Pressure mounts on Albanese to make good on housing targets

Initiatives that support housing supply 'desperately needed' says CoreLogic's Tim Lawless

Pressure mounts on Albanese to make good on housing targets

Australia’s two major political parties have now soft launched their election campaigns, with LNP hopeful Peter Dutton testing the waters of the electorate with a pre-election pitch to voters in Melbourne on Sunday.

Pledging a “last chance to reverse the decline”, Dutton’s speech followed Labor prime minister Anthony Albanese’s three-state tour last week, when he warned of “taking Australia backwards” should Dutton be voted in. Both parties, seemingly, are concerned about their opponents’ regressive political stances.

Dutton has channelled US president-elect Donald Trump’s MAGA movement with the Coalition’s “Let’s get Australia back on track” slogan (albeit making for a less-optimal LGABOT acronym) while calling out Albanese as “one of our weakest prime ministers in history”.

Albanese, in response, shrugged Dutton’s pre-election foreward off as “the biggest damp squib done by any political leader to begin a political year in an election year that I have ever seen”.

While the rhetoric on both sides has amped up, stakeholders and experts are hoping for a clearer policy roadmap from both sides of the political spectrum.

The housing crisis, for instance, has played second fiddle to emotionally charged political touchpoints such as nuclear power (yay from Dutton, nay from Albanese) and government spending (nay from Dutton, yay from Albanese).

But this could soon change, reckons CoreLogic’s research director Tim Lawless.

Housing affordability to the fore

“With national housing affordability metrics either at new or equal record highs for unaffordability, I think we will see housing as one of the most hotly contested areas of policy leading into the federal election,” Lawless told MPA.

“Initiatives that support housing supply are desperately needed, given the cumulative undersupply of newly built housing that has accrued over the past few years,” he added.

Lawless said supply-side policies, such as more funding to cover housing infrastructure costs and social and community housing builds, alongside strategies to address skilled worker shortages, should be given proper attention.

But both parties will be expected to perform a fine balancing act in more ways than one. 

“Balancing spending on big infrastructure projects with the need to facilitate more housing supply is also likely to be a feature of policy platforms,” said Lawless. Pressure to reduce net migration while maintaining a robustly skilled workforce is also expected to pose a challenge.

What do we know so far?

Dutton hopes to unlock 500,000 new homes through lighter-touch regulation (including a 10-year freeze on further changes to the National Construction Code); a two-year ban on foreign investors and temporary residents purchasing existing homes; a “rebalancing” of immigration numbers (including a reduction of foreign student admissions); and a new policy that will allow first-home buyers to access up to $50,000 from their super to buy a house.

Lawless offered a word of caution on the final note, stating: “Policies like super for housing may be appealing to voters looking for a financial boost to access the housing market, however history shows that demand-side incentives like this tend to simply push housing prices higher rather than address any of the underlying causes of housing unaffordability.”

Dutton has also thrown his weight behind a $5 billion infrastructure fund.

The ball is now in Camp Albanese’s court. His first term’s housing policy has been centred on creating affordable homes under the $10 billion Housing Australia Future Fund and the $2 billion Social Housing Accelerator.

But Albanese faces pressure to bring more to the table as this election heats up. Although he has reaffirmed his commitment to building 1.2 million new homes by 2029, the data is less than flattering.

Private house approvals fell for the second month in a row in November 2024, largely due to a washout in the apartments segment.

While broader trends point to a low-single-digit increase in new dwellings, many economists have warned that the trend is insufficient to match Albanese’s bullish target.

In the forebodingly titled research piece Housing market: lots of pain, not much gain published last October, Deloitte macroeconomist Stephen Smith said Albanese’s 1.2 million new homes target “is looking less feasible by the day”.

Property prices, too, have started to cool following 21 months of consecutive growth, although the general consensus points to more of a momentary blip than a genuine trend.

As Eliza Owen, head of research at CoreLogic, recently said: “There’s too much of a gap between where market values are and where people can afford.”

With a date yet to be set, it is still early days in this Aussie election cycle, but it’s clear that housing is shaping up to be a key battleground issue in the months ahead.