Prime Minister Anthony Albanese is reportedly seeking to ink a housing accord at this week’s National Cabinet similar to the housing accord the Rudd Labor government struck with the states 15 years ago.
Faced with a similar housing supply and affordability crisis, the Rudd government announced a slew of measures in conjunction with the states in 2008.
They included cash grants from a $30 million Housing Affordability Fund to local councils to expedite low-risk development applications, the establishment of a Council of Australian Governments (COAG) process to clear infrastructure planning and provision impediments, and the National Rental Affordability Scheme (NRAS), which paid or provided tax offsets to property owners who leased out new homes at 20% below market rates.
“You can’t make an announcement today and have the housing crisis that’s built up over a decade fixed tomorrow”, Albanese said.
“It’s one of those things where you don’t have a single solution because it’s been built up over a long period of time”.
“We do need changes to planning and all of the state and territory governments”.
In 2008, Australia was facing record high levels of net overseas migration (NOM), which had driven the rate of population growth well above the nation’s housing supply:
As shown above, we didn’t get a supply response until 2013 when dwelling construction boomed to record levels; albeit not by enough to house the unprecedented immigration inflows between 2005 and 2020.
Now we have history repeating with the Albanese Labor Government ramping immigration to fresh all-time highs.
The May federal budget upped Australia’s NOM projection to 400,000 in 2022-23, 315,000 in 2023-24, and then 260,000 each year from 2024-25. This terminal 260,000 NOM is 25,000 higher than projected in the 235,000 Intergenerational Report:
With Australia’s population projected to grow like an out of control science experiment, Anthony Albanese is now pimping the same types of housing supply policies that failed to keep pace with lower levels of immigration under Kevin Rudd.
The solution to Australia’s housing crisis is so obvious even Blind Freddy can see the answer: reduce NOM to levels commensurate with the nation’s ability to supply good quality and affordable homes as well as infrastructure.
Historical levels of around 100,000 NOM should be the target. Such levels worked well for Australia before NOM was recklessly more than doubled from 2005 (see above chart).
Otherwise, Australia will face permanent housing shortages, soaring rents and rising homelessness because housing demand (via immigration) will always outstrip supply.
