Why Building More Homes Isn’t That Simple

Australia knows it needs to build more homes. But if construction is already operating close to capacity, where will the extra housing actually come from?

HIA senior economist Tom Devitt joins Veronica and Chris to unpack the constraints holding the industry back and why simply calling for more supply misses the complexity of getting homes built. The conversation covers skilled labour shortages, planning and approvals, land and infrastructure costs, construction productivity, prefab housing and the shift towards medium-density development. Tom also explains why Sydney and Melbourne have struggled to recover, while WA, Queensland and South Australia have performed more strongly.

They also examine the fallout from changes to negative gearing and SMSF borrowing, including the risk that relatively small numbers of affected apartment sales could have a much larger impact on project financing. And with rental vacancy rates around 1%, Tom challenges the idea that investors are the problem, arguing that Australia needs more rental accommodation, not less.

From stamp duty and development feasibility to the difference between the real estate market and the underlying housing market, this conversation gets into the structural issues that will determine whether Australia can actually close its housing supply gap.

Episode Highlights01:39 – Meet HIA Economist Tom Devitt

02:14 – Why Australia Still Can’t Build Enough Homes

04:13 – The Skilled Trades Shortage Holding Housing Back

07:01 – Why Construction Workers Are Being Pulled Elsewhere

10:35 – Prefab Won’t Solve the Housing Shortage Alone

13:08 – How the SMSF Ban Could Sink Entire Projects

17:03 – The Housing Finance Fallout From the SMSF Ban

19:36 – Are Buyers Losing Confidence in New Housing?