM MEMBER to enjoy a wide range of benefits