Housing experts budget essentials to fix housing crisis

Experts have laid out what should be in the next budget if the government really wants to fix Australia’s housing crisis.

Housing issues and cost of living have become an urgent priority for Aussies ahead of the federal election - and all eyes will be on the federal budget release Tuesday and what it offers to address the problem.

Experts have revealed the critical fixes the Albanese government would need to include in the Budget if it was serious about addresssing the affordability issue:

FIRST HOMEBUYER GUARANTEE

The Albanese government has announced that the budget will include a boost to the Help To Buy scheme, increasing caps from $90,000 to $100,000 for individuals and from $120,000 to $160,000 for joint applicants and single parents.

Property price caps will also be increased and linked with the average house price in each state and territory, not dwelling price, so first home buyers have more choice.

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Demand from home buyers has been heating up again following rate cuts. Picture: Richard Dobson

HIA (Housing Industry Association) managing director Jocelyn Martin said that while these initiatives are encouraging, they must be backed by “broader and deeper reforms if we are to meet the national target of 1.2 million new homes over five years.”

“HIA’s Budget submission highlighted the urgent need for planning system reform and greater investment in key last mile infrastructure. Delays in development assessment and access to build ready land continue to be one of the biggest barriers to housing supply,” she said.

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Experts call for increased support for construction to boost housing supply and affordability.

CONSTRUCTION WORK FORCE SHORTAGES

“Workforce shortages are also holding the industry back. More targeted investment in training and attracting skilled workers into residential construction is essential to lifting output.

“We urge the Government to continue to work with industry on streamlining housing regulation and reducing duplication across state and federal levels — particularly for building approvals, environmental assessments and housing design compliance.”

Ray White chief economist Nerida Conisbee said federal budget measures should include targeted tax incentives for construction businesses, particularly small to medium enterprises, to help offset increasing operational costs and funding for vocational training programs focused on construction trades.

“(This) would address the critical skills shortage that is currently hampering project timelines and increasing costs,” Ms Conisbee said.

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Ray White Group chief economist, Nerida Conisbee, provides insights into what is needed in the federal budget.

“Right now, we don’t have enough people to build the number of homes required to get to affordability.

“An expanded skilled migration program specifically targeting construction professionals is essential to address immediate workforce gaps. The budget could allocate resources to streamline visa processing for qualified tradespeople, engineers, and project managers with construction expertise.”

INCENTIVES FOR DOWNSIZING, INCREASED FUNDING FOR SOCIAL & AFFORDABLE HOUSING

She also supported the expansion of the First Home Guarantee programs as well and called for incentives to encourage older Australians to downsize and free up larger family homes.

“This could include expanding the downsizer superannuation contribution scheme by increasing the contribution limit and lowering the eligible age.

“Additionally, stamp duty concessions or exemptions specifically targeted at downsizers would remove a significant financial barrier that currently prevents many seniors from moving to more appropriate accommodation.”

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Ms Conisbee said incentives for downsizing would help.

Ms Conisbee said there needed to be more support for the 1.2 million homes initiatives including direct funding increases for social and affordable housing components of this program and commitments to more transformative projects similar to the future rail line linking Western Sydney Airport.

REDUCING HIGH CONSTRUCTION COSTS

Master Builders Australia CEO Denita Wawn said strengthening the building and construction industry was essential to resolving the housing crisis.

“The residential, commercial and civil sectors all playing a role in building the communities Australians need, but they have been facing a range of acute challenges that are holding them back,” Ms Wawn said.

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“The Productivity Commission recently revealed the industry is producing half as many homes per hour worked compared to 30 years ago and over the last five years, building costs have soared by 44.1 per cent.

“A federal budget that focuses on tangible measures to lift productivity in the sector and tackle some of the high costs that are causing projects to be delayed or abandoned altogether.

“There have been some good measures announced to date, including incentives for apprentices, national licensing for electricians, and more funding for prefab and modular housing, but more needs to be done.”

NEW HOMES BONUS

The Property Council of Australia is calling for the New Homes Bonus, a $3 billion reward program for jurisdictions that build more homes than their share of the housing target, to be doubled alongside improving its implementation.

Australia is projected to be 462,000 homes behind the 1.2 million new homes in well-located areas targeted by 2029, according to the Property Council.

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Property Council chief executive Mike Zorbas calls for a reworking of the New Homes Bonus scheme. Picture: Martin Ollman

Property Council chief executive Mike Zorbas said reworking the New Homes Bonus scheme can aid the housing target with only a minimal cost to the government’s Budget.

“The scheme should be extended to seven years with upfront payments to support long-term reforms,” Mr Zorbas said.

“Its value should increase to $6 billion, with unspent funds reserved for future housing initiatives. That increase would be just 0.1 per cent of the Australian Government’s 2024/25 Budget.

“We also need to improve the scheme’s transparency through public reporting and highlighting best practice to ensure accountability.

PropTrack economist Angus Moore.

“Three in ten dollars a buyer spends on a new home is governments’ taxes. Any Federal boost would need to be matched by changes to gouging state and territory tax regimes and planning systems to support the delivery of new homes,” Mr Zorbas said.

REA Group Senior Economist Angus Moore said while housing and rental affordability are extremely challenging both sitting at their worst levels on record “the only sustainable way over the long term is fundamentally about building more homes.”

“We’ve seen a lot of focus on that from governments of all levels, which is a great step forward but there’s more to be done.”

Originally published as Housing experts budget essentials to fix housing crisis