Property Australia

Housing supply solutions

Karen Jamal Karen Jamal November 9, 2021

Chronic under-supply, excessive taxes and charges and inefficient planning systems have exaggerated the cost of housing, but federal ‘Housing Supply Deals’ could smash supply bottlenecks to ease affordability pressure.


  Three key takeaways:

  • Australian housing values are rising at the fastest annual pace since June 1989, with a 23.84% increase across our five biggest cities over the year to 31 October 2021, according to CoreLogic data.
  • Presenting evidence to the federal parliamentary inquiry into housing affordability and supply in Australia, Property Council chief executive Ken Morrison said federal ‘Housing Supply Deals’ could ease housing affordability pressures by unlocking thousands of new dwellings in key areas of housing need.
  • The Reserve Bank estimates the average dwelling price in Australia – both apartments and houses – at $836,000.


Australia can’t tackle housing affordability without dealing with supply, Ken Morrison told federal parliament’s standing committee on tax and revenue last week.

As Australia’s borders reopen and its population begins to grow again, the federal government can “help smash supply bottlenecks” by striking Housing Supply Deals with state, territory and local governments,” Morrison said.

“Under these deals, federal and state infrastructure funding can be added to the industry’s own contributions to clear out the infrastructure and planning logjams to deliver the housing the community needs.

“Housing affordability is a nationwide concern and while most of the levers to address this sit with state and local governments, the federal government can be a bigger part of the solution.”

In its submission to the inquiry, the Reserve Bank notes a little over two-thirds of Australians own a home, many with a mortgage. Home ownership rates have “drifted down” over several decades for most age groups, but most evidently among those aged 25 to 49.

Morrison said Housing Supply Deals can help overcome infrastructure and planning blockages to deliver new housing and apply downward pressure on prices.

“States like New South Wales and Queensland are failing to produce enough opportunities to build enough new homes within reach of enough first home buyers and federal help could break this deadlock.

“With net overseas migration recommencing as international borders reopen, this is the right time to undertake some of the bold reforms needed to unlock sections of land in growth corridors of our largest cities and towns.”

The Property Council presented evidence that large supply gaps already exist in key detached housing markets across Australia. Major capitals need state government incentives to stave off a looming apartment supply crunch by the middle of this decade.

The Property Council proposes that federal funding for social and affordable housing should be contingent on meeting housing supply targets. Morrison said industry would like to see the federal government incentivise supply, zoning and planning reforms to support states meet their housing obligations.

“All existing arrangements should have metrics attached and an expert taskforce should be formed to create a national competition policy-style payments scheme for states that deliver on their long-term obligations.”

Previous Property Council research has found a competition policy-style system could deliver a $3 billion boost to GDP and create a more durable supply pipeline.

“As shown through the strong work of NHFIC, the federal government does have an influential role to play monitoring and spurring better state and local government support for our long-term national housing supply needs.”