The housing industry has warned Treasurer Jim Chalmers that high interest rates and rapidly rising costs are crushing the pipeline for new homes.
Federal Labor’s landmark policy to build 1 million new homes in five years is on track to fail, with the housing industry warning that high interest rates and rapidly rising costs are crushing the pipeline for new homes., with tenants facing rapidly rising rents as the supply of available properties dwindles to historically low levels.
“Higher interest rates will continue to bring the building boom to an end,” the HIA wrote in its submission to Treasury’s employment white paper, which will be released later this year.“It typically takes six to 12 months for a change in the cash rate to fully flow through to the wider economy. In this cycle, the lags are treacherously long.”
“One million homes started within five years will be sufficient to ensure that the acute shortage of housing supply does not deteriorate further, but it will not be sufficient to address the long-term undersupply.”Labor’s reforms to the industrial relations system, including the introduction of multi-employer bargaining, had also made the construction industry’s supply chain more vulnerable to disruption.
It said that independent contractors were a “a long-standing and successful feature of the residential building industry” and raised concerns that comparing them to employees risked competition and productivity benefits. Australia will fall short of its housing needs between 2023 and 2027 by 106,300 dwellings, according toby the government-run National Housing Finance and Investment Corporation said.