The housing crisis will take center stage in the upcoming election, with both major parties clamoring to present “solutions” to the problems facing Australians.
A senior Labor strategist told me that housing will be the political debate that wins or loses the election; That’s how important they think the issue is becoming.
But the problems Australians face vary greatly depending on their personal circumstances.
If you own your home, you’re worried about interest rates and inflation. The former makes your mortgage payments harder to make and the latter puts more pressure on your cost of living.
Then there are concerns that the economy could slow, putting downward pressure on house prices. This could leave hundreds of thousands of Australians with a mortgage that costs more than their property is worth.
Housing stocks are tight as rents rise and increased immigration increases demand.
Naturally, many Australians are also worried about keeping their jobs so they can continue to pay for everything.
If you rent, several of these factors are also affecting you, as higher interest rates force investment property owners to raise rents to suit their own interests.
Of course, people who rent are also struggling with cost-of-living pressures. But the situation is even worse for many renters than for homeowners due to the lack of available housing to meet demand.
This situation is aggravated by very high immigration, at rates now much higher than the natural average of past decades. And Australia has long been a high immigration nation.
Anthony Albanese (above) is heading towards failure to deliver on his promise of 1.2 million new homes by 2029
The Coalition wants you to be able to use your super savings to buy your first home, something many experts have rejected (pictured leader Peter Dutton)
This is where new industrial relations laws introduced by the Labor Party are having a negative impact on housing. According to research by the Master Builders Association, the laws are creating a “productivity maelstrom” and discouraging construction just when the nation needs it most.
New homes are not being built at the rate they should because IR labor laws are holding back the construction sector. Research predicts the laws will erode up to 80 per cent of the promised new housing stock that Labor has committed to.
In other words, it is shaping up to be another broken promise.
That will make it harder for Australians to rent or buy in what is already a tough and tight market. It could also cause Labor to miss its target of 1.2 million new homes, an election promise the Prime Minister has pledged to deliver by mid-2029.
Of course, it is a commitment that Albanese will not admit to not having reached by the time of the next election, even if the projections make it clear that the Labor Party is falling short. Labor will simply claim that most new construction will happen as the deadline approaches.
To achieve this goal, nearly 250,000 new homes must be built each year. That’s not happening yet and the full impact of the new international relations laws hasn’t even come into effect yet.
If you don’t believe the Master Builders, then listen to the government’s National Housing Supply and Affordability Council. In his State of the Housing System report this year, he says Australian housing is in crisis, is “far from healthy” and predicts the situation is only going to get worse.
The Master Builders Association blames Labour’s new industrial relations laws for not building enough to meet demand.
Like the Master Builders, he believes that construction targets will not be met, despite the government’s protests that they will.
The Coalition wants to address housing affordability by allowing people to access their retirement savings when purchasing a first home. But this does not solve supply shortages and does not directly respond to the challenges posed by high immigration, for example.
It also mortgages people’s retirement savings that they are supposed to live off of to cover short-term homeownership needs. Many pundits have rejected the idea of the Coalition, as did voters when they toppled Scott Morrison in the last election, when he campaigned for such a policy change.
Labor was staunchly opposed at the time and still does now.