Financing Housing Supply

Housing supply

Overall, Australia has a shortage of housing. There was a shortfall of around 284,000 dwellings in 2011; the rise (and ageing) in Australia's population and falling household sizes are expected to make this issue worse. 

But this is much worse when we look at the supply of housing that is affordable and available to low income households.  In 2009-10, the shortfall was 539,000 dwellings.  In NSW it is between 73,600 for very low income households and 130,000 all lower income households.  The result is housing stress, overcrowding and homelessness.

Financing housing supply

However, the approach to financing housing in Australia has made matters worse. 

Since the 1990s, through a combination of financial deregulation, ‘negative gearing’ tax opportunities to write off losses against other income, and capital gains tax depreciation have combined to make new residential investment predominantly speculative and short term.  This has pushed house prices up to among the highest in the world, doubling (in real terms) in the past 15 years.

For renters, this has meant growing competition for lower cost properties, increasing rents and insecure tenure.  Almost half low income households are in housing stress.

The major source of investment in affordable housing – social housing – has stalled with net losses in supply of social housing.  And the only tax incentive to stimulate investment in affordable housing and ensure that low and moderate income households get in, the tax-incentive for developing affordable housing (NRAS), has been discontinued.

Shelter and housing supply

Shelter advocates for:

  • Increased public investment in increased social housing
  • investment to increase the supply of affordable housing
  • ways to encourage long-term investment in private rental housing
  • changes to the tax and subsidy arrangements to reduce speculative investment fuelling house price inflation
  • Social impact investing
  • Leveraging affordable housing for growth
  • NRAS in NSW
  • Capital value uplift & affordable housing

Recently we have produced briefs on:

  • The cost of increasing social and affordable housing supply in New South Wale
  • Social impact investing
  • Leveraging affordable housing for growth
  • NRAS in NSW
  • Capital value uplift & affordable housing