Construction and property groups welcome interim findings calling for fewer restrictions and faster approvals
The Productivity Commission has released an interim report on housing supply regulation that identifies planning restrictions, regulatory complexity and approval delays as primary drivers of Australia's housing shortage — conclusions that three industry bodies have described as long-overdue official confirmation of what builders and developers have argued for years.
The report finds that Australia is not building enough homes in the locations where demand is greatest, and that improving supply is essential to improving affordability.
Among the measures proposed are permitting three-storey housing on most residential land, expanding mid- and high-rise development near transport hubs, removing minimum lot size requirements, streamlining development assessment processes and reducing developer contribution frameworks.
Matthew Kandelaars (pictured right), group executive of policy and advocacy at the Property Council of Australia, said the findings correctly diagnosed a structural failure in the nation's planning systems. "The Productivity Commission has put its finger on the problem," he said.
"Australia has spent decades layering new rules, restrictions and processes onto housing delivery while expecting affordability to magically improve. We're building homes today at half the productive rate than we were 30 years ago, which is proof you cannot regulate your way to cheaper housing while simultaneously making it harder to build."
"The biggest costs facing housing delivery isn't just construction. It's delay, and the uncertainty brought by red-tape and the $4 in every $10 that goes to taxes and charges across all tiers of government in the cost of a new home."
Kandelaars also called on state and local governments to adopt a more permissive stance. "The nation's housing targets will not be achieved by minor tweaks around the edges," he said. "We need planning systems that start from a simple principle – if a proposal meets the rules, it should be approved quickly."
Master Builders Australia chief executive Denita Wawn (pictured right) said the report confirmed what builders already know. "Excessive regulation, infrastructure bottlenecks and poor housing planning are holding back supply," she explained.
"Moving demand around will not deliver more homes. In fact, recent tax policies do exactly the opposite and reduce new housing supply by the government's own estimates.
"If we are serious about improving affordability, every level of government must commit to a new era of building more, faster and better."
Paul Waterhouse (pictured right), acting chief executive of Urban Taskforce Australia, pointed to the Commission chair's own words as an indication of how far regulation had drifted from its purpose. Commission chair Danielle Wood wrote in the Daily Telegraph that "what we have instead is a spaghetti bowl of rules and requirements that stop people from being able to build anything and often do little to solve genuine problems with new development."
Waterhouse said approvals data underscored the urgency. Australian Bureau of Statistics figures for recent months show the federal government is significantly underperforming on both approvals and commencements, making it increasingly unlikely that National Housing Accord targets will be met. Urban Taskforce expects the next set of results to show further declines, citing the ongoing economic effects of rate rises and international conflict.
The Commission's report also recommends that the federal government take a more direct role in housing delivery, including through infrastructure funding, financial assistance and risk underwriting — a position Urban Taskforce said it had long advocated.
The Property Council said it would continue to scrutinise post-approval bottlenecks and the performance of state utility providers and local governments. "Governments now have a choice," Kandelaars said. "They can keep defending the status quo, or they can get serious about reform and start treating housing supply as a national economic priority."
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