Can the housing supply crisis be solved?

Andrew Leigh, Assistant Minister for Competition, Charities, and Treasury has said that the government should train more Australians to become construction workers to address the housing supply crisis.

In the Australian Broadcasting Corporation’s (ABC) latest Q&A episode, Home ownership, homelessness, & housing supply, on 25 March, Leigh noted: “My priority would be to be training Australians to do the job.”

Leigh suggested that targeted skilled migrants should be brought in to support the current housing supply crisis and that the government should bring in “as many of those skilled workers as the industry says we need”.

Indeed, Build Skills Australia – the job and skills council established by the federal government – revealed that 90,000 tradespeople would need to be brought into Australia in the next three months to meet the government’s housing targets.

While he acknowledged that skilled migrant workers should be brought in, he maintained that training Australian workers should be the priority.

He said that even though there would be a lag effect while new workers are being trained, bringing in skilled migrants would also have a lag effect on housing supply meeting demand.

“There’s going to be a lag in both of those,” he said.

Other solutions raised to address the housing undersupply included increasing housing density.

For example, Andrew Bragg, shadow assistant minister for home ownership, said that medium-density expansion was “the only way we’re going to solve the problem in the big cities”.

He pointed out that Australia was not building enough homes for future generations. He said: “For every four people we bring in, we only build one house”.

He continued that this would make it “very hard for us to house our children”.

Meanwhile, Rose Jackson, NSW Minister for Housing and Homelessness, highlighted that more government funding was needed to support home construction, stating: “We want to see the National Housing and Homelessness agreement double its contribution from the Commonwealth to the states.”

The National Housing and Homelessness agreement has said that it will provide $1.7 billion in funding to the states in the 2024 financial year (ending 30 June 2024) as well as a further $67.5 million to support current homelessness challenges.

Jackson also stated that the current housing crisis was not only a result of housing supply shortages. She said: “I don’t think it’s just a supply issue. I don’t think it’s just a tax issue. I don’t think it’s just an Airbnb issue. I don’t think it’s just a planning issue.”

Jackson continued that all facets of the housing supply issues “[had] to be on the table”.

She also said that “[the states] would have to lift as well” when speaking on funding contributions to housing construction.

Accessing super to fund mortgages

Speaking on the Liberal Party’s proposal to allow Australians to access their super to fund a house deposit or contribute to their mortgage, economist Cameron Murray told the ABC show that he supported the policy.

He said that the introduction of such a policy would “not increase house prices” like the first home buyer grant did as it is not “free money” for consumers to use at their discretion.

The Super Members Council (SMC), however, said that the introduction of a policy that allows Australians to withdraw from their super could drive up house prices by up to $75,000 across the capital cities.

The Association of Superannuation Funds of Australia (ASFA) chief executive Mary Delahunty said that accessing super would only benefit young people who are already in a better financial position and would not solve the supply issue Australia is currently facing.

The ABC asked 6,300 of its listeners if they supported the super withdrawal policy, with 59 per cent answering no, 32 per cent answering yes, and the remaining 9 per cent being unsure.

The Mortgage Business Uncut podcast delved into the positive impacts of medium-density expansion on housing supply issues in the capital cities.

Phillip Tarrant, director and co-founder of Momentum Media, said that medium- to high-density expansion “needs to happen” due to the expensive nature of infrastructure.

He explained: “We can’t just keep building highways and freeways and railways out further into the regions.

“What needs to happen is that we need to infill that because you get all the benefits and scale of that money spent on infrastructure.”

Find out more about the continuing housing supply issue and the top themes impacting the mortgage market in the latest Mortgage Business Uncut podcast.

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[Related: LATEST PODCAST: Unpacking the housing supply issue]