The long-awaited inquiry into Housing Affordability and Supply will open today (September 14) in the House of Representatives in Canberra.
Chaired by Liberal MP Julian Falinski, the inquiry will seek to address the issue of housing affordability in Australia, with a raft of submissions taken from wide-ranging sectors of the economy.
Australian Broker spoke to leading economist Saul Eslake about his submission, with the former ANZ chief economist making the declaration that “housing policy in Australia has been failing for 50 years.”
Eslake explained that home ownership rates had been falling for decades and that the new census, which was taken last month, was likely to see the lowest home owner rate in Australia since the 1940s.
He was just one of many who made submissions to the inquiry, and will likely appear before the upcoming public hearings.
The Australian Housing and Urban Research Institute (AHURI) also submitted, with their submission focusing on efforts that government could make to increase supply.
“Increased supply is determined by the availability of potentially profitable development sites,” they wrote.
"It is not as simple as just releasing new land, or re-zoning land, and expecting housing supply to increase as such land may not deliver profitable outcomes.”
“Governments can improve the prospects for profitable development by reducing input costs and creating certainty in the development process but market forces, which determined revenue, are the key driver.”
“If a developer cannot sell the end product at a price which will deliver the revenue necessary to secure the required hurdle rate of return, development will not occur.”
Regional areas have been at the forefront of the housing affordability crisis, and one area, Mount Isa Council, submitted their experiences of spiralling rents and associated affordability concerns.
They cited high rents as a result of low supply, which starved the city of workers for key industries, and asked for support in attracting developers and building infrastructure to support new homes.
“Without residential development of this scale Mount Isa will continue to be plagued by accommodation problems for the foreseeable future, the market for industries which dominate employment in the region have never been stronger and the outlook for the mining and agricultural sectors are predicted to stay at current levels or above for the next decade which is unprecedented,” they wrote.
Read more: Economic Saul Eslake on the housing affordability crisis in Australia