Why Australia’s housing crisis is expected to get even worse – and correcting it could take years

Australia’s housing crisis will get worse before it gets better and the Albanian government is under increasing pressure to do more to resolve it in next month’s budget, a new report says.

Deloitte Access Economics partner Stephen Smith said the country has not built enough homes to keep up with the record influx of migrants.

Combined with that growing demand, supply was affected as many construction companies went bankrupt due to rising costs, while those that continued to operate faced a backlog of half-finished homes.

“The costs of land, materials and labor will remain at higher levels, while recent bankruptcy figures indicate that builders will need higher profit margins if they are to deliver the significant increases in housing that governments and the community are clamoring for,” he said . the company’s latest business outlook report.

Mr Smith warned that it would take years for these factors to change, meaning the housing shortage and resulting rising property prices and rents will ‘get a lot worse before it gets better’.

The economist was not confident that the government’s target of building 1.2 million homes from mid-2024 would be met, as shown in recent sector forecasts.

Even that amount would not keep up with the record influx of migrants intended to artificially boost GDP.

The worrying state of the housing market has housing industry groups, social welfare advocates and federal independents clamoring for more action before the May 14 budget.

Organizations including the Master Builders Association and the Property Council have teamed up with the Community Housing Industry Association, the Australian Council of Social Services and housing affordability advocates to call on the government to double the size of its future housing fund.

In a letter to Prime Minister Anthony Albanese, the housing alliance said increasing the size of the fund to $20 billion would help the government achieve its housing construction target.

Proceeds from the fund are used to publicly subsidize social and affordable housing developments, with the existing $10 billion fund expected to deliver 30,000 homes within five years.

The peak industry and social support sectors have indicated that rent affordability figures are at ‘the worst levels on record’ (pictured, tenants are queuing outside an inspection

Anglicare Australia wants higher social security benefits, building more social housing and reforming tax breaks for investors, following the damning finding of the latest rental affordability snapshot.

It found that rental affordability was ‘the worst it has ever been’, with just 13.4 per cent of rental properties considered affordable for a family of four with two parents on minimum wage.

Key independent senators David Pocock and Jacqui Lambie have pushed for reform of investor tax rates by removing negative gearing and capital gains tax benefits for those buying rental properties.

Modeling from the Parliamentary Budget Office shows that modest changes could save the federal budget $16 billion over ten years, which they say could be used to build more social and affordable housing.

However, removing such concessions risks preventing people from buying rental properties, which would only worsen the rental housing shortage and push prices even higher.

Housing policy cuts across all levels of government and the Commonwealth has become increasingly active in this area.

The country has launched the Housing Future Fund, is working on a national housing and homelessness plan and is trying to legislate its help-to-buy shared equity program

Housing Minister Julie Collins said the government’s reform agenda was ambitious.

“More help for homebuyers, more help for renters and more help for Australians who need a safe place to stay at night,” she said.

Prime Minister Anthony Albanese has been called on to provide more support for both the construction and social services sectors in the May budget

The Property Council of Australia, National Shelter, the Housing Industry Association, the Community Housing Industry Association, ACOSS, Master Builders Australia and Homelessness Australia want the Housing Australia Future Fund to be doubled to $20 billion in the budget.

In an open letter to the Prime Minister, they are also calling for the publication of the draft national housing and homelessness plan so that the sector can be further involved.

Anglicare Australia’s latest rent affordability snapshot shows the housing crisis is the ‘worst it has ever been’. The social security group is calling on the government to build more houses, reform the tax system and eliminate social security benefits.