Opinion: Ways to beat the property crisis – if we have the wiles
The following opinion piece by Chancellor, Professor Jennifer Westacott AO, was first published by The Daily Telegraph.
Australians are trapped in a housing crisis. Instead of excuses, blame-shifting and scapegoating, we need a nationally co-ordinated effort to fix the root problems causing housing shortages, housing stress and piling pressure on families.
In the 1990s, an average family home cost about four times the average income. These days, an average house costs seven times what an average worker earns in a year.
The reality is that we have been in a constant and rolling housing crisis for many years because the nation has failed to implement systemic reforms to ensure the housing market works effectively, resulting in a shortage of supply. On top of that, we have failed to innovate in housing policy or housing delivery, which has worsened availability and supply constraints and restricted financing.
Few things are as stressful to families as insecure housing and the monthly struggle to pay the rent or mortgage, often for a home that involves a long commute to work.
We first need to build enough homes to keep up with demand, including making land available and ready. This means rezoning on the edges of major cities.
Other states should look to NSW’s creative reforms with transport orientated developments, which involve high density developments next to infrastructure and services.
Secondly, reforms need to ensure the planning system prioritises fast-track approvals. It simply takes too long to build houses or get approval to renovate existing homes.
Why don’t we have a national approach for developments with a certain number of houses that could be automatically green-lit once they comply with the simplified planning requirements around design, energy efficiency, water and infrastructure?
But the real factor holding us back is the lack of innovation in housing delivery. Why don’t we look to countries like Germany and Canada, which excel in large-scale prefabricated homes? The ones I’ve seen are extremely high quality. We also need to look at mortgage approvals for prefab homes. This would really change things.
Another innovation involves build-to- rent developments, which are purpose-built, large, dedicated rental housing that is usually held in single ownership and professionally managed. We must ensure that build-to- rent creates affordable homes that remain rental properties and affordable to consumers.
And finally, let’s look at how we deliver housing. Why don’t we move to a large scale housing association movement? This would involve not-for-profits charging more affordable rents with secure tenancy.
We have some community housing providers in Australia which could work better if they were allocated the lion’s share of all new social housing and could draw down on loans to create new homes fix existing ones.
In addition, we have to as a country sort out our stamp duty. It really is a terrible tax that prevents people moving, adds to complexity and creates increased friction in the housing system. It must be scrapped.
These are simple and practical ideas to fix the housing crisis. They require us to look to what works in other countries, adopt it for the Australian experience and inject some common sense.
ENDS
15 November 2024
Photo credit: Sally Tsoutas
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