How building more houses will create a more prosperous state

These six young professionals all migrated to SA for lifestyle and career opportunities. But without more housing, a leading economist says our state can’t fulfil its potential.

Six young professional migrants explain why they chose to make South Australia their home. (Left to right) Paula Mesa (Argentina), Francesca McMillan (USA), Yevgeniy Beylkin (UK), Nicola Stelfox (UK), Jess van Raay (Melbourne) and Kirti Verma (India). Picture: Naomi Jellicoe

South Australia needs to boost supply of affordable housing or risk missing out on attracting new businesses, investment, jobs and students, says a leading UniSA economist.

Dr Susan Stone, the Credit Union SA chair of economics, said buying and renting homes in Adelaide and SA was affordable compared to the rest of Australia, but expensive compared to the rest of the world.

Dr Stone, who moved to SA last year from a Paris-based OECD position, acknowledged people wanted to protect the state’s enviable lifestyle and environment.

“But if you want to do things like try to attract more foreign investment and these things, you’re going to have to make housing more affordable and the way you do that is increased supply,” she said.

Credit Union SA chair of economics Dr Susan Stone. Picture: UniSA

Dr Stone said businesses wanting to relocate to Adelaide needed to be able to offer affordable housing.

“You don’t want to have a business that thinks: ‘You know what, I may not open an office in Adelaide and bring in 30, 50, 100 jobs because people can’t find places to live.’ So I think that housing is going to have to be a bit of a leader,” she said.

Similarly, SA universities expecting 1800 students to return from China after being told their degrees would not be recognised if they were completed online has property industry leaders warning of further pressure on Adelaide’s rental market.

“If they get half of the number of students that they’re expecting now that China’s opened and we have a lot of students from India – these are great for South Australia in terms of international students coming in but they don’t have enough beds. We don’t have any place to put them,” Dr Stone said.

“You don’t want these students to say: “I can’t even get a rental. I’m gonna go to school in Melbourne. I’m gonna go to school in Brisbane, I’m gonna go somewhere else’.”

Dr Stone said SA was similar to the US state of Florida, which had an ageing population, good universities and prized lifestyle – but young people tended to leave for work opportunities because the economy was not diverse.

“The more businesses, the more opportunity, the better it is for you and you can get that kind of job that you really want. So there’s more opportunity and jobs,” she said.

“A more prosperous state means that there’s a larger tax base. The larger the tax base, you don’t have to tax individuals as much. If you can expand the tax base, then the government can get the necessary funding without having to increase taxes.

“So a larger base usually means lower fees. It also means there’s just more opportunities in terms of interaction between schools and businesses. More university students will come here because they’ll be able to get jobs.

“I just think it’s a win-win all the way around.”

Originally published as How building more houses will create a more prosperous state