Industry body urges governments to protect housing supply as data centre demand accelerates
The Housing Industry Association (HIA) has called on federal and state governments to ensure that Australia's growing data centre sector does not come at the expense of residential development, warning that competition for land, energy, and infrastructure is already placing pressure on housing supply.
"While data centres may play an important role in Australia's economic future, governments must not lose sight of the country's most urgent challenge – delivering enough homes for a growing population," said Simon Croft (pictured top), chief executive industry and policy at the Housing Industry Association.
"Australia needs both homes and digital infrastructure but the rapid expansion of new data centres should not come at the expense of boosting supply of new housing."
The HIA said the issue was particularly pronounced in growth corridors and regional hubs, where infrastructure constraints were already delaying housing developments. Croft cited Victoria and New South Wales as states where land previously earmarked for residential use had been fast-tracked for data centre development instead.
"The preferential planning treatment afforded to some data centre projects should also be called out," Croft said. "While we have no objection to this type of development, housing should be afforded the same urgency. Under fast-track planning mechanisms, it is entirely conceivable that a data centre spanning many hectares could be approved faster than a single home."
The association also raised concerns about the resource demands of large-scale data centre facilities, particularly their consumption of electricity and water. It drew a contrast with regulatory requirements imposed on the residential sector over recent decades to reduce household energy and water use.
"We welcome the prime minister's comments about the importance of data centres doing the heavy lifting when it comes to their electricity and water use and strongly encourage the Federal Government to push this principle forward and ensure National Cabinet supports it in both words and actions," Croft said. "Over recent decades, the cost of housing has been ratcheted up by successive changes to building and energy efficiency requirements, designed to reduce household water and energy consumption."
Croft acknowledged the potential benefits of artificial intelligence and emerging technologies for the building industry, but said their expansion should not proceed without scrutiny.
"AI is proving to be a valuable productivity-enhancing tool for many parts of the building sector, and Australia should be at the forefront of adopting these technologies," he said. "But we must not move forward without asking important questions and establishing sensible boundaries to ensure the nation's housing needs are not compromised."
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