The ³Ô¹ÏÍøÕ¾ Housing Finance and Investment Corporation – NHFIC – has done an important job with the State of the Nation’s Housing report.
It’s evolution into an annual report has cemented its position at the core of the national housing conversation.
This edition continues the great work of the former Housing Supply Council.
Work that will continue with the newly established Housing Supply and Affordability Council under the stewardship of Susan Lloyd-Hurwitz, the interim Council’s Chair.
I would also like to acknowledge that this report is dedicated to Judy Yates, who passed away recently.
Some in this room may have known Judy personally or her work over several decades as one of Australia’s most prominent housing economists.
Just as importantly, Judy was a kind and generous person who devoted much of her career to improved housing for those who could least afford it.
Housing challenges
We face a range of housing challenges.
Some, like declining rates of home ownership, have been with us for decades, while others were made worse by the COVID-19 pandemic.
COVID led to century-low population growth, spiking vacancy rates, a sharp increase in housing prices and a contraction in economic growth.
At the same time residential construction activity was hit by supply disruptions, material and labour shortages, absenteeism, and devastating floods.
Sadly, a decade of little action from the former federal government just made these challenges even more profound.
Now we’re confronting a different set of challenges.
Quickly recovering population growth, increasing household formation at a time of record low rental vacancies, rising interest rates and cost-of-living pressures.
This is all captured in the report.
Population growth is set to underpin the formation of around 1.8 million new households across Australia by 2033.
These new households will need somewhere to live.
And this demand comes at a time when builders and developers continue to confront difficulties including:
- strong construction material inflation costs
- rising labour costs
- higher interest rates, and
- ongoing delays in being able to get supply to market.
We also face challenges with the availability of social housing.
- In the decade from June 2011, just 19,200 new social housing dwellings were added across the country.
- Meanwhile, public housing waiting lists – for households in greatest need – increased by more than 50 per cent between 2014 and 2021.
- In 2022 there were over 174,000 people on public housing waiting lists.
- Adding state-owned and managed Indigenous housing and community housing, the waiting lists figure is over 230,000 people.
This government is committed to increasing the supply of social and affordable housing.
And Community Housing Providers are an essential component of the government’s strategy.
We listened to closely to stakeholders such as community housing providers at recent Senate hearings and we share many of their concerns.
We have listened to the needs of Australians and are working actively to improve outcomes.
And we are encouraging the private sector to invest in social and affordable housing.
The State of the Nation’s Housing Report 2022-23
As the State of the Nation’s Housing Report found, there are challenges in housing affordability and supply.
This will flow on to the rental market where vacancy rates are already at record lows in many areas.
The report conservatively estimates that more than 377,000 households are now in housing need.
Part of the reason for such high and growing need is that social housing has not kept pace with growth in the overall number of households in Australia, particularly over the last decade.
In fact, it has declined from 4.8 per cent in 2011 to 4.2 per cent in 2021.
The report’s findings highlight the need for all governments to work together to improve housing outcomes for all Australians.
And it acknowledges that the government has put policies in place to address these issues.
Legislative package
The report underscores the urgent need to pass housing legislation currently before the Parliament.
The Albanese government is proud to have put forward this legislative package that is designed to address longer-term challenges and build long-term solutions.
As well as establishing the $10 billion Housing Australia Future Fund the legislation will permanently establish the ³Ô¹ÏÍøÕ¾ Housing Supply and Affordability Council as an independent statutory advisory body.
The Council will report to and advise government on a wide range of matters relating to housing supply and affordability.
These could include residential construction issues, capacity constraints, or housing market research.
An interim Housing Council began operating on 1 January 2023 as a nonstatutory advisory body and it is already meeting to provide our government with advice.
The permanent council is expected to begin work following the passage of legislation from 1 July 2023.
Housing Australia Future Fund
At the centre of government’s legislative package is the Housing Australia Future Fund.
The Fund will be the single biggest investment in affordable and social housing in more than a decade.
It will help build 30,000 new social and affordable rental homes in its first five years to help address the housing shortfall identified by the report.
The HAFF will do this by investing its $10 billion initial capital to generate returns that will provide an ongoing and reliable funding source for the social and affordable housing sector.
This certainty is critical to attracting institutional investment.
This is particularly important in an environment where increasing costs look set to put downward pressure on private housing construction.
NHFIC notes that the HAFF will add 30,000 new social and affordable dwellings in its first five years.
This will double the number of new social homes delivered each year from Commonwealth contributions alone compared to the yearly average between 2006 and 2021.
The HAFF will also help address acute housing needs, including providing over its first five years:
- $200 million for the repair, maintenance and improvements of housing to meet the needs of remote Indigenous communities
- $100 million for crisis and transitional housing options for women and children impacted by family and domestic violence and older women at risk of homelessness, and
- $30 million to build housing and fund specialist services for veterans experiencing, or at risk of, homelessness.
The HAFF and the ³Ô¹ÏÍøÕ¾ Housing Supply and Affordability Council are a big part of our plans to help tackle Australia’s housing challenges.
This is a long term vision, and a chance to change housing outcomes in Australia.
And as ³Ô¹ÏÍøÕ¾ Shelter, ³Ô¹ÏÍøÕ¾lessness Australia, the Community Housing Industry Association, and other key stakeholders have been saying – it’s important that Parliament passes the legislation.
What we are already doing
While our legislative package is critical to addressing the challenges identified in State of the Nation’s Housing Report, it is worth reflecting on the action the Albanese government has already taken to address these issues.
Our government has already built on the commitments we took to the last election to ensure more Australians have a place to call home.
In September at our Jobs and Skills Summit we announced we would unlock up to $575 million from the ³Ô¹ÏÍøÕ¾ Housing Infrastructure Facility to invest in social and affordable rental homes.
This significant commitment recognised that the keys to a home can often be the key to helping Australians into secure employment.
And I’m pleased to say that funding is already flowing to projects across the country thanks to this decision.
In fact, the very first trip I made this year was to Adelaide where I had the pleasure of announcing that we would be able to deliver a 130-plus apartment ‘Build to Rent’ project on that city’s-fringe.
This $70 million partnership with the South Australian Government will see an increase in social housing plus dozens of affordable rentals for key workers including nurses, police and ambulance officers.
Building on our decision from the Jobs and Skills Summit, in September last year we fast-tracked our commitment to deliver the Regional First ³Ô¹ÏÍøÕ¾ Buyer Guarantee.
This decision brought forward the Guarantee’s launch by three months to October 1, helping thousands of Australians across the country into home ownership.
Australians like the Corhan and Abbey who were the first to settle under the new Guarantee and got to spend Christmas in a new home with their young family in Townsville.
Corhan and Abbey are just a few of the 5000 individuals who have so far bought a home with the help of the Albanese government’s Regional First ³Ô¹ÏÍøÕ¾ Buyer Guarantee.
In our first Budget we went further again with the Treasurer announcing an historic new ³Ô¹ÏÍøÕ¾ Housing Accord.
The Accord brings together states and territories, the Australian Local Government Association, investors, and representatives from the construction sector.
It aims to help support the housing supply pipeline beyond next year and into the future.
The Accord sets a shared aspirational target of one million new, well-located homes to be delivered over five years from mid-2024.
A crucial part of the Accord is an additional commitment from our government to deliver $350 million for 10,000 affordable rental homes across the country over five years from 2024.
The States and Territories have agreed to match this commitment, delivering up to 20,000 affordable rental homes through the Accord.
More funding for social and affordable housing; bringing forward assistance to help more Australians into homeownership; and an historic new Accord delivering thousands of affordable rental homes.
What you see is a government that is not wasting a day – a government which has already built on the ambitious housing agenda we took to the election.
Conclusion
It is clear our nation faces serious housing challenges.
But while it is important to reflect, it is far better to act.
And that is exactly what the Albanese government is doing.
We are driven every day to ensure more Australians have a safe and affordable place to call home.
Through our actions taken to date, and through the important legislation currently before Parliament, the Albanese government is committed to tackling the housing challenges in this nation.
I am proud to be the minister responsible for driving that forward – so that more Australians know the security of a safe and affordable home.
