House prices may be a hot topic, but the hard numbers behind building approvals and construction activity paint an economic picture that can’t be ignored, says the Property Council.
Millions of Australians keep a watchful eye on the ups and downs in the property market, which is hardly surprising when, for most people, their home is the single biggest asset they’ll own.
While the major parties have outlined their policy positions on negative gearing and capital gains tax in the lead-up to the federal election on 18 May, they’ve ignored the bigger picture of housing construction – something that is critical to the nation’s economic prospects.
Housing construction is one of the big engines of the Australian economy and generates a large percentage of the industry’s 1.4 million jobs.
“The latest building approvals figures released last week should be a real wake-up call for our federal election candidates,” says the Property Council’s chief executive, Ken Morrison.
According to the Australian Bureau of Statistics’ latest data, the housing construction pipeline drying up, with a 15 per cent decline in overall activity and a 27 per cent fall over the past 12 months.
Underscoring the importance of these numbers to the economy, the Australian dollar fell to a four-month low following the release of the ABS data.
Morrison says the Property Council wants to see policies from all parties that stimulate construction to meet the current and future housing needs of a growing nation.
The Property Council’s policy platform for the 2019 federal election contains five key proposals to provide good homes for all Australians:
- Taxation: Don’t risk changes to negative gearing and Capital Gains Tax
- Incentives: Boost housing supply through federal incentives
- Build-to-rent: Champion the emerging build-to-rent housing sector in Australia
- Red tape reduction: Cut red tape and costs by finalising Environment Protection and Biodiversity Conservation Act (1999) bilateral assessment and approval agreements
- Housing choice: Support older Australians with incentives to ‘downsize’.
Morrison says the next federal government has a “major role to play” by creating good policy for housing, despite practical implementation occurring at the state and local levels.
“A dedicated federal minister for housing would emphasise the economic and social importance of housing to the fabric of our nation and sharpen our focus on effective housing policy and implementation,” Morrison says.
“Many of Australia’s big economic sectors have dedicated portfolio ministers – resources, agriculture and tourism among them. Housing should too.”
The Property Council has also called for the National Housing Supply Council to be reinstated to help governments better identify and respond to housing trends and provide policy-makers with deeper insights into supply, demand and affordability issues.
“Whether it is incentivising reform at state and local government levels to improve housing supply or driving the development of build-to-rent, there is a full slate of issues that need the federal government’s strong and steady guiding hand,” Morrison concludes.