There is an exceptionally high level of residential building underway, and the pipeline implies that a high level of activity will be sustained throughout 2022. The number of new homes that commenced in 2021 was comparable to the all-time high recorded in 2016 the HIA has stated in its submission pre-Federal Budget. Source: Timberbiz
Yet this cycle differs from the 2016 cycle in that activity is driven by a record volume of detached house construction which is geographically dispersed rather than a boom in capital city apartment construction.
This spike in demand for new homes has exacerbated many of the supply side issues that have perpetually challenged the industry. Disruptions to international supply chains and domestic and international freight have presented additional challenges.
The industry is set to face further challenges in 2022 as substantial changes to the National Construction Code are scheduled to be adopted. Changes in consumer spending patterns in response to COVID related restrictions, newfound ability to work from home, supported by fiscal and monetary policy settings has revealed Australia’s underlying demand for housing.
People have sought more ‘breathing room’ with some households seeking larger homes, others moving out of cities to regional areas while others reduced the number of people in the household and created new households.
This has been a marked shift in the housing market dynamics during COVID. Vacancy rates remain low despite the halt to overseas migration and high level of home building. The Australian government should take a leading role in reviewing the nation’s housing supply strategies taking account of these changes.
Housing affordability has deteriorated further over recent years which is the enduring legacy of the past policy failures that have impeded the efficient supply of housing over several decades. The Australian government must have the ambition to set the country on a path to make sustained improvements in housing affordability and ensure that home ownership is an attainable aspiration for all Australians.
This HIA submission presents a series of recommendations that would enable the Australian government to correct these past failures. In order to supply Australians with the housing they need, the housing industry requires an appropriate supply of land for housing, reform to inefficient taxes, equitable access to capital, a well-trained workforce and an efficient supply chain.
You can download the submission here:HIA Federal Budget 2022 (1)