Developers want PM, Dutton to attack the biggest obstacles to housing: workforce and planning

Policies that don’t take into account the tough time the housing sector has in building new homes are doomed to fail, the industry has warned.

Metricon CEO Brad Duggan has called for a national housing summit. Picture: Richard Walker

Housing policies unveiled by the government and Coalition are unlikely to make a dent in the affordability crisis unless there are further reforms to remove blockages to building and investing in new stock.

Builders and housing experts have warned that the benefits will flow to existing homeowners, and called for the funds to instead be directed towards helping the industry improve the feasibility of delivering new homes.

The country’s largest home builder, Metricon, welcomed the renewed focus on housing affordability, but is calling for a national housing summit to confront the deeper structural issues that are locking thousands of Australians out of home ownership.

“Support for first home buyers is vital, and we welcome Labor’s expanded First Home Guarantee and commitment to build 100,000 homes,” Metricon chief executive Brad Duggan said. “But unless we fix the root causes of the housing crisis — supply, workforce, planning and approval efficiency — we’ll just keep making the same promises every election cycle.”

Mr Duggan said that while Labor’s proposals, like the Coalition’s mortgage tax deductibility policy, would help ease pressure for some buyers, both sides are yet to address the real barrier: the system’s inability to deliver homes at the scale and speed Australia urgently needs.

“We need a National Housing Summit now — bringing together builders, policymakers, developers and financiers to deliver a national action plan,” Mr Duggan said. “We can’t continue to throw money at the problem without reforming how we build, approve and deliver homes across the country.”

Metricon can build homes in as little as 60 days but this is the exception across an industry hampered by labour shortages, outdated construction methods and inconsistent planning systems. Mr Duggan warned that the broader industry could not meet future demand unless there was action on fixing bottlenecks and resourcing the way we build.

Mr Duggan warned the government’s 1.2 million home target was in “serious jeopardy” unless governments worked with industry to boost workforce capability and capacity along with approval timelines. He also called for a housing report card to hold governments accountable for delivery and affordability targets.

“We need real transparency and real consequences,” Mr Duggan said. “There’s no lack of demand. What’s missing is confidence in the system.”

Stockland chief executive Tarun Gupta said the housing crisis required measures which support affordability for first home buyers but he said that solving it would also require the collaboration of all levels of government, statutory authorities and industry in preparing to meet that demand.

“So, while addressing affordability is critical, increasing the supply of housing with the right infrastructure in place, and improving the performance of planning systems are also essential to lift efficiency and deliver affordable homes for Australians,” he said.

He welcomed the major parties proposing serious policies to tackle housing supply and targeted affordability interventions but noted the importance of keeping the sector attractive for large investors.

Mr Gupta said that moving quickly to deliver the homes “will still require substantial funding through both debt and equity markets and an environment that attracts international institutional capital”.

“We encourage all parties to continue to prioritise policies that improve investor confidence in Australia, enable the development of a greater supply of homes and jobs – including appropriate reform – and create a sustainable future for the next generations of Australians,” he said.

Stockland managing director and CEO Tarun Gupta.

Charter Keck Cramer national executive director, research, Richard Temlett, said that policies were well-intentioned but they failed to truly address the costs of developing.

“Both sides are talking about $10bn in funding to assist with getting first home buyers into the housing market. In Charter’s view a more pragmatic solution might be to use these funds to address the costs of delivery crisis,” he said.

This could be through subsidising building materials costs, forgoing GST revenue on new builds or working with the states on waiving fees and charges. Mr Temlett pointed to overseas markets where there have already been changes. “This is already starting to occur in Canada with various cities deferring development charges on their stalled condominium units,” he said.

The firm’s high-level calculations show that the $10bn from could subsidise up to 100,000 dwellings – with a $100,000 subsidy – or even 200,000 dwellings, with a $50,000 subsidy. “This new supply could go to first home buyers as well as investors to rent out to key workers,” he said, encouraging state governments to contact federal decision-makers to work with them on the costs crisis.

REA Group economist Angus Moore said there had not been additional information released about how the $10bn would be spent on new homes. But said the measures that had been proposed could have cascading impacts beyond first home buyers.

“If those 100,000 homes are new homes that otherwise wouldn’t have been built, it will help make housing more affordable broadly as we improve the supply of homes,“ he said.

“However, that would be true regardless of whether they were restricted to first-home buyers or not. That’s where details and implementation are really going to matter, and it’s just not something we can know until we see it in action,” he said.