Housing affordability concerns reach ‘record highs’: Property Council

The latest ANZ/Property Council Survey, revealed a 10 per cent jump in the December quarter of industry professionals that rated housing supply and affordability as the top-most priority for both the Australian and state governments to address.

In fact, 41 per cent of 771 property professionals included in the survey for the March 2023 quarter, selected housing supply and affordability as a critical issue for the government.

This comes at a time when affordability for both buyers and renters is deteriorating, with the strong rebound in immigration alongside very low levels of supply exacerbating an already tight housing market.

The results marked the highest level since this survey question was initiated in the September quarter of 2019, and more than doubled the score for industry concerns relating to economic management and energy, environment and emissions.

It comes following recent figures from the National Housing Finance and Investment Corporation (NHFIC) that show a national 79,300 home deficit over the next decade.

The NHFIC report found the combination of a “stronger-than-anticipated” population recovery, following the opening of the borders in early 2022, construction costs and delays, alongside the steep increase in interest rates is exacerbating housing affordability and an already tight rental market.

Property Council chief executive Mike Zorbas said the increase in housing supply concerns comes as “no surprise”.

“Governments can move the housing supply needle by twinning planning reforms with the right investment conditions to support more housing choice for Australians,” Mr Zorbas said.

“Retirement living communities and purpose-built student accommodation have an essential role to play in combating the housing crisis and creating muc-needed choice for Australians.

“These forms of customer-led community provide advantages for residents that are not available in the broader market, including superior amenities and services.”

A recent study by EY, commissioned by the Property Council, found that levelling the tax playing field for build-to-rent investments could result in the delivery of 150,000 rental homes over the next 10 years.

“These results also highlight the urgent need for the Senate to pass all of the Australian government’s legislative agenda on housing to start reining in the worsening supply crisis,” he said.

Property sentiment remains negative

Meanwhile, the ANZ-Property Council survey also revealed Australia’s property sentiment remained negative with the majority of firms continuing to expect increasing costs, higher interest rates and reduced access to finance.

ANZ’s senior economist, Felicity Emmett, said sentiment towards residential property rose a little in the March survey, while commercial property sentiment was unchanged.

“Higher interest rates and a weak economic outlook are clear headwinds to confidence, but strong immigration and low levels of listings are supporting housing prices and residential sentiment more broadly,” Ms Emmett said.

“Ongoing expectations of large increases in costs suggest construction firms are likely to remain under pressure,” she said.

It follows the Australian Bureau of Statistics’ (ABS) building activity data for the December 2022 quarter, which reported that total new dwelling commencements dropped by 6.7 per cent to 41,374 dwellings.

Despite the drop in commencements, total dwellings approved increased by 4 per cent for the month of February 2023, following a 27.1 per cent fall in January, separate ABS data has shown, also indicating a growing backlog in housing supply.

[Related: Building industry reports record turnover]