Housing Affordability and Supply in Australia – what’s the deal?

We’re happy to see the national spotlight put on the housing affordability crisis in this country. But, if we’re perfectly honest, we greeted the news of yet another inquiry into housing with some scepticism and weariness. Our CEO, John Engeler, shared this view with City Hub late last month.

Image credit: Daniel Lo Surdo, City Hub

The Federal Parliament House of Representatives Standing Committee on Tax and Revenue, chaired by Jason Falinski MP is looking into Housing Affordability and Supply.
We don’t disagree with the Chair’s views that housing unaffordability is deeply damaging and concerning but we do have very different positions on the causes of the crisis and credible solutions.

In our view, the private housing market in this country has moved a long way from what many would say it its essential purpose – to provide secure, functional and affordable shelter to all people at various stages of their life. That market is now distorted by a variety of financial and taxation incentives; driven by quite predictable and rational commercial and speculative investment motivations.

Unless and until the fundamentals of the housing system are changed – moving away from its overhyped, supercharged state back to its original purpose, we say that Governments need to step in to build or acquire housing for people who need it. In NSW we need 5,000 additional social dwellings every year for a decade, just to catch up.

Frustratingly, the inquiry’s Terms of Reference and media statement don’t even mention the role of government in adding to the supply of affordable housing across the country.

One helpful by-product of the inquiry has been to draw out comment from numerous academics, commentators and even the Minister for Planning & Public Spaces Rob Stokes MP (see SMH article). Together these commentators have challenged some of the narrow and somewhat simplistic explanations for the flaws of the housing system including the strong position by many that it is the planning system holding up the supply of housing (and therefore affordability). 

Our members and supporters are encouraged to familiarise themselves with these arguments. When we eventually get back to backyard BBQs it would be great to have some of these alternative explanations at your disposal!

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