Property lobby welcomes key report as ‘love letter to better housing supply’

A bombshell housing report probing the woes of Australia’s property market has been welcomed as a “love letter”.

The property lobby has welcomed a key report probing Australia’s supply-starved housing market as a “love letter”.

Housing construction has been falling for decades and consequently contributed to pushing prices up, according to a Productivity Commission (PC) report released on Monday.

The PC found Australia was completing half as many homes than in 1995 – when the country had a population of about 18 million – representing a 53 per drop in housing productivity.

It painted a picture of a sector hampered by red tape, devoid of innovation, dominated by smaller building firms and starved of skilled workers.

“There is no single thing to blame for this poor productivity performance,” PC commissioner Julie Abramson said in a statement.

“But there are steps that governments could take to remove or ease regulatory bottlenecks and encourage innovation in an industry where the way we build homes has barely changed.”

She said the “sheer volume of regulation has a deadening effect on productivity”.

The property lobby has welcomed a key report probing Australia’s supply-starved housing market. Picture: NewsWire / Flavio Brancaleone

“If governments are serious about getting more homes built, then they need to think harder about how their decisions unnecessarily restrict housing development and slow down the rate of new home building,’ Ms Wood said.

Property Council chief executive Mike Zorbas hailed the report as the first time the PC had taken time to “fully address the productivity of creating Australian cities”.

“The report reads like a love letter to better housing supply,” Mr Zorbas said in a statement.

“The recommended boosts to co-ordination and governance of new projects, including commercial property and other city assets, are urgently needed.

“Development co-ordination bodies, better skills recognition, improved innovation pathways and an arm’s length review of building regulation are all worthy recommendations.”

He said Australia had a “good national construction code”, but it could be better.

“Better resourcing for the Australian Building Codes Board to do its work and end patchwork adoption by states must be top of the review priorities,” Mr Zorbas said.

“States are starting to improve project timelines but much more needs to be done to co-ordinate more efficient planning outcomes for residential and commercial projects that benefit our cities.

“We must build our way out of the housing crisis, and every lever we can pull to boost the construction of new housing is essential.”

The Productivity Commission says red tap is ‘deadening’ productivity in the housing construction sector. Picture: NewsWire / Luis Enrique Ascui

He called on politicians of all persuasions and “all levels of government” to embrace reforms.

“The sooner we embrace the Productivity Commission’s solutions the sooner we can eliminate Australia’s housing deficit,” Mr Zorbas said.

Labor has sought to boost dwellings across the country since coming to power, pledging to build 1.2 million homes by 2029.

Working with states and territories to loosen regulations has also been a focus.

PC chair Danielle Wood said in a statement governments were “rightly focused on changing planning rules to boost the supply of new homes, but the speed and cost of new builds also matters”.

“Lifting the productivity of homebuilding will deliver more homes, regardless of what is happening with the workforce, interest rates or costs,’ Ms Wood said.

Other Albanese government housing policies, such as Help to Buy and Build to Rent, have been targeted at getting first-home buyers on the property ladder and ensuring people can find affordable rentals.

Labor also announced on Sunday a two-year ban on foreign investors buying existing Australian homes, matching a key opposition housing policy pitched last year.

Like the Coalition’s plan, there are exemptions for foreigners looking to invest in projects with more than 20 properties, such as apartment towers or housing estates.

Originally published as Property lobby welcomes key report as ‘love letter to better housing supply’