The Australian Housing Crisis: How Can We Really Fix This?

The conversation surrounding the Australian housing crisis has been going on for years. However, the truth is, the problem has not shown any signs of going away. In fact, it’s getting more serious.

A recent report from The Guardian has revealed that there has been a surge in sheltering services with over 1,600 people have been pushed into homelessness each month. According to Homelessness Australia, between December to March 2023, an increase to 7.5% across Australia for the said services have been recorded. That’s 6,658 people who sought for help. Cities such as Queensland, Western Australia, and New South Wales, have been shown the biggest rise in demand.

Sadly, about 74% of those are women and children.

Prime Minister Anthony Albanese has issued a statement that the government targets to build more houses under the National Housing accord plan will be pushed to 1.2 million homes, which is definitely such a huge step for the industry. However, the challenge of achieving this goal is very much palpable.

According to the Housing Industry Association, building 1.2 million homes starting in July 2024 should have a run rate of 240,000 housing per year for the next five years – unfortunately, this pace has never been achieved. The closest to this rate took place within the 12 months starting June 2016 with 234,910. So far, figures show that the total over the year to March of last year was 179,266. So, unless changes will be made, experts predict that Australia will fall short of that 1.2 million homes target.

So, what can we do? How can we really fix this?

Government Approaches

One of the biggest pitfalls of the building industry over the past year is the soaring costs of materials, thus leaving a lot of builders broke. There’s also the matter concerning interest rates, and the uncertain economic outlook due to the events transpired these past couple of years. These factors have scared off many investors and builders, which makes it important that the government will have strict approaches to support them.

Prime Minister Albanese has promised in a recent cabinet meeting that states and territories would take aggressive steps to zone and develop approvals in order to free up the land that will be needed to reach and deliver on the said target.

The medium-density housing factor

The height limits in a lot of suburbs have been contributing to the problem. In order to deliver the target number of housing, medium-density developments are needed in areas that have existing infrastructure in order to support growth. These developments are also ideal in locations with employment hubs.

Experts have said that the challenge to deliver the target number of homes over the next five years will require the government to take care of the infill solutions and build new communities in order to provide more housing opportunities.

Issues with labour supply

The construction industry’s long-standing labour supply will have to face yet another challenge with the said target. In order to meet the housing target, allocation of finite sources must be prioritised. Employing more workers is key in making this happen, since they are the backbone of this industry.

The housing issue in Australia and homelessness goes hand in hand. While renting will be the first option for a long of homeless people, but without enough housing supply, homelessness could be extremely difficult to solve. What builders must understand is that renting will be a lifelong tenure for many Australians and while they will still face significant problems such as asserting their rights, having a roof over their heads is more than enough to keep them going and that would ultimately change their lives.

SOURCES:

https://www.theguardian.com/australia-news/2023/aug/03/more-than-1600-australians-pushed-into-homelessness-each-month-as-housing-crisis-deepens-report-finds

https://www.commercialrealestate.com.au/news/the-big-challenge-of-fixing-australias-housing-crisis-2-1230881/