Home Property Australia National Cabinet’s housing plan could save renters billions: Grattan

National Cabinet’s housing plan could save renters billions: Grattan

  • August 23, 2023
  • by Property Australia
National Cabinet met last week in Brisbane

National Cabinet met in Brisbane last week to deliver on a range of priorities for Australians, with a focus on more secure and affordable housing, agreeing to a new national target to build 1.2 million new well-located homes over five years, from 1 July 2024.

This is an additional 200,000 new homes above the National Housing Accord target agreed by states and territories last year.

The Commonwealth has committed to $3 billion for performance-based funding, the New Home Bonus, for states and territories that achieve more than their share of the one million well-located home target under the National Housing Accord. The aim of the bonus is to incentivise states and territories to undertake the reforms necessary to boost housing supply and increase housing affordability.

According to analyses conducted by the Grattan Institute, the inclusion of these additional 200,000 homes, upon their full completion, holds the potential to curtail rental expenses by an estimated four per cent compared to their projected levels.

This translates to a substantial relief of $8 billion for tenants within the initial five-year period. Should this accelerated construction pace persist for a complete decade, the possibility of an eight per cent decline in rents comes into view, heralding an impressive financial alleviation of $32 billion for renters throughout the span of those ten years.

This new target will be supported by the Housing Support Program, a $500 million competitive funding program for local and state governments to kick-start housing supply in well-located areas through targeted activation payments for things like connecting essential services, amenities to support new housing development or building planning capability.

National Cabinet also agreed to a National Planning Reform Blueprint with planning, zoning, land release and other measures to improve housing supply and affordability.

National Cabinet has agreed to A Better Deal for Renters to harmonise and strengthen renters’ rights across Australia, including developing a nationally consistent policy to implement a requirement for genuine reasonable grounds for eviction, moving towards limiting rent increases to once a year and phasing in minimum rental standards.

The Property Council of Australia welcomed National Cabinet’s commitments to boost housing supply for buyers and renters as well as reforms to migration and city planning.

Property Council Chief Executive Mike Zorbas welcomed the National Cabinet’s commitment to strategic and sustainable planning of our cities that accounts for population growth and aims to be agile, accountable and coordinated at the state and territory level.

Mr Zorbas said the Property Council had long-championed national competition-style payments for states that succeed at city planning and housing supply performance.

“National Cabinet is tackling our housing supply deficit in a coordinated way for the first time in a long time,” Mr Zorbas said.

“The New Home Bonus, the Housing Support Program, the National Planning Reform Blueprint, the Social Housing Accelerator and the rental deal all strike a sensible balance in progressing toward affordable new housing supply.

“Decades of strategic failure by governments has left us an unacceptably land-rich, housing poor nation. There is a deficit of supply in social, key worker and at market housing across the country.

“Our state planning systems don’t do what every Australian needs them to do – take a statewide view and accept nationwide accountability for providing all Australians with the chance to have a roof over their heads.

“Hopefully today marks the first day of a strategic and accountable system for delivering the housing Australians need.

“Adequate housing supply, based on the supply of adequately zoned and serviced brownfields and green fields land remains the most important factor in driving down buying and renting costs and prices across the market cycles.

“The next piece in the puzzle is for all parties in the Senate to support the passage of the Housing Australia Future Fund to support the delivery new social and affordable housing without delay,” he said.