Politics and the Housing Market

Just saying we need cheaper homes won’t solve the housing crisis.?

While a greater supply of housing is necessary to bring house prices down, the rising costs in land, construction and finance make it infeasible for developers as profit margins are not there.

A policy idea to assist with the growing demand and feasibility is for the government to potentially subsidise infrastructure costs.

Supporting the construction of roads, sewerage, electrical infrastructure could support developers with the additional costs that deter them from starting construction.

A starting point is the Coalition considering funding for essential housing infrastructure like water and roads, similar to pre-1980s state partnerships.

The Victorian Government and the NSW Government are somewhat aligned, focusing on urban density, permitting high-rise developments near key transport hubs. However, high-density housing may not suit family buyers who prefer detached homes, though it could appeal to downsizers and young people trying to get a foot in the door (no pun intended).

The state is also offering a temporary stamp duty concession on off-the-plan units, which has historically spurred first-home buyer interest.

In addition, while focusing on increased supply is crucial, affordability is also tied to housing diversity. Beyond high-rise apartments, medium-density housing such as townhouses and duplexes may meet the needs of young families and downsizers.?

Allowing for a mix of housing types within developments could create a more accessible entry point for buyers and broaden the appeal across different demographics.

As elections approach, housing remains a key issue for a government to take action. Future policy decisions must ensure that quality standards aren’t compromised in the race to increase supply.?

The Coalition’s pause on construction code updates, for example, could lower standards, impacting buyer confidence and long-term value. Thoughtful planning and balanced support could provide more housing options without sacrificing the quality needed for sustainable growth.

But this multifactored crisis will need to be looked at from all angles to focus on lower costs of construction, finance, and land as well as increasing supply - and potential critical infrastructure support for developers investing in new builds.