The Advertiser’s Housing Forum hears city towers key to housing squeeze

Unloved office towers in the city could become luxurious homes for thousands, The Advertiser’s landmark Housing Forum has been told.

Adelaide must pursue an aggressive growth strategy to double the CBD population, which should include conversion of old office buildings into housing, Treasurer Stephen Mullighan says.

Speaking at The Advertiser’s landmark Housing Forum, Mr Mullighan said the current Adelaide City Council population of 25,000 was “in this day and age … absolutely laughable” — and should be doubled in the next 10-15 years.

“I would like to think, with the right effort and the right policies in place, you get there in a canter,” he said.

Mr Mullighan said declining office occupancy rates meant the vibrancy of the city now depended on a thriving population.

The Advertiser's landmark Housing Forum was held on August 31.

“I think the issue is: how aggressive can we be with that (population) target? Because I go downstairs to the sandwich shop, they don't want to wait 10 or 15 years to see the huge increase in vibrancy and commercial benefit that that would bring for them,” he said.

“So I’d love to see a rough doubling or whatever that number is, but we need to be aggressive and get there sooner and you know, hopefully we’ll have a council that will want to see that as well.”

Mr Mullighan acknowledged the population growth strategy would not be popular among some parts of the community, but said he was undeterred.

“I realise that it will cause all sorts of wailing and gnashing of teeth in North Adelaide, and, no doubt, when Commercial and General build their Le Cornu development it will be viewed as the Tower with the Eye of Sauron in it by some,” he said.

“But this is something that we have to do to provide a vibrant city and to provide some housing solutions.”

Adelaide Lord Mayor Sandy Verschoor said she welcomed Mr Mullighan’s view that the city should be more ambitious with population targets, and said work was underway on a council plan for sustainable growth.

“Council is more than willing to play our part but it’s important that we partner with the state government and city stakeholders in order to achieve such ambitious growth in the right way,” she said.

“We need the state government’s support to drive the right design outcomes when it comes to new buildings, on ensuring appropriate land use within the city, and in strengthening heritage protection.”

Mr Mullighan said the government was willing to change the building code — which in the past proven a barrier — in order to open up new accommodation options, including conversion of old office buildings into residences.

“Let’s start talking about that, let’s start addressing that. If there are simple regulatory changes that can be made her in South Australia or even nationally, let’s get on and do it,” he said.

he Advertiser’s editor at large Paul Starick talks to South Australian treasurer Stephen Mullighan. Picture: Simon Cross

“The vacancy rate among A-grade office accommodation is extremely low — build it and they will come. But we’ve got a growing tail of B-grade, C-grade and D-grade buildings which aren’t being repurposed and refitted into residential accommodation.”

Mark Hoffman-Davis, SYC chief executive, said South Australia needs 35,000 or more extra homes to alleviate the current statewide crisis.

Maria Palumbo, Junction Australia chief executive, said built-to-rent schemes, where developments are purpose built for use as rentals, would offer tenants a level of housing security more similar to homeownership.

“We want (homeownership) because we can all settle and find that place,” she said.

“With renters, they never get that because they're always at the whim of somebody wanting to realise an asset.”

However, she said such schemes had not previously been a major focus because “Australia has always been a country where homeownership is everyone’s dream”.

“We’re facing an interesting time in Australia where no matter how hard you work, if you’re in particular fields you’re not going to get there anymore,” she said.

Housing and Urban Development Minister Nick Champion. Picture: Mark Brake

Housing key to unlock growth

By Kathryn Bermingham and Erin Jones

The housing crisis is stifling growth in regional communities, where jobs are available but a lack of accommodation is preventing expansion, Housing and Urban Development Minister Nick Champion says.

In a panel discussion at The Advertiser’s landmark Housing Forum, Mr Champion said development in the regions presented a challenge, with infrastructure struggling to keep up.

He said the problem was evident to him during a recent visit to Bordertown.

“They can handle 200 workers at the abattoir there, but there’s just no housing for them,” he said.

“So it does start to become an inhibitor on economic growth, as well as this huge social problem.”

Mr Champion said the solution was to boost affordable housing stock.

“Whether it comes from build-to-rent, whether it comes from community housing providers, whether it comes from private developers, that’s got to be the focus,” he said.

He said Australian super funds were looking to invest in housing – which presents “a good stable return for institutional investors” – and the government should look at how it can foster growth.

“It’s not always about, you know, tax breaks, sometimes it’s just about actually being the facilitator and getting projects going,” he said.

Tatiara District Council Mayor Graham Excell said the region had jobs to offer, but the lack of housing was hindering growth.

The panel who met for The Advertiser’s Housing Forum on August 31. Picture: Mark Brake

The area’s main employer, JBS abattoir, which had been referred to by Mr Champion, was forced to buy a local hotel in Bordertown in December to combat housing shortages for its staff. The hotel is now at capacity.

“The last I heard, there were 71 people housed there for accommodation,” Mr Excell said.

“One of the engineer’s family has been in Mildura for the past four weeks because they can’t find a house here, so he commutes to see them.

“There’s nothing in the way of rentals. One of the real estate agents had one house come on the market a fortnight ago and it was sold the same day.”

Mr Excell’s solution was to incentivise private businesses to build houses for their workers.

“If you’re a farmer and you build a new shed, or buy a new header, there is a tax deduction write-off of up to $150,000 per year,” he said.

“We need the same option for businesses to build a house for their workers. It gives them an incentive to supply housing.”

Port Augusta Mayor Brett Benbow said the lack of housing availability was an issue across the entire Upper Spencer Gulf due to development in the region.

“At the moment we’re getting by but we’re limited in rentals. So many contracting staff are here and a lot are in caravan parks occupying cabins, so then tourists are struggling to find places to stay,” Mr Benbow said.

“But how do you solve this problem? If you build 1000 homes and then these projects ease off, who is going to live in these homes?”

Mr Benbow said the Upper Spencer Gulf mayors held quarterly meetings with the former government and continually raised the lack of housing as a key issue, as well as skills and employment.

“We’ve had companies that want to base staff here, but they have to look elsewhere or they may fly-in, fly-out, which we don’t want. We want people to stay here as much as they can, but how we do that I don’t know.”

Home truths on the changing market

By Paul Starick

Adelaide’s longstanding housing affordability advantage is being quickly eroded by a historically tight rental market and a severe Melbourne downturn, the housing forum heard.

PropTrack (REA Group) senior economist Eleanor Creagh said Adelaide’s traditionally lower price point for rentals, in particular, had been eaten away and the city was now on par with Melbourne.

“It is being quickly eroded and particularly so in the rental market actually. So if you compare say, the Melbourne central market, which actually suffered incredibly through the pandemic when migration and the international borders closed and demand to rent in the CBD of Melbourne pretty much dried off,” she said.

“We saw rents dropping 25 per cent or so in some parts of Melbourne. That has recovered now, but, in part because of that depression in Melbourne, we’re actually seeing that rents in Adelaide are pretty much on par with rents in Melbourne in some parts of the city.”

PropTrack’s June quarter rental report showed Adelaide’s weekly advertised rents slightly overtaking Melbourne’s at more than $400.

Ms Creagh said this price parity did not correlate as precisely to home sales – the June quarter figures show Melbourne’s median house price at $907,000, compared to Adelaide’s $661,750.

Asked if Adelaide losing a competitive advantage to Melbourne made it harder to attract people and investment, Housing and Urban Development Minister Nick Champion said this was “a bit of a dual-edged sword”.

“Obviously, it would be an issue that we have to grapple with – the issue of affluence, I guess, in a way, and of having a good employment market,” he said.

Asked if the model of the South Australian Housing Trust providing large numbers of affordable public housing for workers was dead, Mr Champion said this was not “completely gone” and the Trust had a “huge role to play” providing housing for “the most needy”.