COMMENT: The stories coming through from regional Australia and the housing crisis are hair raising. Such as, multiple investors scouring the internet for property sales, buying up places sight unseen, and jacking up rents immediately after.
Why? Because they can. Because demand is so high. So there goes the dream of those quiet country towns where we might escape the manic big city race.
What the federal Treasurer Jim Chalmers might do with the upcoming budget might switch that around very quickly, if he has the ticker to go through with the radical revision of taxes that have for decades favoured investors over homeowners.
In Melbourne, Victoria’s higher investor taxes worked – they’ve driven investors away, allowed prices to ease and fall in some cases, making it easier for people to buy houses but paradoxically harder to find rental homes.
In so many ways, real estate is a numbers game, whether in terms of supply, finance, or now, the increasingly scary prospect of even faster rising construction costs, thanks to the energy crisis. It’s just that it’s not a single set of numbers that counts, as some quarters of the debate will have us believe – supply alone.
So when we heard from HIA chief executive, industry and policy Simon Croft, who was recently a speaker at TFE’s Codes Red debate, that his outfit on Tuesday held a housing roundtable at Nowra on the NSW South Coast, we were pleased that this behemoth of a housing lobbying force, HIA, was on the case for the regions.
The roundtable was designed to find a way to ease supply pressures outside of capital cities.
The roundtable decided we needed a national placed based approach to solving the problem, and that housing needed to be treated as critical infrastructure.
Bingo. Our thoughts entirely. Infrastructure that’s every bit as critical and urgent as any other infrastructure – roads, bridges or trains.
Because without people feeling safe enough to run the economy and populate our society, there won’t be much left to worry about.
And guess what, it seems the roundtable had the same idea.
It’s a surprisingly urgent problem that many people may not have seen coming.
As Croft noted in a media statement after the roundtable, regional NSW was “absorbing a significant share of Australia’s population growth”.
In Nowra’s Shoalhaven region, population growth was being driven by people seeking affordability, lifestyle and employment opportunities outside major capitals.
The results have been “housing shortages, severe rental constraints, rapidly rising rents and house prices that are increasingly disconnected from local wages.
“Essential workers are struggling to secure rental accommodation, young people are being priced out of their own communities, and local businesses are finding it harder to attract staff because people cannot find a place to live,” Croft said.
Yet, despite all this, investment and policy are heavily skewed towards capital cities.
Compounding pressures that limited new housing delivery in the region are the same as in cities – rising construction and finance costs, ongoing labour shortages, fragmented planning systems and lengthy approval delays that continue to undermine productivity.
The solution can therefore not be a “one size fits all”.
What would work is “long term, coordinated national response that recognises the distinct challenges facing regional, rural and coastal communities”.
Croft said a dedicated national housing plan must set “place based targets for regional areas, support housing supply beyond capital cities, reduce barriers constraining construction productivity, and better align housing investment with infrastructure, health, education and workforce planning”.
But, in our view, how about we cut to the chase and get the Feds to do the job itself. The big difference will be the scale of delivery that a national agency can build, along with the skills development that typically feeds out to the private sector, the ability to source finance at cut rates (it’s the government after all) and the absence of the huge profit margins that are typically demanded by financiers for private sector work.
Everyone still gets a job, but on a fee-for-service basis.
What’s wrong with that? We used to do it. We can do it again.