Business Council wants housing target tied to population growth

The federal government must set national housing targets tied to population growth and enforce penalties or incentives on states to speed up development, the Business Council of Australia says.

Predictions that Australia’s net overseas migration will explode have sparked concerns the housing crisis gripping the country would only get worse. Picture: NCA NewsWire/Aaron Francis

The federal government must set national housing targets tied to population growth and enforce either penalties or incentives on states to speed up development, the Business Council of Australia says.

It comes after predictions for Australia’s net overseas migration in the next two years exploded beyond what was previously expected, with 400,000 people due to arrive this financial year and 315,000 in 2023-24.

The updated forecasts sparked concern from the Coalition and some advocacy groups that the housing crisis gripping the country would only get worse, thanks to the surge of arrivals from overseas.

In a report released on Monday, the BCA finds there is insufficient supply of new housing being built in comparison to demand and at a time when housing affordability is declining.

Analysis of dwelling completions showed that the current rate of approvals were at their lowest point in a decade.

“We can see that with the exception of a temporary peak of new dwellings related to the ­Federal HomeBuilder program, which ran from July 2020 through to April 2021 … the forward pipeline of projects is significantly down and has been for a number of years,” the report says. “Based on current settings, Australia is not delivering enough new homes to satisfy demand.”

The report finds the housing supply crunch is a “significant issue” for businesses, with workers unable to find suitable and affordable housing close enough to where they work – chiefly the CBDs.

While describing the jump in net overseas migration over the next two years as “a temporary correction” from the pandemic, chief executive Jennifer Westacott said there needed to be a plan to cope with the spike in arrivals.

“There needs to be a clear plan for building new homes and infrastructure that is aligned with the growth in Australia’s population,” she said.

Labor is aiming to build 30,000 new social and affordable housing properties over five years as part of its $10bn Housing Australia Future Fund, but has struggled to get the bill through the Senate.

The BCA called for the creation of long-term national net-additional dwelling targets forecast to population growth.

“This would form the basis for state and territory targets linked to financial incentives and penalties,” the report says.