Hidden land costs, red tape, and regulatory creep are driving up house prices and the cost of living, as well as exacerbating mortgage stress, according to new economic modelling commissioned by Master Builders Australia and conducted by Cadence Economics.
“Surging house prices are stretching household budgets and placing more families under mortgage stress,” said Denita Wawn, CEO of Master Builders Australia. “It means that new home buyers are actually paying more for land than they are spending on building their new home. The same constraints have prevented the supply of new homes keeping up with demand over the past decade.”
“Previous analysis by Master Builders has shown that increased infrastructure investment outlined in the federal budget could result in an additional 93,000 new homes by 2021, which would go a long way to closing the gap with the government’s estimated housing shortfall of 100,000 dwellings,” Wawn said. “Now this new report shows that removing regulatory constraints at the state and territory level will be essential to unlocking this new supply.”
The report acknowledges that housing shortage issues exist in all states and territories, despite the different market conditions that prevail in each jurisdiction. Master Builders Australia’s report supports the federal government’s intentions to place conditions on housing-related funding to the state and territory governments. The report also backs calls to set benchmarks in terms of additional housing supply, specifically for affordable housing.
“Master Builders is calling for reforms to unlock the supply of more new homes. We want action to be taken now to preserve home ownership as a mainstay of Australian life,” Wawn said.