Australian businesses are pushing governments to tackle challenges in the housing sector
Australian business leaders are urging the federal and state governments to prioritise a comprehensive reform agenda to tackle the ongoing challenges in the housing sector.
These challenges include the chronic shortage of land and housing, planning and tax issues, and soaring construction costs, according to a report by The Australian.
Julie Coates, the CEO of CSR, a leading building products company, emphasised the need for reform across various areas to address the housing supply constraints in Australia. These constraints range from zoning, planning, and approval processes to land supply, labour availability, and infrastructure provision.
“Government has a role in building houses to help remedy the housing shortage, but it’s housing affordability that is a potential disrupter for our business,” Coates told The Australian. “Land release bottlenecks, lengthy approval processes, trade labour shortages and population growth all play into the housing affordability equation and government policy is integral to the solution here too.”
Campbell Hanan, the CEO of Mirvac, stressed the need to unlock much-needed housing supply in Australia. He pointed out that projected new apartment starts in 2024 are at the lowest on record, exacerbating the housing shortage.
The Australian building sector, valued at $360 billion, is bracing for another challenging year, with an increase in insolvencies predicted due to the lingering impact of the COVID-19 pandemic, The Australian reported. Construction-related company collapses accounted for about 27% of insolvencies in 2023, putting additional pressure on the construction sector.
Elliott Rusanow, the CEO of Scentre, which operates major shopping centres under the Westfield brand, supports population growth but emphasised the need for governments to take action to address housing needs, according to The Australian.
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Owen Wilson, the CEO of REA Group highlighted the importance of delivering affordable housing for the well-being and future prosperity of Australians. Wilson emphasised the inadequate supply of housing, particularly in the rental market, where vacancies are at historical lows and rents are increasing rapidly.
“We must make owning rental properties attractive for investors. Landlords are continuing to leave the market and are not being replaced by enough new investors,” Wilson told The Australian.
“Governments need to ensure that property investment is an attractive proposition for mum-and-dad investors as well as institutional investors. And they need to avoid knee-jerk reactions to the rental crisis, such as rental freezes and higher land taxes, which only drive landlords out of the market.”
Wilson also suggested that governments reevaluate stamp duty and deliver tax reforms that encourage mobility and new supply in the housing sector, The Australian reported. He cautioned that higher interest rates targeting inflation should be carefully managed to avoid increasing mortgage stress or deterring investment in new rental properties. Additionally, he emphasised the need for targeted infrastructure investment to prevent construction costs from spiralling out of control.
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