Social housing would boost building economy: AHURI report

Tower Lock Down

Social housing was neglected in the Federal Budget. Picture: David Crosling

Building homes can help rebuild Australia’s COVID-hit economy — but new research has found government stimulus measures so far, including the $680m HomeBuilder scheme, are “too small to have a major impact”.

Funding social housing development and refurbishment was one “obvious” way to boost the construction sector beyond 2020, lead researcher for the Australian Housing and Urban Research Institute report Steven Rowley said.

The Curtain University professor said this would have the added benefit of reducing the nation’s “massive shortage” of affordable housing — which Homelessness Australia says amounts to a waitlist of more than 80,000 people in Victoria alone.

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The damning finding comes after this month’s Federal Budget failed to directly invest in social housing.

Prof Rowley labelled housing construction overall a “great way to boost the economy” as it not only created direct building jobs, but also had a “knock-on effect” of driving activity in sectors like retail and landscaping.

He said the $25,000 HomeBuilder grant for Australians spending up to $750,000 building or renovating homes had “done its job of sustaining employment” by rapidly driving an “uptake in land and new house sales in virtually all states and territories”.

But the one-size-fits-all approach had essentially “neglected” the apartment construction sector. And relying on “consumer demand” to boost longer-term economic recovery was “a risk, particularly if a lot of demand has been brought forward by these grants”.

“If governments are serious about using the housing industry to boost the economy, … they need (to look at) other parts of the housing market that could be stimulated, like multi-dwelling and social housing,” Prof Rowley said.

The AHURI report recommended governments also consider major changes to tax settings. These included removing “inefficient” stamp duty to spark more activity in the established housing market, and following the New South Wales Government’s lead to encourage private developers into build-to-rent construction by reducing land tax liabilities.

The research also highlighted the fact the Morrison Government’s $680m HomeBuilder scheme paled in comparison to the Rudd Government’s response to the 2008 Global Financial Crisis, which notably injected $5.6bn into delivering almost 20,000 social housing units.

Helicopter view of Melbourne's cranes/skyline

A one-size-fits-all approach to building stimulus has essentially “neglected” the apartment construction sector, according to the report. Picture: David Caird

Prior to the Federal Budget, the Community Housing Industry Association, Homelessness Australia and National Shelter called for a total $7.7bn government investment in social housing to deliver 30,000 new properties over four years, and 18,000 jobs each year.

The budget did provide an additional $1bn of low-cost finance to build affordable housing by boosting the National Housing Finance and Investment Corporation.

It also extended the First Home Loan Deposit Scheme into 2021, creating 10,000 extra places reserved for first-home buyers choosing new builds.

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