State governments have been urged to address the “chronic undersupply” of housing if they want to make property more affordable.
The Property Council of Australia said it was encouraging that the states had agreed to form a housing affordability working group at last week’s meeting of state and federal treasurers.
However, chief executive Ken Morrison said housing affordability is not a problem that will fix itself and that all governments must take responsibility for boosting supply.
The Property Council has proposed a five-point plan, which includes zoning more land for housing to allow for extra inner-city density and greenfields development.
Another suggestion is for the planning process to be made more efficient by reducing the complexity of building rules and increasing the speed of assessment processes.
The plan also calls for the federal government to provide incentive payments to the states for achieving best-practice planning reform.
The other two proposals are to review “inefficient and growth-inhibiting taxes” such as stamp duty and to build new road and rail links to bring more housing closer to jobs.
Mr Morrison said all levels of government needed to act decisively to bring much-needed new housing supply onto the market.
“Nationwide, we have seen a 7.5 per cent increase in house prices in the year to March [and] Sydney has seen double-digit growth of 13.9 per cent,” he said.
“The primary reason for this growth in prices in Sydney is a decade of undersupply – we simply haven’t been building enough houses to meet demand – and this has put huge upward pressure on prices.
“Chronic undersupply is only now starting to be addressed, with building approvals hitting record highs. However, supply is still an issue, with Sydney alone facing a shortage of some 190,000 homes within 10 years.”
Treasurer Joe Hockey said after last week’s meeting that the treasurers were alarmed at the inability of young people to be able to access the housing market.
“We had a fairly detailed discussion about how we can increase the supply of housing stock and quite clearly there is work to be done.”