Australia’s housing supply is in danger of becoming a casualty of the race to build data centres, with the Housing Industry Association warning governments have been giving the centres “preferential” planning treatment.
Prime Minister Anthony Albanese announced an “Office of AI” on Wednesday and said Australia could build new data centres “without them competing with new housing”.
But Housing Industry Association CEO Simon Croft said examples were already emerging where housing projects were being displaced by data centre developments.
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“We are already seeing growing competition for land, electricity, water and infrastructure at a time when governments are struggling to deliver the housing supply needed to improve affordability,” Mr Croft said.
Simon Croft warns Australia could give preference to data centres over new housing developments. Picture: NewsWire / Martin Ollman
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“The preferential planning treatment afforded to some data centre projects should also be called out.
“There are examples in states such as Victoria and NSW, where land previously earmarked for housing is being fast-tracked for data centre development.
“Under fast-track planning mechanisms, it is entirely conceivable that a data centre spanning many hectares could be approved faster than a single home,” he said.
One of these centres is approved for Sydney’s northwest on a mixed-use development in Marsden Park, 9km from the CBD.
Separate figures from Data Center Map estimate Australia has 290 operational and proposed data centres.
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An aerial view of western Sydney near where the Marsden Park data centre will be built. Picture: Gaye Gerard
Meanwhile, statistics from Primara Research and Airteam indicate 83 per cent of Australians wouldn’t want to live near a data centre and would require a $35,000 discount to buy a home in the area.
Mr Croft said building data centres is important but they should not “come at the expense” of new housing supply given the current housing affordability crisis.
“While data centres may play an important role in Australia’s economic future, governments must not lose sight of the country’s most urgent challenge – delivering enough homes for a growing population,” Mr Croft said.
“Families looking for a home should not find themselves behind data centres in the queue for land, energy connections or essential infrastructure,” he said.
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A proposed data centre at Kemps Creek would be the largest energy user in Australia and the largest data centre in the southern-hemisphere. Picture: Supplied
The largest data centre in the southern hemisphere is proposed for Kemps Creek in Sydney’s west and would be Australia’s largest single energy user, according to The Climate Council.
Many other data centres also consume significant resources and Mr Croft warned they could inflate housing-related costs as resources are diverted away from the housing market into data centres.
“Over recent decades, the cost of housing has been ratcheted up by successive changes to building and energy efficiency requirements, designed to reduce household water and energy consumption,” Mr Croft said.
“At the same time, a single large-scale data centre can consume resources equivalent to tens of thousands of homes.
“Unless these impacts are properly managed and offset, there is a real risk that households will face even greater pressure to reduce consumption through additional costs and regulatory requirements,” he said.
The HIA urged governments to take a balanced approach when making planning decisions so data centres don’t compromise the country’s ability to deliver enough homes.
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