Industry and government seek solutions to housing supply bottlenecks at national economic reform roundtable
Australia’s productivity commission chair has cautioned that accelerating home construction will not be straightforward, as policymakers, business representatives, and union leaders gather in Canberra this week for an economic reform roundtable focused on a range of issues, including housing.
The agenda includes discussions on reducing regulatory barriers, with participants highlighting the impact of planning and approval processes on the pace of new housing supply.
At the National Press Club on Monday, Danielle Wood (pictured), chair of the Productivity Commission, said recent research showed the time needed to complete residential projects has increased significantly over the past decades.
“Recent productivity commission research found the time taken to build houses and apartments has grown by 50% over the past 30 years,” said Wood, who is attending the roundtable. “It’s not the time laying bricks that’s blown out, it’s the approvals processes from planning to heritage to building approvals.”
Wood noted that while governments have introduced new regulations to improve building standards, these measures have also contributed to longer and more complex approval pathways.
“Heritage and density restrictions can prioritise preserving a version of local amenity at the expense of more and cheaper housing,” she said. “Ever more stringent requirements for energy efficiency in the construction code prioritise small future energy savings over making it fast and cheaper to provide housing.”
Ahead of the roundtable, nearly 30 business and industry groups, including the Property Council of Australia, Housing Industry Association, and Master Builders Australia, called for reforms to streamline planning and approvals. The federal government has also indicated a willingness to address regulatory barriers, despite having a role in setting some of the rules.
Governments face mounting pressure to address housing affordability, with more Australians viewing home ownership as out of reach. The PropTrack Housing Affordability report from September found affordability at its lowest level on record, with households across income brackets able to purchase a smaller share of homes than ever before.
Angus Moore, executive manager of economics at REA Group, said the home building sector has encountered significant obstacles in recent years. “Since the pandemic started, it takes a lot longer to build homes,” he said.
“Input costs have increased enormously, construction labour has been hard to find, and the build times have blown out. All of those factors have implications for the cost and ease of delivering the homes that we need, so finding ways to speed that up would certainly help us improve housing affordability.”
Rental affordability has also declined, reaching its lowest point since at least 2008, according to the PropTrack Rental Affordability Index released in March.
The economic reform roundtable runs from today to Thursday, bringing together leaders from government, business, unions, and other sectors to discuss solutions to Australia’s productivity challenges.
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