Australia needs to maintain its current record-breaking rate of housing construction if it is going to successfully and affordably house it rapidly growing population, according to a new report from the HIA.

The report, titled ‘Housing Australia’s Future’, presents a number of scenarios for population growth and wages growth, and estimates how many new homes will be required to avoid worsening Australia’s housing affordability.

Source: HIA Economics.

“Australia needs to build in more than 230,000 homes every year if we are to address our current housing affordability challenge,” said Tim Reardon, HIA’s Principal Economist.

“Over the past 15 years Australia’s housing market has been dominated by a persistent undersupply of housing,” he said. The RBA, the Productivity Commission, and federal and state treasuries acknowledge that undersupply is the key cause of the country’s affordability challenges, says Reardon.

“In 2016 Australia built a record number of 230,000 new homes and we will need to maintain this rate of annual supply for the next thirty years, if we are to meet future housing needs,” he said.

“Housing affordability will not be solved by amending negative gearing, capital gains tax or imposing punitive charges on foreign investors,” said Reardon.

“Meaningful action needs to include all three tiers of government, working with industry, to ensure the delivery of affordable residential housing,” he concluded​.

htw-month-in-review-april-2019 residential-1 by @GillandDebello #family #finance

The Housing Industry Association has accused Labor of “setting the bar too high” with its proposed changes to skilled migration visas.

Proposed changes to the skilled working visa will not address the bigger problem of how to fill the shortage of skilled tradespeople available to build new homes and apartments, according to HIA.

Labor announced on Tuesday morning that, if elected, it would tighten the temporary skilled migration visa scheme, which was brought in by the government to replace the scrapped 457 visa.

The plan involves stricter rules around businesses having to prove they have tried to fill the job with an Australian worker, a higher wage threshold for the skilled visa and a new test to ensure that the use of a visa will also help to train local workers.

But HIA Manager Director Graham Wolfe said the focus of any reforms should be on creating a new visa category for skilled worker that is not bound to an employer but can operate as a trade contractor independent of a single employer.

“The housing industry is more vulnerable to skill shortages than many other industry sectors due to an ageing labour force, the physical nature of work, the ongoing demand for new housing and the often cyclical nature of activity,” he said.

“The current visa models simply don’t suit the housing industry’s long-accepted approach to doing business which relies heavily on the efficient and affordable model of independent contracting.”

Labor’s announcement comes after a senate inquiry was set up at the end of last year to into the effectiveness of the current temporary skilled visa system in targeting genuine skills shortages, the findings of which were released last week.

As one of the bodies to make a submission to the inquiry, HIA Executive Director Skills and Industry Development Harley Dale told WILLIAMS MEDIA they would welcome any opportunity to engage with either political party regarding domestic skills and training.

“We recognise there is a justifiable place for overseas labour plugging gaps from time to time and our view is that Labor is setting the bar too high in terms of allowing businesses and sub-contractors to source that foreign labour if there is a genuine need,” he said.



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