Why Labor’s plans to fix housing crisis will take us nowhere

A pedestrian walks past a real estate agency in Sydney’s central business district.

Talking about housing is an Australian pastime. From the latest market trends to lamenting how difficult it is to buy a home, this has dominated column inches and will be the topic of conversation at barbecues all summer.

Yet the difficult truth for 2024 is that for all the problems with Australia’s housing market, things are only going to get worse in 2024.

There’s a tendency to over-complicate the analysis through a myriad of metrics. In 2023, first home buyers fell to their lowest levels since the Gillard government and loans for the purchase or construction of new homes fell to their lowest levels since the Global Financial Crisis in 2008.

But two stark statistics most simply demonstrate the problems, and why 2024 will be worse.

Firstly, under Labor’s migration system the record level of migration has been completely decoupled from the number of new homes built.

The concept of a planned migration program calibrated to the delivery of new infrastructure, including housing, has been completely junked by Labor.

In 2023, Australia accepted approximately 520,000 new migrants. In that time 175,000 new homes were built. Without even taking account of the new homes needed to accommodate our organic population growth, these numbers tell the grim story.

This gold medal record of migration demonstrates Labor has chosen the sugar hit of migration-fuelled GDP growth over the ability of young Australians to have a realistic opportunity of ever owning their own home.

And notwithstanding Labor’s protestations (obviously driven by the demand of their polling and focus groups), does anyone really believe Labor will do a 180 degree turn and restrict migration to the level of new homes built? Of course not. Even with recent headlines, like “Labor claims migration plan will end Big Australia population boom”, we actually find that Labor intends to increase migration to 1.6 million over five years. This so-called “cut” is up on the record 1.5 million at the time of the budget.

The second major failure of the Labor government which inevitably means 2024 will be worse than 2023 is the number of new home approvals.

The lag effect of these drastically reduced levels of new home approvals means fewer homes will be built just at the time Labor is dialling up migration.

Michael Sukkar

So despite the myriad of media releases and meetings heralded as “game-changers’ by the hapless Housing Minister, the scoreboard shows our housing market going backwards.

Fewer homes being built and even less in the pipeline mean just one thing. Worse affordability and higher rents.

The combination of these two factors, being uncontrolled levels of migration and collapsing new home approvals, mean that buying a home will never be more difficult than in 2024.

Sadly, the Albanese government refuses to even mention first home buyers, instead bragging about handing over more money to the states for social housing projects that rarely, if ever, eventuate.

As Housing Minister, I devised and delivered the Home Guarantee Scheme, initially criticised by the Labor Party. The scheme now supports 1 in 3 Australian first home buyers and is universally praised as a huge policy success. This success is due to addressing one of the most significant challenges faced by potential first home buyers, being access to finance. Most recently and notably described by ANZ boss Shayne Eliott when he said loans had become “the preserve of the rich”.

For this reason (among others), under the Coalition government, first home buyers were better off and encouragingly shows that when governments make home ownership a priority, it can move the dial.

Housing and Homelessness Minister Julie Collins

In combination with the Coalition’s Home Guarantee Scheme, the pandemic era HomeBuilder program contributed to these higher levels of Australian first home buyers. Ostensibly put in place to support the 500,000 jobs reliant on the residential construction industry, the program also gave first home buyers the incentive and confidence to build or purchase a brand new home, adding to housing supply.

So what does this all show? Sadly, if Australians found our housing market difficult in 2023, they ain't seen nothing yet. The Albanese government shows no signs of understanding the problems, let alone seeking to address them.

Our only solace? A future Coalition government with a renewed commitment to home ownership and the runs on the scoreboard, can ensure young Australians have renewed optimism for home ownership in their own lives.

Michael Sukkar is shadow minister for Social Services, the NDIS and Housing and Homelessness.