The Property Council of Australia has enthusiastically welcomed Treasurer Jim Chalmers’ announcement of a $900 million productivity fund to boost housing supply across the nation.
This initiative will incentivise states and territories to streamline building approvals and implement crucial housing reforms.
Property Council Chief Executive Mike Zorbas emphasised the critical nature of this fund in addressing the current housing crisis.
“This housing crisis demands we pull every lever, and making our planning systems fit for purpose is the golden lever,” Zorbas stated.
He highlighted the significant challenge facing state premiers and planning ministers in tackling housing supply issues.
The concept of linking incentives to national housing targets isn’t new for the Property Council.
They first proposed this idea in the mid-2000s, followed by a comprehensive 2016 report Federal Incentives for Housing Supply authored by Professor Ian Harper AO.
This report suggested a National Competition Policy for housing that could potentially boost supply within three years.
Zorbas pointed out a stark statistic, stating: “We would have 1.3 million extra homes today if our planning systems retained the efficiency they had in the 20 years before 2001.”
This underscores the urgent need for reform in planning systems across the country.
The fund is expected to address multiple aspects of the housing crisis:
- Rewarding innovation in housing supply at state and local government levels
- Boosting last-mile infrastructure
- Addressing investment-hindering taxes that reduce affordability
- Supporting the development of prefabricated and modular homes
Zorbas also stressed the need for “large-scale supply chains, substantial investment and regulatory reform” to advance industrialised construction in Australia.
The housing market currently faces numerous challenges, including high financing costs, increased household formation, immigration pressures, rising material and labour costs, and decreasing construction productivity.
The Property Council believes this fund could be instrumental in overcoming these hurdles and significantly boosting housing supply across Australia.
Dr Maxwell, an industry expert, while welcoming the investment, cautioned that traditional building techniques alone won’t suffice.
“Industry support through regulatory reform, skills and capacity growth, and cultural change is necessary to execute projects through modern methods of construction,” Dr Maxwell stated.
The expert also stressed the importance of balancing the housing crisis response with industry carbon reduction goals, calling for innovation to drive productivity.
Dr Maxwell highlighted the need to prioritise build quality, design flexibility, and community benefit in implementing new construction methods, warning against repeating international failures in modular building.
As the Australian government takes this significant step towards addressing the housing shortage, the Property Council and industry experts remain cautiously optimistic. They emphasise the need for comprehensive reforms and innovative approaches to truly transform the housing landscape.
