REA Group chief executive Owen Wilson: Housing can’t be a luxury – the supply needs to be built up

REA Group chief executive Owen Wilson explains why all levels of government must act to safeguard housing affordability and the great Australian home dream.

Home ownership has long been a cornerstone of the great Australian dream, yet over recent decades, affordability has deteriorated to levels not seen before.

Amid rising interest rates, escalating construction costs, and increasing house prices, the disparity between those who own homes and those who don’t, continues to grow.

The pervasiveness of the affordability and accessibility problem is demonstrated in the new PropTrack Housing Affordability Index, with first-home buyers disproportionately affected by current market conditions.

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To highlight the scale of the problem and its rapid escalation, a typical-income household earning $105,000 per year, could afford to buy around 40 per cent of homes in 2020 and 2021; today, they could afford just 13 per cent.

If we want to improve affordability sustainability, we have to build homes.

In August, National Cabinet agreed to build 1.2 million well-located homes over the next five years.

The focus on increasing housing supply is a welcome step forward, and the announced incentive payments add substance to the ambitious target.

REA Group chief executive officer Owen Wilson. Picture: NCA NewsWire /Luis Enrique Ascui.

A house auction with several would-be buyers. Picture: NCA NewsWire/Dylan Coker.

However, 1.2 million homes will barely cover Australia’s growing population over that period.

We need to do more. Residential building approvals have hit their lowest level in a decade, while new low-rise apartment blocks are nearly non-existent and medium-density development has not kept pace with Australia’s growth.

Further reforms are necessary to encourage investment and support fast and effective development.

At a minimum, we need to streamline planning to fast track more medium-density housing.

Inner-city areas have seen increases in density over recent decades, but it’s the middle- and outer-rings of our cities that must catch up.

National Cabinet has agreed to build more than 1 million new homes across Australia in the next five years.

Regions that are well serviced by public transport and local amenity should be key targets for higher density, as well as additional funding to improve local amenity.

Other levers such as taxation are also important.

Stamp duty in particular is an inefficient and unreliable tax and together with many others in the community we have been calling for its removal for some time.

Mortgage stress is affecting more and more Australians as the cost of living rises.

It further worsens affordability by discouraging people from moving to homes that better suit their needs, and makes it even harder for first-time buyers to save a deposit.

While solving Australia’s housing supply and affordability challenges is a complex issue, momentum for change is growing rapidly.

Now is the time for all levels of government to act so we can safeguard housing affordability and our Australian way of life for current and future generations.

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