‘No silver bullet to solve housing crisis’: Millions of homes outdated

Hours ahead of federal budget 2023, Australia’s peak builders’ body says “no silver bullet” will solve the housing crisis, as experts warn millions of existing homes also need upgrades.

Master Builders Australia CEO Denita Wawn Picture: Sean Davey.

Hours ahead of federal budget 2023, Australia’s peak builders body says “no silver bullet” will solve the housing crisis, as experts warn millions of existing homes also need upgrades.

Fresh building approvals data released hours ahead of federal budget 2023 – which is set to be delivered by Federal Treasurer Jim Chalmers 7.30pm Tuesday – showed numbers were heading in the wrong direction at a time when communities were crying out for housing, Master Builders Australia CEO Denita Wawn said.

“Home building over the first three months of 2023 show approvals at their lowest level in a decade,” she said.

“We can see the impact of rising interest rates in the homebuilding market, and without appropriate fiscal measures at a federal and state level, we will continue to see further softening in the housing pipeline.”

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MBA says carefully targeted spending are required to boost productivity and create “more favourable outcomes” in building and construction. Picture: NCA NewsWire/Sharon Smith

Ms Wawn said MBA hoped the Senate considered Monday’s buildings approvals data when they debate the Housing Australia Future Fund this week.

“Parliament has an opportunity to send the right signal and kickstart a vital piece of housing reform,” she said. “We know some members of the crossbench are looking for more funding, and while that would be welcome, it cannot come at the expense of doing nothing at all as each month of building data heads in reverse.”

“There is no silver bullet to solving the housing crisis in Australia. There are a multitude of levers that the federal, state and local governments can pull.”

Master Builders Australia called for the Albanese Government’s 2023 budget to be “fiscally responsible and target measures to alleviate the housing crisis”.

“The budget needs to ensure that carefully targeted spending boosts productivity for business and allows for more favourable outcomes when it comes to the cost, quality and quantity of building and construction output.”

New home building approvals were relatively flat (-0.1 per cent) in March compared with February. Picture: Glenn Campbell.

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The comments comes as researchers from RMIT’s School of Property, Construction and Project Management warned millions of Australian homes were exacerbating the cost of living crisis because they did not meet current efficiency standards.

Senior lecturer Dr Trivess Moore said such homes with higher energy use for heating and cooling were not just bad for the environment and “also bad for our wallets in a cost-of-living crisis”.

“Many Australian homes were built before the introduction of minimum performance standards in the 1990s and before national standards were introduced in the mid-2000s,” he said. “Around 10.8 million existing homes will need to undergo deep retrofit between now and 2050. That is a deep retrofit of 47 homes each hour until 2050.”

Dr Moore said government action was needed as research showed homeowners may do “small, one-off retrofits, rather than deep retrofit”.

“Others are unable to make these changes due to living in rental housing, where landlords may not be inclined to invest. The average person also lacks knowledge of what needs to be done. A national, funded approach could reduce barriers to improving Australia’s housing quality.”

Higher energy efficiency standards are a bone of contention as they push up the cost of housing but also help bring down the cost of living. Picture: NCA NewsWire/Andrew Henshaw.

Senior lecturer Dr Nicola Willand said while federal electricity bill relief payments were welcome to energy vulnerability, it did not offer continued relief.

“Targeting of the energy bill relief to welfare recipients overlooks households in ‘hidden energy vulnerability’ with earnings just above the welfare income threshold, and other struggling households who are not captured in the welfare system.”

She said more support was needed to increase the uptake of solar photovoltaic panels among less-wealthy households.

“Retrofits of poor performing homes promise sustained resilience to power price increases, as well as carbon emission reductions and health benefits. These individual health benefits can have flow-on effects on the public health system and budget. Yet the uptake of retrofitting, such as solar panels, is occurring unequally – with Australia’s low-wealth homeowners and renters falling behind.”

“Renters are more likely to struggle with energy bills than owner-occupiers. However, in 2019-2020, only 6 per cent of renters had access to free electricity from solar photovoltaic panels compared to 30 per cent of owner occupiers. Renters tend to live in less energy-efficient homes than owner-occupiers. Renters may also be missing out on draught proofing and lighting upgrade subsidies.”

New building code regulations requiring seven star energy efficiency have varied implementation dates across the country.

New building code regulations requiring seven star energy efficiency have been a bone of contention with builders, some of whom have called for implementation deferments to allow the current shortfalls to be addressed. Master Builders Queensland chief executive Paul Bidwell earlier warned “they’re going to make matters worse”, adding $20,000 typically to the cost of a new home.

Master Builders Australia chief economist Shane Garrett said new home building approvals were relatively flat (-0.1 per cent) in March compared with February, a downward trend that started in September 2022.

“Concerningly, the inflow of new work remains significantly lower compared with a year ago, having retreated by 17.3 per cent. New detached house building approvals weakened again by -2.9 per cent, a 15.0 per cent reduction on a year ago,” he said.

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