Lower migration levels won’t help housing shortfall

AN interim report on housing has highlighted “the enormous heavy lifting yet to be done to address Australia’s housing deficit and affordability challenge,” according to the Property Council of Australia.

The Senate Select Committee on Productivity report recognised housing undersupply as a constraint on labour mobility, business growth and living standards.

And it is recommending reforms across investment settings, development finance, modern methods of construction, environmental approvals and the National Construction Code. 

Matthew Kandelaars, Property Council group executive policy and advocacy, said the report highlighted the breadth of reform needed to improve housing affordability and boost economic productivity across the economy.

But he warned against viewing migration and housing in isolation. 

“Housing is a productivity issue, a workforce issue and an economic growth issue,” Kandelaars said. 

“The committee has rightly focused attention on a range of barriers to housing delivery, including investment settings, development finance, construction productivity and regulatory efficiency.” 

Kandelaars said the report’s focus on investment and finance settings reflected the important role capital plays in delivering new housing. 

“The committee is right to identify punitive taxes on global investors as a barrier to local housing supply,” he added.

“Australia needs more capital to build more homes. Investors look at the overall investment environment, which is why stable, certain and competitive tax settings matter. This year’s Federal Budget provided the opposite.” 

The report also highlights the role modern methods of construction, and a more effective National Construction Code, can play in improving productivity and accelerating housing delivery. 

“We support practical reforms that make the National Construction Code easier to use, accelerate modern methods of construction and provide greater certainty for industry.

“But energy efficiency and other nationally agreed outcomes belong in a modern national framework.  

“Proposals to replace one clear national rulebook with a menu of standards won’t help productivity.

“Instead, it’s a recipe for more confusion, more variations and more time spent arguing about requirements on site instead of building homes.

“On environmental approvals, the report rightly recognises that good guidance and regulatory practice matter just as much as black-letter law.  

“The Housing Taskforce has demonstrated what can be achieved when regulators focus on solutions and housing delivery, and that approach should be embedded permanently.” 

Responding to Senator Andrew Bragg’s comments at the National Press Club, where he suggested a reduction to net overseas migration to around 180,000 a year, Kandelaars said migration policy and housing supply should not be viewed in isolation. 

“Governments will always need to make decisions about migration levels and the right skills mix – including getting more tradies into the country – but there is no substitute for increasing housing supply,” he said.

“Australia’s housing challenge will not be solved through migration policy alone.

“The long-term answer remains building more homes, faster approvals, better infrastructure and stronger investment settings.”