Australia's productivity boss has warned there will be no easy fixes to speeding up home building, with housing on the agenda of this week’s economic reform roundtable in Canberra.
Cutting red tape has emerged as a key issue among leaders from government, business, unions and other groups for the roundtable, which will look at everything from tax to artificial intelligence.
At the National Press Club on Monday, Productivity Commission chair Danielle Wood warned that red tape had slowed down home building and was holding back the supply of new housing.
“Recent productivity commission research found the time taken to build houses and apartments has grown by 50% over the past 30 years,” said Ms Wood, who will be at the roundtable.
“It’s not the time laying bricks that’s blown out, it’s the approvals processes from planning to heritage to building approvals.”
She said governments had added layers of new rules to improve home building standards over the years, but the regulations were making it slower and harder to build.
“Heritage and density restrictions can prioritise preserving a version of local amenity at the expense of more and cheaper housing,” she said.
“Ever more stringent requirements for energy efficiency in the construction code prioritise small future energy savings over making it fast and cheaper to provide housing.”
There are growing calls to cut red tape to speed up home building in Australia. Picture: Getty
It comes as nearly 30 groups representing business and other sectors, including the Property Council of Australia and Master Builders Australia, called for cuts to red tape and reforms to the planning and approvals processes ahead of the roundtable.
The government has even flagged a desire to find ways to cut red tape for home building despite the government overseeing some of the rules.
“Delivering on our promise to build more homes means cutting through the red tape that is holding back housing construction, as well as clearing away barriers that stand between skilled workers and key projects,” Mr Albanese and Mr Chalmers wrote in an open letter on Sunday.
The big question remains which red tape and regulations to cut, and there have been growing calls to freeze updates to the National Construction Code (NCC) that occur every three years.
But architects and other voices in the construction industry have warned that freezing the NCC could result in higher building costs in the long term.
Policymakers hope that increasing housing supply will make housing more affordable. Picture: Jake Nowakowski
"A pause creates costly backlogs of quality and safety improvements that ultimately burden the industry and society,” Australian Institute of Architects national president Adam Haddow said.
The NCC is updated every three years to improve building standards across the country, but there have been concerns about the extra costs associated with each round of changes.
Housing Industry Association managing director Jocelyn Martin said there were a range of regulatory changes that policymakers could make to speed up home building.
“For instance, fast tracking housing approvals under a ‘One House One Approval’ approach, alongside clearing the significant backlog of projects stuck awaiting environmental approvals, could unlock hundreds of thousands of homes in one fell swoop at the same time spur investment in housing and its multiplier effect on the economy,” she said.
“Putting a pause on the churn of change to the NCC and [work health and safety] rules is another key area for reform.
“Inconsistent, duplicating and conflicting rules across these policy areas from different agencies continue to impose costs on regulated entities and mean more time in offices navigating red tape than on site building homes.”
Governments have been under pressure to make housing more affordable, as more and more Australians believe home ownership was unattainable.
Housing affordability was sitting at its worst level, meaning households across different income levels could afford to buy the smallest share of homes on record, according to the PropTrack Housing Affordability report published last September.
REA Group executive manager of economics Angus Moore said Australia’s home building industry had faced a lot of challenges over the past five years.
REA Group executive manager of economics Angus Moore said finding ways to speed up home building would help improve affordability. Picture: Supplied
“Since the pandemic started, it takes a lot longer to build homes,” he said.
“Input costs have increased enormously, construction labour has been hard to find, and the build times have blown out.
“All of those factors have implications for the cost and ease of delivering the homes that we need, so finding ways to speed that up would certainly help us improve housing affordability.”
Rental affordability has also worsened, hitting its lowest level since at least 2008, when records began, according to the PropTrack Rental Affordability Index published in March.
The roundtable, starting on Tuesday and running until Thursday, will host leaders from government, business, unions and other groups to discuss how to fix Australia’s productivity challenges.
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