Let's cut the bullshit - True Housing Solutions Require Courage

by Robert Pradolin, Founder & Director of Housing All Australians

Robert has been active in the property industry for over 40 years, most recently as General Manager of Frasers Property Australia (formally Australand) where he was for over 18 years. He is the founder and Director of Housing All Australians (NFP), is on the Board of Homes Tasmania and on Liverty Housing (which was formally Summer Housing) which is a disability housing provider. Through his career, he sat on a number of industry bodies including the Property Council of Australia (Vic), the Residential Development Council, the Housing Industry Association (Vic), the UDIA (Vic), Salvation Army Housing, Liveable Housing Australia, the Heritage Council of Victoria and was on the Victorian Board of Advisors of the Property Industry Foundation.

As political promises about housing affordability dominate pre-election headlines, we witness a familiar dance: politicians offering quick fixes while fundamental causes of our housing crisis remain unaddressed.

The reality, as economist Peter Tulip from the Centre of Independent Studies consistently highlights, is stark: Australia's housing crisis is primarily a supply problem. While negative gearing and tax concessions make convenient targets, they account for at most 4 percent of housing prices. The true culprits are restrictive planning regulations, NIMBYism, and bureaucratic delays choking our housing market.

KPMG's "Keeping Us Up at Night" report found 48 percent of business leaders identify housing affordability as their top social concern. Yet political discourse circulates around demand-side tinkering – 5 percent deposit schemes or mortgage interest tax breaks – that may help individuals jump the queue but ultimately fuel price inflation.

Housing All Australians has long advocated for housing to be reclassified as fundamental economic infrastructure – as essential as roads, schools, and hospitals. Without decent shelter, we face significant economic and social costs.

We must stop pretending there's a quick fix. Building our way out of this crisis will take decades. The Leptos review of NHFIC (now Housing Australia) in 2021, undertaken during the Morrison government, estimated the investment required to address just social and affordable housing shortfalls at $290 billion over 20 years – that's 44,500 homes annually. The Housing Australia Future Fund aims to build only 11,000 homes per year for five years. Where will the other 33,500 homes come from?

Government alone cannot bridge this gap. We must leverage private capital through innovative partnerships that respect both market economics and social needs. This is where compassionate capitalism enters the equation. Unlike American values that increasingly pit business interests against social responsibility, Australian values embrace the idea that profit and purpose can coexist.

Housing All Australians believes "compassionate capitalism" represents the true values of most Australian businesses. As our national anthem speaks of "wealth for toil" and "Advance Australia Fair," we understand that true advancement requires shared prosperity. Compassionate capitalism embodies this distinctly Australian ideal: Advancing Australia Fairly, ensuring economic growth and social wellbeing develop hand in hand.

This approach is already visible across Australia. The Ascott Group, through Housing All Australians, donated $500,000 in furniture to repurpose Hobart's Amelie House for vulnerable women. Companies like Metricon, Mirvac, Dulux, Interface, and CSR are similarly partnering with Housing All Australians to repurpose vacant buildings as transitional shelter. But this type of corporate philanthropy alone won't solve the problem – it's a short-term response to a country in a housing crisis. It needs systemic reform.

The deeply ingrained nature of compassionate capitalism in the Australian psyche became strikingly evident in September last year, when nearly 1,000 business leaders attended Associate Professor Gregg Colburn's presentation on his book, Homelessness is a Housing Problem. Their attendance wasn't merely professional interest—it reflected an instinctive Australian value response that many mightn't consciously recognise. When confronted with Colburn's findings that tight housing markets and high prices—not individual circumstances like mental health, addiction or poverty—drive homelessness rates, these business leaders responded to a call that resonates with our collective identity: that fair access to life's necessities aligns with both good business and our cultural values.

Shopping trolleys containing clothing and personal items in Adelaide's CBD. Photo: Michael Coghlan CC/Flickr.

Australia's 2021 Census counted 122,000 people experiencing homelessness (including those couch surfing), comparable to New York City's 98,000 (which doesn't count couch surfing). Our nation has effectively the same level of homelessness as a single American city. Australia can still end homelessness. Our increasing level of homelessness is the canary in the coal mine, warning of deeper failures across Australia's entire housing continuum. Our workers struggle to find accommodation near where businesses need them, making this housing crisis a business issue too.

An overlooked barrier to delivery of affordable medium and high-density housing is the differential construction costs between "domestic residential" (which builds housing using traditional subcontractors) versus "commercial residential" (which involves multi storey apartments and designates a unionised workforce).

The significant additional cost in delivering under “commercial residential” conditions means government policies relying on densification of middle-ring suburbs into mid-rise or high rise apartments are unaffordable for average families needing a family sized home. The theory of stopping urban sprawl sounds great, but a family seeking an affordable home cannot live in a 60sq metre apartment.

Creating housing supply that suits diverse societal needs is more complicated than commonly understood. Without deep knowledge of how property and construction industries actually function, idealistic policies are a waste time and resources. Its time we do not have!

Our politicians must level with the Australian public: there is no painless solution. Creating sufficient supply requires challenging entrenched interests, reforming planning laws, increasing density in established suburbs, boosting TAFE output, addressing industrial relations, and understanding how government infrastructure projects impact available resources. The fix to Australia’s housing crisis will take decades and requires considering multiple interconnected elements as part of a comprehensive strategy.

Australia needs, in the national interest, a housing accord that transcends politics – a bipartisan commitment to supply-side reforms that will outlast multiple electoral cycles and embrace private sector involvement. This isn't about the next election; It's about the next generation and the one after that. Our grandchildren's prosperity depends on decisions we make today.

Without addressing our housing crisis, Australia's grandest ambitions will remain just ambitions. It's time to stop political posturing and commit to the difficult, long-term work of building more homes where Australians need them. This requires political courage, planning reform, and honest conversations with communities about the true costs of maintaining the status quo. Anything less is just another empty promise.

This article was published with permission from the author Robert Pradolin from Housing All Australians.

Alternative Assets: The not-so-alternative sectors driving economic growth

By Mark Granter, Executive Managing Director, Alternatives & Client Care, Pacific - CBRE

Mark Granter joined CBRE in 1989 and currently holds the position of Executive Managing Director, Alternatives Capital Markets and Client Care for Pacific. The Alternative sectors are becoming a major focus for both local and global investors. CBRE have over 110 employees focusing on all the Alternative Sectors. Mark’s particular focus is on Healthcare, Data Centres and Renewables. Most recently In the last 1-2 years Mark has worked on some major Alternative appointments, including ANZ Data Centres in Australia and NZ, self-storage capital raise and two significant hospital and life sciences appointments.

Today’s advancing society is forcing the investment landscape to evolve. Recent years, marked by a global pandemic and population growth rates, have exposed the vulnerabilities of certain property sectors. Physical retail stores needed to move online to survive. Hybrid work practices from lockdown mandates pushed the office sector towards flight to quality to entice workers back in. 

“All this has done is highlighted the clear under-investment in sectors essential to a thriving economy and community,” says Mark Granter, CBRE’s Head of Alternatives in Australia and New Zealand.  

While these changes may have affected the typical performance of traditional property sectors like office, retail and hotels, Mark sees this as an opportunity to reset strategies rather than a setback. 

“It’s shown that investors need to diversify their exposure away from those traditional sectors and support these ‘alternative sectors’ if they want to maintain a healthy and balanced property portfolio.” 





What are the alternative asset sectors? 

Alternative assets essentially account for the sectors that reside outside of the traditional property sectors. They deliver the social infrastructure required for a healthy economy and community.

CBRE’s Alternative or ‘Essential’ Industries and Assets:

Energy and Renewables

  • Renewables (Solar, Wind, Hydro and Battery Storage)

  • Mining

  • Oil

  • Gas

  • Battery

Data Centres

  • Digital Infrastructure

  • Telecommunications Assets

  • Fibre-Optic Networks

Transport and Distribution Infrastructure

  • Airports

  • Roads

  • Ports

  • Rail/Intermodal

Living Solutions

  • Built to rent

  • Build to sell

  • Purpose Built Student Accommodation

  • Co-Living

  • Affordable Housing

  • Seniors Living, Aged care, Land Lease Communities

Healthcare and Life Sciences

  • Medical

  • Consulting Suites

  • Hospitals

  • Radiology & Imaging

  • Mental Health

  • Life Sciences

  • Laboratories

  • Research & Development

Social Infrastructure

  • Childcare

  • Education

  • Recreation

  • Self Storage

  • Service Station

  • Car Wash

  • Caravan Parks

  • Funeral Homes

What is the growth potential of alternative assets 

Despite the 'alternative' label, these sectors are far from supplementary in terms of growth,risk adjusted returns and performance. “Global investors have always had an allocation towards alternatives,” says Mark.  

“What's happening in Australia is that our local investors and superannuation funds are following suit, recognising the strategic value of these investments.” 

And there’s proof in the numbers.  

  1. Renewables: We’re seeing growing investment momentum through HMC Capital’s acquisition of Neoen’s wind, solar and battery assets in Victoria. It’s an acquisition that will form part of HMC’s new $2 billion energy transition fund.  

  2. Childcare: In 2024 there was $657 million in childcare sales - up 26% since 2023 - with the most dominant buyers being both local and Asian investors. Yields for this sector have remained very resilient compared to some of the more traditional sectors such as office, retail and industrial. CBRE also sold 14 childcare centres with a total value of $162 million.  

  3. Data Centres: Most investment activity has been underscored by major merger and acquisition deals and land sales to operators. The two standout transactions were the $24 billion sale of the AirTrunk to Blackstone and HMC Capital’s acquisition of Global Switch and iSeek.  

  4. Land Lease Communities (LLC): In 2024, Atlanta-based Invesco Real Estate made its first investment in Australian LLC. It comes in the form of a strategic capital partnership with Stockland to develop and hold LLCs. The joint venture is expected to inject $1.1 billion in gross development revenue in the early stages. Another major player, Mirvac Group, also announced its binding agreements to acquire one of Australia’s leading land lease operators, Serenitas, in partnership with two other firms for a total consideration of approximately $1 billion.  

“Investors are being driven by strong demographic trends, high population growth, an ageing population, and government initiatives,” Mark explains.  

“Government investment in childcare, the ageing population driving aged care and retirement. Population growth is also driving living sectors like build to rent (BTR). And then there’s the massive growth in the tech sector driving data centres.” 

Seizing the opportunities 

The growth potential is exceptional. Most of these sectors are set to grow 50-60%, if not 100%. A prime example is data centres, which are projected to expand from a $23 billion investment universe to $40 billion in the next five years, driven by the shift towards cloud-based applications, streaming services, social media, and artificial intelligence.  

“Government restrictions could even eventually play into the growth of Australia’s data centre industry, based off the existing restrictions on local data from being hosted on foreign data centres.”  

Alternatives sector challenges to be aware of 

It’s vital for investors to be aware of any challenges in property to help guide their strategies effectively. “The biggest issue in Australia for alternatives is scale,” says Mark. “Our market is small in comparison to other major global markets, but the growth trend is undeniable.” 

Other challenges include the evolving clarity around BTR, however Australian Government’s new laws offer a positive outlook with development tax incentives for developers and providers. 

The rising operating costs and pressure on the medical and healthcare sector is also another. “There is no quick and easy solution there, but we are confident it will be resolved, as private hospitals play an essential role in the Australian health system.” 


Future-proof your growth with CBRE 

As a global leader in property for over a century, CBRE is at the forefront of helping investors navigate dynamic growth sectors. With a team of 110 specialists dedicated across the Australian alternative sectors, CBRE leverages its global strength in specialised asset solutions, including global workplace solutions and partnerships with companies like Turner and Townsend.  

Begin your strongest investment journey in alternatives with us.  

This article is republished with permission from CBRE. Read the original article here.

A grab bag of campaign housing policies. But will they fix the affordability crisis beyond the election?

By Michelle Cull, Associate professor, Western Sydney University

Secure and affordable housing is a fundamental human right for all Australians.

Therefore, it is unsurprising the election campaign is being played out against a backdrop of heightened voter anxiety about rental stress and housing affordability. A growing number of people are unable to access housing that meets their needs.

And it’s not just low-income earners who are affected by housing pressures. It is also the millions of people who make up middle Australia; the very group that will help determine the election outcome.

The solution to Australia’s housing problem is complex. We need to start thinking differently about what reform might look like.

No cheap rents

For most Australians, housing is their biggest and most unavoidable bill.

The average national weekly rent for a unit is A$566 a week. It is even higher in capital cities. To afford this comfortably, renters need an annual income of $130,000.

But for someone on the median income of $72,592 (or $58,575 after tax) half their pay packet is being swallowed by their weekly rent.

This significantly exceeds the 30% benchmark that is a useful measure of housing affordability stress.

Million-dollar homes

The raw numbers are just as eye-watering for home ownership.

The mean price of a residential dwelling in Australia is around $977,000. For house hunters in New South Wales, the figure is even higher at $1.2 million.

The Australian dream of home ownership is out of reach for many low and middle income earners. Photo by Robert Couse-Baker

Rapidly rising house prices over the past few years have contributed to larger home loans and more people with a mortgage.

Only 13% of homes sold in 2022–23 were affordable for a median income household, with housing prices increasing more rapidly than wages.

The cascading price pressures mean first home buyers are finding it harder to save for a deposit.

Policy options

There is an urgent need for housing reform to overcome the affordability and accessibility challenges. There is no shortage of options available to policymakers.

For starters, planning rules and zoning regulations could be eased to facilitate more construction. Vacant commercial properties and office spaces could be repurposed as housing.

Another option includes removing barriers to constructing prefabricated homes, which are more efficient and affordable to build.

Time to be bold

Housing reform often involves debate around negative gearing and capital gains tax concessions for property investors. There are mixed results regarding how they would impact housing affordability and accessibility. The unpopularity of such policies at the 2016 and 2019 elections have since hindered any changes.

But more radical reforms could be considered. They include applying negative gearing to first home buyers, who would benefit by claiming the mortgage interest on their property against their income. The United States allows home-owner couples to claim mortgage interest on the first US$750,000 (A$1.19 million) of their loan to help them secure a home.

Overseas experience

The US policy highlights how high housing costs are not exclusive to Australia.

We could learn from other initiatives adopted overseas. For example, a bylaw passed in Montreal, Canada, requires new developments to include 20% social housing, 20% affordable housing and 20% family units.

Further, Vienna is known for its progressive social housing policies, which include rental caps and housing security. The housing is high quality and often includes access to communal pools, child care, libraries and other facilities.

Here in Australia, the major political parties are mindful that the high cost of housing is political kryptonite. They are fighting the May election armed with policies aimed at improving affordability and availability. But will these policies go far enough?

What the major parties are offering

Labor plans to increase housing supply by 1.2 million homes over five years by changing zoning and planning rules. This includes 20,000 social housing homes and 10,000 affordable rentals for front-line workers such as police and nurses. It will also increase tax incentives for the build-to-rent program to increase rental supply.

These policies are likely to improve affordability and accessibility for lower income earners. However, there will be a wait while homes are constructed. It is also expensive at around $10 billion.

To increase supply, Labor will invest in prefabricated and modular homes, including a national certification system to streamline approvals.

Labor will also expand the Help-to-Buy scheme so more Australians can purchase their first home, although this may push-up prices through increased demand.

The Liberal Party’s policy centrepiece is $5 billion to fast track essential housing infrastructure such as water and sewage, to unlock up to 500,000 homes.

High housing costs have contributed to Australia’s homeless problem. Photo by MART PRODUCTION

The Coalition is also vowing to free up more housing by reducing immigration by 25% and capping the number of international students.

For first home buyers, the Liberals want to allow early access to superannuation of up to $50,000, but studies suggest this could backfire by increasing house prices and hurting retirement savings.

Dream turns to a nightmare

Voters may find merit in one or more of the proposed policies, but bipartisanship will be essential if we are to solve the housing crisis, regardless of the election outcome.

And genuine reform involves more than sugar-hit policies that might find favour during election campaigns. It requires bold, decisive action with investment in areas that benefit those most in need.

Without genuine reform, even more Australians will struggle to put a roof over their heads. The ramifications will be devastating to Australia’s social and economic future.

The Australian dream of owning a home will be at risk of becoming an even bigger nightmare.

This article is republished from The Conversation under Creative Commons license. Read it here.

25 years into a new century and housing is less affordable than ever

Photo by Geometric Photography

By Brendan Coates, Program Director, Housing and Economic Security, Grattan Institute and Joey Moloney, Deputy Program Director, Housing and Economic Security, Grattan Institute and Matthew Bowes, Associate, Housing and Economic Security, Grattan Institute

Of all the problems facing Australia today, few have worsened so rapidly in the past 25 years as housing affordability.

Housing has become more and more expensive – to rent or buy – and home ownership continues to fall among poorer Australians of all ages.

Housing makes up most of Australia’s wealth, so more expensive homes concentrated in fewer hands means growing wealth inequality, with a marked generational divide.

To unwind inequality, we need to make housing cheaper, and that means building much more of it.

Housing has become more expensive

The price of the typical Australian home has grown much faster than incomes since the turn of the century: from about four times median incomes in the early 2000s, to more than eight times today, and nearly 10 times in Sydney.

Housing has also become more expensive to rent, especially since the pandemic.

Rental vacancy rates are at record lows and asking rents (that is for newly advertised properties) have risen fast – by roughly 20% in Sydney and Melbourne in the past four years, and by much more in Brisbane, Adelaide, and Perth.

Home ownership is falling fast among the young

Rising house prices are pushing home ownership out of reach for many younger Australians.

In the early 1990s it took about six years to save a 20% deposit for a typical dwelling for an average household. It now takes more than 12 years.

Unsurprisingly, home ownership rates are falling fastest for younger people. Whereas 57% of 30–34 year-olds owned their home in 2001, just 50% did so by 2021. And just 36% of 25–29 year olds own their home today, down from 43% in 2001.

And home ownership is falling fastest among the poorest 40% of each age group.

Fewer homeowners means more inequality

People on low incomes, who are increasingly renters, are spending more of their incomes on housing.

The real incomes of the lowest fifth of households increased by about 26% between 2003–04 and 2019–20. But more than half of this was chewed up by skyrocketing housing costs, with real incomes after housing costs increasing by only 12%.

In contrast, the real incomes for the highest fifth of households increased by 47%, and their after-housing real incomes by almost as much: 43%.

Wealth inequality in Australia is still around the OECD average but has been climbing for two decades, largely due to rising house prices.

In 2019–20, one-quarter of homeowning households reported net wealth exceeding $1 million. By contrast, median net wealth for non-homeowning households was $60,000.

Since 2003–04, the wealth of high-income households has grown by more than 50%, much of that due to increasing property values. By contrast, the wealth of low-income households – mostly non-homeowners – has grown by less than 10%.

The growing divide between the housing “haves” and “have nots” is largely generational. Older Australians who bought their homes before prices really took off in the early 2000s have seen their share of the country’s wealth steadily climb.

This inequality will get baked in as wealth is passed onto the next generation.

Some Australians will be lucky enough to inherit one or more homes. Others – typically those on lower incomes – will receive none.

To unwind inequality, we need to make housing less expensive

We haven’t built enough

Australians’ demand for housing since the turn of the decade is a story of historically low interest rates, increased access to finance, tax and welfare settings that favour investments in housing, and a booming population.

But one widely-blamed villain – the introduction of the 50% capital gains tax discount in 1999, together with negative gearing – is likely to have played only a small part in rising house prices.

That’s because the value of these tax advantages – about $10.9 billion a year – is tiny compared to Australia’s $11 trillion housing market.

Instead, the biggest problem is that housing construction in recent years hasn’t kept up with increasing demand.

Strong migration over the past two decades has seen Australia’s population rise much faster than most other wealthy countries in recent decades, boosting the number of homes we need. Rising incomes, and demographic trends such as rising rates of divorce and an ageing Australia, have further increased housing demand.

Yet Australia has one of the lowest levels of housing per person of any OECD country, and is one of only four OECD countries where the amount of housing per person went backwards over the past two decades.

This is largely a failure of housing policy. Australia’s land-use planning rules – the rules that dictate what can get built where – are highly restrictive and complex. Current rules and community opposition make it very difficult to build new homes, particularly in the places where people most want to live and work.

More homes would mean less inequality

Fixing this will allow mores home to get built, moderate house price growth, and reduce barriers to home ownership. In turn, this will reduce the inequalities created by our broken housing system.

Easing planning restrictions is hard for governments, because many residents don’t want more homes near theirs.

The good news is that the penny has started to drop and state governments – particularly in Victoria and New South Wales – are making meaningful progress towards allowing more homes in activity centres and on existing transport links.

But now the real test begins: how will governments respond to the backlash from people who would prefer their communities to stay the same?

How well governments hold the line against the so-called NIMBYs (Not In My Back Yard) will tell us a lot about what we can expect to happen to inequality in Australia in the future.

This article is republished from the Grattan Institute under Creative Commons license. Read it here.

Australia's Housing Crisis: The Forgotten Lessons of Bipartisanship

By Adrian Harrington, NSW Chair of Housing All Australians

Adrian Harrington is the former Chair of the National Housing Finance and Investment Corporation and is now the NSW Chair of Housing All Australians

Australia faces a severe housing crisis. Homeownership rates have plummeted, rental vacancies hit record lows, housing costs consume incomes, and homelessness has risen. The Australian dream erodes beneath partisan deadlock.

Politicians talk, posture, blame, but fail to act decisively. The absence of sustained bipartisan housing policy cripples effective response, with brief moments of cross-party cooperation quickly dissolving into political advantage-seeking.

Fragmented and ineffective housing policies have failed Australians for too long.

In 1944, Australia confronted a housing crisis of different origins. World War II had halted construction, materials were scarce, and returning servicemen needed homes. The nation's housing deficit exceeded 300,000 dwellings—on a relative basis, worse than today's shortfall.

As part of the Post-War Reconstruction Authority, the Curtin Labor government established the Commonwealth Housing Commission, whose recommendations received unequivocal bipartisan support. Labor initiated; the subsequent Menzies Liberal government implemented. Neither claimed partisan victory. Both prioritised national need over political advantage.

This bipartisan approach built public housing at unprecedented scale, created accessible finance mechanisms, established housing research bodies, and coordinated federal and state actions effectively. The Commission's vision transcended electoral cycles and party politics.

Houses from the 1950’s

Recent history provides fleeting echoes of this cooperation. The Liberal-National Coalition established the National Housing Finance and Investment Corporation (NHFIC) in 2018, providing low-cost loans to community housing providers and first-home buyer deposit guarantees. Labor supported this initiative, albeit with some reservations.

Five years later, the Albanese Labor government rebranded NHFIC as "Housing Australia" and expanded its remit with the $10 billion Housing Australia Future Fund (HAFF). After initial opposition and six months stalled in the Senate, the HAFF eventually passed with the support of the Greens, but without the strong bipartisan mandate from the Liberal National Coalition necessary for transformative impact.

This pattern repeats endlessly. Labor governments emphasise social housing investment and rental regulation; Liberal-National coalitions focus on demand subsidies, supply deregulation and homeownership. These alternating approaches neutralise progress while the housing crisis worsens with each policy reversal.

Tax policies epitomise this dysfunction. Negative gearing faces perpetual political football status, capital gains concessions swing with electoral fortunes, and housing investment decisions hinge on polling predictions, distorting the market.

State-federal relations compound the paralysis. Planning controls rest with states, taxation powers concentrate federally, infrastructure funding splits unpredictably, and local councils face unfunded mandates. No level of government accepts ultimate responsibility for housing outcomes.

Australia operates without a unified national housing strategy, leaving each state to enforce conflicting policies. Planning laws, tenant protections, and development incentives vary widely, alongside inconsistencies in construction standards, building trade employment laws, property taxes (stamp duty and land tax), land release policies, social housing eligibility, vacancy taxes, and environmental compliance. We can’t even agree on a national definition of affordable housing or a single regulatory framework for community housing, with WA and Victoria opting out entirely.

This patchwork system creates a regulatory maze that weakens national cohesion, hampers effective housing solutions and reduces productivity in the housings sector.

The 1944 Housing Commission created clear accountability structures, established explicit production targets, directed resources efficiently across government levels, and ensured implementation regardless of electoral outcomes. It recognised housing as essential infrastructure deserving of political consensus—principles modern Australia has abandoned.

Economic consequences intensify. Productivity suffers as workers cannot afford housing near employment centres. Labor mobility decreases, household debt reaches dangerous historic highs, and housing stress undermines consumer spending.

Social impacts cut deeper. Intergenerational inequity grows as young Australians face housing barriers their parents never encountered. Class divides widen, social cohesion fractures along housing-wealth lines, and community bonds weaken, while housing stress creates health issues.

Regional disparities sharpen under inconsistent policy. Capital cities experience extreme unaffordability, mining regions undergo violent boom-bust cycles, and rural towns struggle with aging housing stock. One-size partisan policies fail these diverse contexts.

Media coverage reinforces partisan frameworks, with housing analyses reflecting political allegiances rather than evidence. Complex policy proposals face reductive treatment, while nuanced bipartisan approaches generate less coverage than conflict narratives.

Public sentiment recognises this failure. Polling consistently shows housing affordability among top voter concerns across party affiliations. Australians across the political spectrum support substantive action.

The economic scale of Australia's housing challenge dwarfs government capacity. The 2021 Leptos Review of NHFIC quantified this reality. Australia must spend $290 billion over the next 20 years to address the shortfall in social and affordable housing. Government budgets cannot meet this requirement alone. Community housing providers and institutional capital must form essential partnerships with government, yet partisan approaches undermine the policy certainty these partnerships require to deploy capital toward social purpose.

The post-war Housing Commission succeeded because it placed national welfare above political advantage, created institutions that survived electoral cycles, established measurable targets with clear accountability, and recognised housing as fundamental to Australia's social contract.

Modern Australia must rediscover this collaborative spirit. Housing should become a standing national priority with genuine bipartisan commitment. Policy consistency should transcend electoral outcomes. Implementation should receive as much attention as announcement.

New housing estate in Golden Bay, Western Australia 2023

Australians deserve housing security regardless of which party holds power. National prosperity requires housing stability transcending electoral cycles. Social cohesion depends on housing equity that outlasts campaign seasons. Both major parties must acknowledge their respective blind spots and allow ideological preferences to yield to evidence-based pragmatism.

The path forward requires political courage from leaders willing to echo their post-war predecessors by placing nation above party. Both parties must support sensible housing policies and prioritise outcomes over point-scoring. Australia's housing failure directly correlates with its partisan approach to what should be considered essential infrastructure.

With a Federal election just around the corner now is the time to act.

The alternative is continued failure. Australia cannot afford it. Our housing future depends on bipartisan commitment.

First published in The Australian on 20th March 2025.

Permission to republish given by author.

Replacing stamp duty with a land tax could save home buyers big money. Here’s how

Bungalow Adelaide/Mike Coghlan

By Jason Nassios, Associate Professor, Centre of Policy Studies, Victoria University and James Giesecke, Professor, Centre of Policy Studies and the Impact Project, Victoria University

Infrastructure Victoria has released a draft 30-year plan outlining how the state can grow sustainably.

It focuses on key areas like transport, housing, energy, and public services to support a growing population and improve liveability. The plan also suggests ways to make the state’s infrastructure and tax system fairer, more efficient and more sustainable.

The plan’s recommendations are expected to cost between A$60 billion and $75 billion, mostly spent before 2035. This is around 10% of Victoria’s yearly economic output in 2023-24, spread over the next decade.

With Victoria already spending record amounts on infrastructure, and budget deficits forecast until 2025-26, finding the money to fund social housing, transport and other projects is a key challenge. We estimate the Infrastructure Victoria proposals would add between $4 billion and $5 billion to Victorian government expenditure each year.

Yet one of its proposals — replacing stamp duty with an annual land tax — would only cost between $1 million and $5 million to implement, but generate substantial gains for Victorian households.

Why replace stamp duty with land tax?

Stamp duty is one of the biggest barriers to moving house in Victoria and other Australian states. This tax, which people pay when they buy property, adds thousands of dollars to the cost of moving.

In 2022-23, Victorians paid about $12 billion to move house. Of this, $3 billion went to actual moving costs (like real estate services, and removalists) and $9 billion was stamp duty.

That’s an effective tax rate of 300% on the true cost of moving, and in 2023 added about $40,000, or 5.3%, to the cost of purchasing the average Victorian home.

High stamp duty discourages people from relocating, even when their needs change — whether that’s moving for a new job, finding a bigger home for a growing family or downsizing after retirement. This leads to longer commutes, traffic congestion and a less efficient housing market.

Switching from stamp duty to an annual land tax would make moving easier and spread the tax burden more fairly.

Instead of a large, one-time tax when buying a home, all landowners would pay a smaller tax each year. This would help fund schools, hospitals, and other infrastructure more sustainably.

What can we learn from Canberra?

Victoria University’s Centre of Policy Studies studied a similar reform in the Australian Capital Territory, where stamp duty has been gradually phased out since 2012 and replaced with higher general rates (a type of land tax).

Each year, the ACT government sets a target for how much money it needs to raise. Landowners then pay a share of that total, based on the value of their land.

One of the biggest benefits of this approach is that it raises money more efficiently. Unlike other taxes, land taxes don’t discourage investment or economic activity.

The study found removing stamp duty had a big positive impact on the ACT’s economy. Around 80% of the economic boost came from removing stamp duty, while introducing land tax also had benefits. By studying transaction data from the ACT, we showed each 10% reduction stamp duty rates drove a 6% rise in property transactions.

Would it help housing affordability?

One of the main arguments for replacing stamp duty with land tax is its effect on housing prices. Economists widely agree land taxes reduce land values, which makes housing more affordable.

However, the impact of removing stamp duty is less predictable. Our previous research found the effect on house prices depends on how often properties are bought and sold. Apartments, for example, tend to change hands more frequently than houses. Because of this, removing stamp duty tends to push up apartment prices more than house prices.

Even so, the overall effect of the reform is a drop in property prices. The challenge is ensuring this price reduction is evenly spread across different types of housing.

A fairer tax system

To make the system fairer, policymakers could adjust how land tax is applied. One option is to introduce a fixed-rate component, as proposed in New South Wales. Another idea, suggested 15 years ago in the Henry Tax Review, is to base the tax on the per-square-metre value of land.

Another key factor is housing supply. If planning laws allow more high-density housing in inner suburbs, price changes could be better managed.

We also need short-term solutions

Replacing stamp duty with land tax is a long-term reform that would take years to fully implement. The ACT, for example, planned a 20-year transition.

If all state governments implemented this reform, we estimate Australian households would ultimately be better off by about $,1600 per household per year.

In the short term, other policies could help improve housing affordability. These include increasing Commonwealth Rent Assistance and rethinking first-home buyer support. These steps could complement broader tax, infrastructure and housing supply reforms.

The Victorian government is seeking feedback on the draft plan before releasing the final version later this year. This is an opportunity for Victorians to contribute ideas on how to shape the state’s future and ensure its infrastructure and tax system work for everyone.

This article is republished from The Conversation under Creative Commons license. Read it here.

‘A serious wake-up call’: Cyclone Alfred exposes weaknesses in Australia’s vital infrastructure

By Cheryl Desha, Visiting Professor, School of Engineering and Built Environment, Sciences Group, Griffith University

Thousands of residents are mopping up in the wake of ex-Cyclone Alfred, which has damaged homes and cars, flooded roads and gouged out beaches.

I write from Brisbane, where rain has fallen for several days. Most of it is draining to a coastline already swollen and eroded by Alfred’s swell.

Flood warnings are current in southeast Queensland and northeast New South Wales. Many communities are in danger – some of which have faced multiple floods in recent years.

Despite all this, the damage could have been so much worse – and we may not be so lucky next time. Australia must use Cyclone Alfred as a serious wake-up call to bolster our essential infrastructure against disasters.

Flooding and other hazards have caused major disruptions to communities

A complex picture

Cyclones are incredibly complex. They involve multiple interacting hazards such as severe wind, flooding, storm surge and erosion. This makes their impacts hard to predict.

Alfred meandered slowly off the coast for almost a fortnight, fed by warm waters in the Coral Sea. Its movements were made even more complicated by a new moon, which creates extra-high high tides.

Despite these intricacies, experts were able to map the path and character of the cyclone. This was due to collaboration between multiple agencies and personnel across national, state and local governments.

This information was quickly transmitted to the public via local government emergency dashboards, apps and emergency radio broadcasts, as well as traditional media. The warnings meant communities knew what was coming and could prepare accordingly.

However, Alfred’s force exposed major weaknesses in vital infrastructure.

Electricity outages reached record levels, peaking at more than 300,000 across both states. Queensland Premier David Crisafulli described the outages as that state’s “largest ever loss of power” from a natural hazard.

On the Gold Coast, residents of newly built luxury apartments reported rain penetrating past windows and into homes many storeys above the ground.

Falling trees crushed homes and cars, and in at least one case sparked an electrical fire.

In Queensland and NSW, Alfred flooded and damaged roads, causing scores of road closures and traffic signal outages.

Drawing lessons from nature

As climate change worsens, extreme weather will become more frequent and severe. We must minimise the risks of infrastructure failing during these events. It will require a broad range of measures extending beyond those adopted in the past.

Nature is incredibly resilient. It can offer many lessons to decision-makers, engineers, town planners and others. This approach is known as “biomimicry” – innovation that emulates the forms, processes or systems found in nature.

Connected vegetation such as a line of mature trees, wetlands and mangroves can detain and slow water. This means water passing through has less energy to erode land and topple infrastructure. It also allows for water to soak into the ground, which cleans it and filters out debris.

In flood management, holding ponds known as “detention basins” are used to temporarily store stormwater run-off during heavy rain. City parks can be reshaped or upgraded to become detention basins, holding water until it can safely drain away.

The Bremer River (near right) entering the Brisbane River/Kerry Raymond

Urban infrastructure could also mimic the swales and earthen mounds found in nature, by incorporating human-made channels and mounds. These would guide water away from communities and infrastructure, to storage above or underground.

And what about our coastlines? Cyclones stir up huge swells which crash on shores and gouge out beaches. Alfred has left extreme sand erosion up and down the coast.

Coastlines are inherently mobile; sand naturally leaves and returns, depending on the weather. To protect our permanent coastal development, sand dune restoration could provide a line of defence in front of built infrastructure. This option has been implemented in the Netherlands, where it was found to be cost-effective.

In Australia, an estimated 17% of mangroves have been destroyed since European settlement. Mangroves naturally buffer the land from wind and storm surge. Reinstating mangroves could help protect coastal communities from future wind damage, as a 2020 study in Fiji showed.

Coastal erosion at Ocean Shores in the lead up to Cyclone Alfred / Aliceinthealice

Globally, there is a growing movement towards creating “sponge cities”. These are urban areas rich in natural features such as trees, lakes and parks, which can absorb rain (and sometimes wind) and prevent flooding.

Australia is cottoning on to how nature can help protect our cities. But there is much more work to do.

Experts from James Cook University have been deployed to southeast Queensland to capture immediate data after ex-Cyclone Alfred. They are documenting the effects of extreme wind and other hazards on buildings and infrastructure, and collecting data on wind speeds, water ingress and damage caused by debris.

Hopefully, the findings will inform decision-making on construction, building codes and disaster-resilience strategies for communities.

Building back better

Climate change is expected to cause fewer, but generally more severe, tropical cyclones. Combined with other climate-related changes, such as more intense rainfall and higher sea levels, the risk of flooding associated with cyclones will worsen.

Significant money is already being spent on disaster prevention and preparedness. However, more is needed.

Australians should not need another reminder to proactively reduce the damage caused by extreme weather events. But Alfred has certainly provided one.

As the clean up begins, let’s embrace the opportunity to build back better.

This article is republished from The Conversation under Creative Commons license. Read it here.

Shuttered car factories in Australia could be repurposed to make houses faster and cheaper

Manufactured homes side walls are built and then lifted into place

By Ehsan Noroozinejad, Senior Researcher, Urban Transformations Research Centre, Western Sydney University

Australia is in the grip of a severe housing shortage. Many people are finding it extremely difficult to find a place to live in the face of rising rents and property price surges. Homelessness is rising sharply. Tent cities are becoming more common.

The federal government has pledged to encourage the building of about 1.2 million new dwellings over the five years from mid-2024. The problem is, conventional building techniques are unlikely to be able to respond to the scale of demand quickly. Conventional building is expensive and slow. Faster, cheaper construction methods are needed.

There might be a way to accelerate the build. In recent years, car manufacturers Ford, General Motors and Toyota have shuttered their Australian factories, due to intense global competition.

Before these factories fell silent, they were home to trained workers, advanced machinery and efficient production systems. In Australia, companies such as Hickory Group are working to turn car factories into house factories. In Japan, Toyota has been making modular housing for decades, by adapting car production line techniques.

Scaling this approach up in Australia could simultaneously address industrial decline and housing demand.

Cars on assembly line at the Ford factory. Picryl

Can mothballed car factories really make houses?

After years of decline, Australia’s car manufacturing industry came to an end in 2017, when Toyota and General Motors’ factories stopped mass production. Ford’s local factories closed a year earlier. It was the end of 70 years of mass production, though companies such as Premcar are still making local versions of overseas cars.

Thousands of factory workers lost their jobs. But the effect rippled outward, as about 40,000 workers in the supply chain lost their jobs.

These automobile factories left behind more than just empty structures.

Most of them have not been demolished. Some still have advanced manufacturing lines. Their former workers with automation and precise engineering training might be working in different fields, such as caravan manufacturing.

Building a house in a factory has similarities to car manufacturing. Both use modular production, in which individual parts are manufactured and then assembled into a final product.

That’s not to say this would be easy – there would be regulatory hurdles to overcome and the factories would need an overhaul.

One tough part is figuring out how to use modern car-building tools (such as robotics) to make components of houses. While building cars and houses share some ideas, they’re not the same.

Bringing these factories back into production would boost the economies of states such as Victoria.

States such as South Australia have already started down this path, turning Mitsubishi’s defunct Tonsley Park factory into an innovation precinct hosting modular construction companies such as Fusco Constructions, which will begin operations next year.

Meanwhile, much work has been done in Australia and overseas to find ways to mass-produce housing using factories.

Imagine thousands of individual car parts were delivered to your front yard, where workers painstakingly put the car together. This seems crazy. But it’s essentially what we do with houses, especially freestanding ones. Advocates for modern methods of construction have pointed out the inefficiencies of transporting building materials to a site and assembling them there.

Some large-scale builders are already working to automate more of the home-building process. Besides making houses more cheaply, the benefits include centralising production around a factory, protection from weather delays, and the ability to use industrial robots.

Car assembly lines guarantee each component is manufactured to exacting specifications. Automobile manufacturing has been transformed by new technologies, including digital twin simulations, robotics and 3D printing. But the building industry has been slower to take these up. If we can bring these technologies to bear on how we make homes, we can accelerate construction, reduce errors and cut prices.

In fact, we are seeing some car manufacturers moving into home building. Mercedes-Benz, Bugatti, Bentley, Aston Martin and Porsche are all putting their names on high-end homes in some way, while Honda has explored manufacturing smart, low-energy homes.

Change is coming – but slowly

Advanced building techniques are not new to Australia. Prefab buildings are already being built on factory lines by companies such as Fleetwood, ATCO Structures and Logistics and Modscape.

Here, building components are produced in a controlled factory setting before being delivered to the construction site for prompt assembly. Dozens of companies are working in this space. To date, however, most of these buildings will be used as schools, police stations or temporary housing for mining workers.

Last year, the federal government set up a A$900 million fund as an incentive for state and territory governments to accelerate building approvals and take up prefab techniques. To date, the sector is struggling to scale up due to a lack of infrastructure and too few manufacturers.

Other countries are further along the path. In Sweden, up to 84% of detached homes are made with prefabricated components, compared with about 15% in Japan and 5% in the United States, United Kingdom and Australia.

One option is to adopt yet more advanced techniques, such as lean manufacturing and automated assembly. Both of these are well established in car-making, and could be used to increase the speed and accuracy of prefab home construction.

What would it take to make this happen?

Australia’s housing crisis has been years in the making. To solve it, we may need bold solutions.

Converting old car factories into affordable home factories could help accelerate our response to the challenge – and reinvigorate industrial precincts.

It would take work and funding to make this happen. But there are commonalities. Making prefab homes depends on precise, modular production methods that work best when automated. Transitions like these can happen.

This article is republished from The Conversation under Creative Commons license. Read it here.

Politics with Michelle Grattan: Danielle Wood on how to trim back housing regulations

By Michelle Grattan, Professorial Fellow, University of Canberra

Danielle Wood, Chair of the Productivity Commission

Michelle Grattan, Professorial Fellow, University of Canberra

Housing supply in Australia will be a key battleground in the election campaign. With home ownership more and more out of reach for young and not so young Australians, red tape and low productivity are strangling the builder industry just when it needs to be stepping up.

The productivity Commission, the government’s independent think tank, has a new report report pointing to ways governments need to address the issues. In this podcast we talk to commission chair Danielle Wood about the housing challenge, as well as Australia’s parlous productivity performance generally and her drive to get some fresh ideas on how to improve it.

On one of the report’s main recommendation, cutting red tape for construction approvals, Wood says,

I like to think of regulation as a bit like a hedge. […] There’s almost an unwavering tendency for it to grow over time if you don’t clip it back. And I think in housing that’s particularly true. You have multiple levels of government involved, particularly local governments and state governments. Lots of different policy objectives in play. So obviously, quality and safety being pivotal, local amenity, heritage, traffic, environmental, accessibility.

Lots and lots of decisions are taken, often without considering the trade off. And every time we add new regulations or more complex regulations, that imposes a cost. And ultimately that is a drag on housing, productivity and supply.

So what should be done?

We’ve certainly said we think there should be a good look at the national construction code, which is one source of regulatory burden where we think there’s scope to improve. I would love to see state governments – and I think they are turning their mind to this – to look at this question of just the sheer amount of regulation, the timeframes for approvals and look to ways to streamline the burden and also help develop and builders coordinate their way through that process more smoothly.

On why productivity in construction in particular has fallen so far, Wood explains,

You do not see many sectors go backwards in productivity  over that sort of time horizon. One reason is that our homes are bigger and better quality. So I think that is worth noting. If we adjust for that, productivity has declined, but only by 12% rather than 50%.

We haven’t seen the same sort of innovation in homebuilding that we’ve seen in other parts of the economy. We still essentially build most houses the same way we did 100 years ago so we haven’t had that technological change driver of productivity. It’s an industry that’s characterised by lack of scale.

And then there are workforce challenges as well. And, you know, we all hear a lot about the challenge of attracting and retaining skilled trades workers. You know, that can make it hard, particularly building.

The Productivity Commission asked for submissions from the public on how to improve Australia’s productivity more generally. Wood is happy with how the initiaive is going,

It’s been worth the effort. We’ve actually ended up with more than 500 submissions in the end, And they’re from a mix from individuals, from businesses, from organisations. But for me, the beauty is being able to hear from people that we wouldn’t normally hear from in our reviews and the point is that all of us interact with aspects of government policy every day in our lives and I think we absolutely heard that through the submissions.

There were some fun ones there – high quality Japanese public toilets, more freely available free coffee. But more generally, I mean, we heard from small business owners about impacts of red tape and regulation [and] lots of interest in education policy. Unsurprisingly, again, it touches a lot of our lives, but looking for things like more work experience in schools, trying to build more industry-relevant skills into higher education.

This article is republished from The Conversation under Creative Commons license. Read it here.

Here’s why increasing productivity in housing construction is such a tricky problem to solve

By Martin Loosemore, Professor of Construction Management, University of Technology Sydney

Martin Loosemore is Professor of Construction Management at the University of Technology Sydney, Australia. He is a Visiting Professor at The University of Loughborough, UK and a Fellow of the Chartered Institute of Building. Martin was formerly Professor of Construction Management at UNSW.

This week, the Productivity Commission released its much-awaited report into productivity growth in Australia’s housing construction sector. It wasn’t a glowing appraisal.

The commission found physical productivity – the total number of houses built per hour worked – has more than halved over the past 30 years.

The more nuanced measure of labour productivity – which accounts for improvements in size and quality – has also fallen, by 12%.

Both measures put home-building productivity well behind the broader economy, something the report’s authors attribute to “decades of poor performance”.

We’ve known about this problem for a long time. The Productivity Commission’s report is well researched and makes some sensible recommendations.

Solving the underlying problem will require a coordinated approach between government, home-owners, construction companies and workers.

Measuring productivity

Housing can take many forms. However, from a productivity perspective, the process of development is essentially the same.

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In very simple terms it involves:

  • concept and initial design, feasibility, finance and business case development

  • land acquisition and due diligence

  • detailed design, development and building approvals

  • pre-construction planning and working drawings

  • construction project management

  • practical completion, final certificates and settlement, commissioning and handover.

There are no official estimates of housing construction productivity. So, the Productivity Commission used Australian Bureau of Statistics (ABS) data to create its own new measures to capture productivity across this entire process.

Falling or flat-lining productivity in this sector is a well-known long-term problem. Under the National Housing Accord, the federal government has committed to building 1.2 million new well-located homes by the end of this decade.

But in the first three months since the National Housing Accord was launched, only 44,884 homes were built across Australia. That’s about 15,000 fewer than the required quarterly target of 60,000.

The National Housing Supply and Affordability Council projects that new market housing supply will ultimately come in at about a quarter of a million homes below the accord’s target.

4 key problems

The report identified four key factors behind the malaise:

  1. complex, slow approvals, as well as delayed construction certificates and essential infrastructure connections

  2. lack of innovation and slow uptake of digital technologies and modern methods of construction

  3. the dominance of smaller building firms resulting in low economies-of-scale and project management challenges associated with supply chain fragmentation

  4. difficulties attracting and retaining skilled workers resulting in skills and labour shortages.

The report proposes seven reform directions in response. These centre on speeding up the planning approval process, investing in research and development, and increasing workforce flexibility.

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Fixing things won’t be simple

The Productivity Commission’s report has brought a welcome focus on planning and approvals as a key element of easing the housing crisis.

It acknowledges that under-resourcing of agencies involved in the approvals process, such as local governments, has made the problem worse.

One issue with increasing the number of planning approvals processed is that you then need to have a construction industry that can build fast enough to keep up with them.

Currently, we don’t. Industry research shows since 2013, the number of workers within Australia’s construction workforce has increased by more than 25%. But they are working 2% fewer hours each year, and achieving an output that’s 25.4% lower.

Keeping an eye on quality

Amid any push to speed up approvals, we need to be mindful of the possible risks. Loosening building regulations can increase the risk of quality problems and inappropriate development.

If widespread across the industry, such problems can cause significant personal and economic harm to households, social and economic costs for society. They can also increase building costs, insurance premiums and strata fees.

This problem calls for a range of tools to reduce the risk of compromising on quality when regulations are loosened or changed. New South Wales has two key pieces of legislation in place that could act as a model for other states.

One allows owners to sue if a person who carries out construction work fails to exercise reasonable care. The other allows the Building Commission to investigate building work and require rectification of defects for up to six years.

NSW also has an independent builder trustworthiness rating scheme. This is known as iCirt and operated by credit rating agency Equifax.

Innovation isn’t a panacea

A major feature of the Productivity Commission’s report discusses the housing construction industry’s low innovation culture.

However, much innovation is hidden from view, since it occurs at the manufacturing stage. And innovation itself is not a panacea.

While calling for greater innovation seems obvious on the surface, research has shown its ability to increase productivity depends on a wide range of factors and is certainly not guaranteed. It can even increase costs and reduce quality and productivity if not managed effectively.

More holistic workforce planning

The report also highlights issues with attracting and retaining a skilled workforce. Issues include low apprenticeship take-up and completion rates, restrictive trade pathways, and large infrastructure projects drawing talent away.

This raises a bigger issue. Despite workforce planning across the industry by the Construction Industry Training Board the industry still seems to be constantly reacting to a skilled labour shortage rather than planning ahead to predict and prevent one.

This article is republished from The Conversation under Creative Commons license. Read it here.

Nature and shops: here’s what people told us they want most from urban planning

By Iain White, Professor of Environmental Planning, University of Waikato, Silvia Serrao-Neumann, Associate Professor of Environmental Planning, University of Waikato and Xinyu Fu, Senior Lecturer of Environmental Planning, University of Waikato

Urban planning has a long history of promoting visionary ideas that advocate for particular futures. The most recent is the concept of the 15-minute city, which has gained traction globally.

But empirical evidence on public preference for what people want is surprisingly thin on the ground.

To help address this gap, we conducted a national survey (1,491 responses) in Aotearoa New Zealand to find out what amenities people want to have easy access to, how much time they prefer to spend getting there, and how this differs between different groups in the population.

Our recently published research provides more depth. The headline messages have significant implications for politicians, policy-makers and others interested in planning cities to better meet the needs of citizens.

People want green space and local shops

The first message is that visions such as 15-minute cities tend to promote the idea of livability connected to easy access to multiple amenities – from education to employment and culture.

However, when we asked what amenities people prefer the most, two things came out far above others: local nature and local shops.

This finding is important as it allows cash-strapped local authorities to prioritise and sequence spending. It also supports the agenda of those who are advocating for an increase in urban green space or local living.

A complete shift to a 15-minute city can be daunting, but investment in these two specific areas could be an excellent first step in improving livability in a way that reflects what citizens want from planning.

We also asked people for their preferred maximum travel time to their most preferred amenity for a one-way trip, using different modes. Nationally, the data were consistent, identifying around 20 minutes as a good rule of thumb for maximum preferred travel time.

Importantly, this time was broadly similar regardless of the transport mode chosen. Whether walking, cycling or travelling by micro-mobility modes such as e-scooters, people wanted to spend no more than 20  minutes doing so – even though the distances vary.

It is important to acknowledge this time is a maximum, not a preference. It is better understood as a threshold or decision point after which people are much more likely to drive or choose not to travel.

This evidence has a wider resonance.

First, it strongly reinforces the 15-minute city or 20-minute neighbourhood as accurately reflecting public preferences for travel time to reach destinations, especially as this figure was consistent regardless of the travel mode.

Second, people are willing to walk further than we typically plan for.

For example, planners may typically apply a walkable catchment of an 800-metre radius around the central business district or transit nodes to allow for higher-density zoning. This distance is a walk of about ten minutes. Our data suggest this area could be expanded and more opportunities created to increase housing volume and diversity.

One size does not fit all

One crucial aspect for improving livability is recognising differences in people’s ability or willingness to walk, cycle or use micro mobility. To explore this, our survey asked people how comfortable they were using each active travel mode after dark.

We reveal a strong gender difference. For example, 41% of people said they were uncomfortable walking after dark. Of this group, 86% were female.

For all travel modes, there was a similar story with females more likely to change travel behaviour, mostly due to safety concerns. The survey also revealed that people with a disability are significantly less comfortable travelling after dark than those without.

This finding is useful for those concerned with equity. Citizen movement is typically modelled on the idea of an able-bodied person who feels equally comfortable in all urban spaces at all times of day or night.

Without considering difference across populations, advocates may promote an equitable 15-minute city during the day and an inequitable car-dependent one after dark.

This also highlights that any new urban strategy or investment needs to understand existing behaviour and the risks of making current disadvantages worse.

Agendas such as 15-minute cities hold significant value in planning for wellbeing and health, economic activity or decarbonisation. They also hold potential for planners to engage with communities to explain the value of planning, the kind of lifestyle citizens can expect in the future, and why authorities are spending public money.

But urban researchers also need urban concepts to be grounded in evidence to avoid becoming the next urban imaginary accused of failing to be transformative.

Our research helps provide some clarity. The general message is that people want easy access to green spaces and local shops more than anything else and they want to spend no more than 20 minutes getting there.

It also highlights context and differences between groups. We need to marry promising urban concepts to empirical research designed to support people’s preferences and encourage movement and equity.

This article is republished from The Conversation under Creative Commons license. Read it here.

Home ownership is slipping out of reach. It’s time to rethink our fear of ‘forever renting’

By Dorina Pojani, Associate Professor in Urban Planning, The University of Queensland

A wide range of voices in the Australian media have been sounding the alarm about the phenomenon of “forever-renting”.

This describes a situation in which individuals or families are unable to transition from renting to home ownership, due to rising property values and wages that can’t keep up.

Forever-renting is often framed as a terrible condition that should be avoided at all costs – that renting is only acceptable in the short term, as an individual or family saves for a down-payment.

The underlying implication is that the ultimate goal in life for just about every Australian should be to own a house – or at least a condominium unit.

This only serves to stigmatise renters, who currently make up nearly a third of Australian households. Demographic research indicates about 15% of Australia’s population changes address every year. Many of these moves require rental accommodation.

And, yes, millions of Australians will rent for their whole life.

Clearly, we need to change our thinking around renting to bring it into step with reality. We must accept that the proportion of renters may never go down – or may even increase – and that that’s not necessarily a bad thing.

Where did this attitude come from?

The Australian tradition of home ownership was established in the early decades of European settlement. To make what we now call the “Australian dream” happen, the continent had to be treated as a tabula rasa, or blank slate. A mass of Indigenous people were dispossessed.

Migration to Australia offered impoverished Britons an opportunity to own a house and plenty of land. In the old country, in contrast, real estate ownership had been a privilege of the gentry. Postwar waves of immigrants from southern Europe and East Asia were also intent on home ownership.

In a low-density nation with smallish cities and cheap land, owning a home made sense. Now, urban land is no longer cheap and our cities have sprawled beyond what’s sustainable.

Australian cities are characterised by low-density urban sprawl.

Renting can have advantages

The first step towards rethinking renting as a norm is acknowledging it can have some significant and often overlooked advantages. For some, renting is a lifestyle preference.

Ownership comes with burdens such as house and garden maintenance. This makes renting much more convenient and carefree for some demographics, including young people and older adults.

Another key advantage of renting is the employment flexibility it can provide. Renters can look for work outside their commute range and are less tied to particular employers.

There’s some evidence that high levels of home ownership could even damage the overall labour market.

Previous research by the US National Bureau of Economic Research has shown that increasing home ownership leads to less labour mobility, longer commutes, and fewer new businesses because homeowners are less likely to move.

Safe as houses?

One common argument against renting is that investing in your own home is a “safe bet”. But we perhaps need to rethink this unquestioned reliance on housing as a store of wealth. Those who enter the housing market for investment purposes should be aware of several issues.

Over the long term, housing prices have historically shown a general upward trajectory, driven by population growth and limited land supply in desirable areas.

In the short term, however, housing prices can be quite volatile. They may move up, down, or stay the same. This depends on broader economic cycles, market conditions and interest rates.

Think of the housing bubble in the United States, which led to a global recession in 2008, or the current downturn in China.

The cycles in property prices are often worsened by psychological biases that can lead to overoptimism during booms or panic during busts. Investors may win or lose.

Compounded by climate change

In the contemporary era, we also need to factor in climate change. Areas that are currently desirable may become unappealing before too long – due to heatwaves, floods or fires.

Natural disasters, or even just growing disaster risks, can prompt large drops in property prices and massive population movements.

Fire crews survey the destruction caused by the wildfire in the Pacific Palisades neighbourhood of Los Angeles. Climate risk will continue to challenge our assumptions about the safety of housing as an investment.(AP pic)

To illustrate: during the pandemic, South East Queensland began to draw many domestic migrants as other states struggled to contain the virus.

People from cooler southern states were also attracted by the region’s mild winter climate. In 2024, Brisbane became Australia’s second-most expensive city for property values.

That might appear to bode well for property buyers who’ve invested millions of dollars. But one 2019 study has predicted that temperature rises could make Brisbane “unbearably hot” by 2050.

In this context, renters may be more adaptable than owners.

A more renter-friendly Australia

None of this is to argue that everyone should be a renter, or that renters should be left to the whims of the market.

In Australia, current rent increases are outpacing both wage growth and inflation (CPI). The rental affordability crisis has driven a recent surge in homelessness.

There is a wide range of policy tools available to us, many of which have been shown to work relatively well in other countries and could be adopted here.

These include:

More vulnerable renters, including people with disabilities, single parents, victims of domestic abuse, those on low incomes, and older retirees, need extra protections.

The supply of rental units should also be increased, through build-to-rent and granny flat construction, for example.

Landlords should not be vilified either. In an unregulated market, they are often cast as “robber barons” and “social parasites”.

If tenants were protected from excessive rent increases and evictions, landlordism could also be recast as an essential service that yields reasonable profits to providers.

This article is republished from The Conversation under Creative Commons license. Read it here.

What’s shaking up the housing market in 2025?

By Eliza Owen, Head of Research at CoreLogic Australia

Eliza Owen was appointed the Head of Research at CoreLogic Australia in 2020.

She has spent almost a decade as a housing market researcher, reporting extensively on key issues including housing affordability, credit conditions and the impact of the COVID-19 pandemic on housing market performance.

In addition to her role at CoreLogic, Eliza is passionate about sharing her knowledge with broader consumer audiences, and serves as a state advisory council member for NSW/ACT with CEDA.

Eliza is also a popular keynote speaker, having presented to thousands in real estate, construction, banking and finance and property development, as well as consumer audiences.

As we step into 2025, the economic landscape is shifting. Pandemic-driven trends like high inflation and overseas migration are easing. The RBA cash rate might finally drop, with lending policies playing a role in how this impacts the market. Unemployment is set to rise, but those with secure jobs will enjoy higher real incomes. Residential construction is in transition—workloads are high, but new projects are slowing.

So what does it all mean for the market?

Lower interest rates to boost housing values and transactions, but not by much

Interest rates might be cut in early 2025 as inflation continues to drop, with annual core inflation falling to 3.2% in November (below the RBA forecast of 3.4% for December). Two of the big 4 banks are currently expecting a rate cut in February.

The industry should brace for the possibility that rate reductions may have little effect on home values and transaction activity this year. Even if the average mortgage rate drops by 135 basis points (the lower-bound of forecasts for the cash rate at the end of 2025), a median-income household could reasonably afford a $593,000 home — still much lower than the current median home value of $815,000. A rate of 3.1% by the end of 2025 is also higher than the pre-COVID, decade average (2.55%) that supported strong lending volumes in the 2010s.

A potential window into how Australians would respond to higher borrowing capacity is the Stage 3 tax cuts from 2024. While this would have boosted borrowing capacity through higher net income, the housing market saw an anaemic response, with growth in values slowing from June 2024.

Lending policy could amplify, or nullify, the impact of rate reductions

Changes to macroprudential settings (the policies used by regulators to reduce credit risk and support financial stability), will likely affect the availability of housing finance. Lowering the mortgage serviceability buffer from 3.0 percentage points to 2.5 percentage points (a reversal of the increase in October 2021) could boost home buying activity through increased borrowing capacity. However, this action from the regulator isn't guaranteed.

According to APRA's November statement, the risk of financial shocks hasn’t abated, and regulators have warned that high household debt levels are a major concern. If household debt levels rise as interest rates fall, APRA could introduce new measures, such as limits on high loan-to-value ratio (LVR) or high debt-to-income (DTI) lending, such as what the RBNZ has implemented in New Zealand.

Unemployment to rise, but unlikely to negatively impact housing values

The RBA forecast unemployment to rise to 4.5% by the end of 2025, but so far the labour market remains tight, and the unemployment rate is at just 4.0% (the pre-covid, decade average was (5.5%).

Assuming that the labour market does loosen this year (which is an expected result of lower inflation and economic demand), we might not expect much of an impact on the housing market. For the past two decades, there has been a mildly positive relationship between the unemployment rate and housing values, potentially because periods of rising unemployment trigger lower interest rate settings to stimulate the economy. For those who remain employed in 2025, lower inflation will also provide a boost to real incomes that could be put towards a deposit or housing transaction costs.

The devil will be in the detail of a looser labour market and its impact on housing in 2025. For example, rising periods of unemployment have historically impacted younger Australians (i.e. 15–24yr olds) more than other age groups, and these younger Australians are more likely to be concentrated in the rental market than in home ownership, thus having more of an impact on rental demand. However, there may be localised impacts on housing demand and value depending on industries and regions that face greater job loss.

Net overseas migration will continue to slow, taking some demand pressure off the rental market

Net overseas migration peaked at 556,000 in the year to September 2023 and fell to 446,000 by June 2024. According to the Centre for Population, it is expected net migration will continue declining to about 340,000 by mid-2025 as the 'COVID-catch up' effect fades as more short-term migrants leave.

While overseas migration isn't the only factor flowing through to rental demand, significant changes in migration patterns have impacted the market. The chart above compares the historic exposure of individual SA4 markets to net overseas migration with rental value changes between September 2023 and December 2024. Areas with high migration saw a substantial increase in rents in 2022 when border restrictions eased. Now, the slowdown in overseas migration appears to be reducing demand more quickly in these same rental markets.

Residential construction will remain low, but cost pressures could stabilise

New home approvals are low, with only 169,000 new dwellings approved by November 2024—a 24% drop from the decade average and 30% below the Housing Accord's average annual target (240,000). High construction costs, land costs, and interest rates, along with potentially diminished buyer confidence in the new home sector, have dampened approval numbers. There are some signs of a pickup, with dwelling approvals bottoming out in early 2024, which is most obvious in high capital growth markets like WA, SA and QLD.

Interestingly, about 250,000 approved dwellings are still incomplete. The slowdown in building activity will eventually ease capacity constraints, allowing for more timely delivery of homes and clearing the backlog. However, competition from public infrastructure sector for labour and input materials is likely to remain substantial. Continued government support and business investment are essential to boost productivity in residential construction.

Overall, despite rate cuts and easing inflation, 2025 is expected to see lower value growth and sales numbers than last year. This could involve a shallow downturn in values at the start of the year, followed by a mild recovery as inflation and interest rates move lower, real incomes rise and housing supply remains low.

This article was republished with permission from CoreLogic. Read the original article here.

Oliver's insights - Goldilocks stayed for 2024, but what’s in store for investors in 2025?

By Shane Oliver, Head of Investment Strategy and Chief Economist, AMP

Key points

- The key themes for 2024 were: better than feared growth; global divergence; more disinflation; falling interest rates but with Australia lagging; and more geopolitical threats but not as bad as feared. As in 2023, returns were strong.

- 2025 is likely to see positive returns, but after the surprising calm of 2024, it’s likely to be far more volatile (expect a 15% or so correction along the way) and more constrained.

- Expect the RBA cash rate to fall to 3.6%, the ASX 200 to rise to 8800 and balanced super funds to return around 6%.

- Australian home prices will likely see further softness ahead of rate cuts providing a boost in the second half of 2025.

- Key things to keep an eye on are: interest rates; recession risk; a potential trade war; and the Australian consumer.

Another year of Goldilocks in 2024…

2024 was like a rerun of 2023 with lots of angst but it turned out okay. Key big picture themes of relevance for investors were:

1. Stronger than feared growth. Yet again the much feared recession failed to materialise. Despite the monetary tightening of 2022 and 2023 and China’s property collapse, global growth in 2024 remained just above 3%. In Australia despite a “per capita recession” economic growth remained positive albeit at only around 1% helped by strong population growth, stronger than expected growth in public spending and labour hoarding offsetting severe mortgage pain for some.

2. Global divergence. Within emerging countries, India grew around 6.5%, China grew around 4.8% (which is slow for China) but South America and the Middle East only grew around 2%. And within developed countries, US growth remained strong at around 2.8% but growth was just 0.8% in Europe and around 0.3% in Japan.

3. Further disinflation. Inflation in major countries has fallen sharply from peaks of 8 to 11% in 2022 to around 2 to 3% in 2024. Australia lagged on the way up and is doing the same on the way down.

4. Falling interest rates. It took longer to get there & rates didn’t fall as much as expected at the start of the year but most major central bank started to cut their policy rates. The RBA should start early in 2025.

5. Geopolitical threats were not as worrying as feared. In particular, the conflict in Israel widened to include Lebanon and missile exchanges with Iran but didn’t impact oil supplies and the oil price was little changed, the Cold War with China didn’t produce any major disruptions and Donald Trump’s re-election boosted US shares.

…resulted in strong returns for investors

There were a few bumps along the way for shares – notably with an inflation scare in April and a growth scare into August – but they were relatively minor (with brief falls in shares off less than 10%). For diversified investors 2024 was another strong year.

  • Global shares had a strong year as rates fell, albeit less than expected, and profits were stronger than expected.

  • US shares outperformed reflecting its stronger economy, tech exposure and a boost from Trump’ s re-election promising US friendly policies. By contrast non-US shares underperformed, particularly Eurozone shares which weren’t helped by French political uncertainty. Chinese shares got a boost from more stimulus.

  • Australian shares did well in anticipation of stronger profits and rate cuts ahead but underperformed with China worries and no rate cut.

  • Government bond returns were constrained by smaller than expected rate cuts and worries about Trump’s policies driving higher inflation.

  • Real estate investment trusts saw solid returns in anticipation of better commercial property returns ahead.

  • Unlisted assets were constrained by the valuation effect of high bond yields with office property seeing losses from reduced space demand.

  • Australian home prices rose with the housing shortfall, but “high” rates saw gains stall into year end with prices falling in several cities.

The key threats for 2025

Just as was the case for 2024 the worry list for 2025 is long and maybe even more threatening given the uncertainty Trump’s policies pose:

  • Share valuations are less attractive, with the key US share market trading on a 26 times forward PE and the earnings yield bond yield gap is negative. Australia is not so bad at 20 times but it’s not cheap.

  • Uncertainty remains around how much the Fed, the RBA and some other central banks will cut rates as core inflation is still not at target.

  • Bond yields could continue to rise on the back of Trump’s tax cut and tariff policies, placing pressure on shares.

  • The risk of recession remains, particularly in the US if rising bond yields prevent a recovery in manufacturing and housing and in Australia if the RBA leaves rates too high for too long.

  • A global trade war in response to Trump’s threatened tariffs could add to this risk particularly in Europe and Asia.

  • Risks for the Chinese economy are high and could be amplified as Trump ramps up tariffs & if Chinese policy stimulus remains modest. There are signs of bottoming in China’s property market though.

  • Geopolitical risk is high: “maximum pressure” from Trump to resolve the war in Ukraine and Iran’s nuclear aims could see the Ukraine and Middle East wars getting worse before they get better threatening higher oil prices; similarly tensions with China could escalate; political uncertainty will likely be high in Europe with issues around the French budget and another potential election and a German election in the first half (although the latter is likely to be benign with the centre right Christian Democrats likely to “win”); and the Australian election is due by May although it’s unlikely to lead to a radical change in economic policy but does run the risk of even more public spending.

These considerations point to at least a high risk of increased volatility after the relative calm of 2024.

Reasons for optimism

However, despite these worries there are several grounds for optimism. First, inflation is likely to continue to trend down as labour markets are continuing to ease, demand growth is still slowing and commodity prices are in a mild downtrend from their 2022 high.

Second, central banks are likely to continue cutting interest rates. This is likely to range from the Fed which will become more gradual and cut to around 3.75% to the ECB which is likely to cut to 1.5% (partly to offset the negative impact of a possible trade war and possible fiscal austerity in France). This is likely to include the RBA where quarterly trimmed mean inflation is likely to soon drop to around 0.6-0.7%qoq (or 2.4-2.8% annualised), enabling it to possibly start cutting in February but by May at the latest taking the cash rate down to 3.6% by year end.

Third, global growth is likely to slow in 2025 but only to just below 3% with US growth around 2.5% helped by optimism on Trump’s policies, Chinese growth around 5% with more stimulus offsetting a potential trade war with the US and Japanese and European growth around 1%. Global growth is likely to strengthen in the second half helped by rate cuts. Australian growth is likely to edge up to 1.8% helped by rising real wages, tax cuts & rate cuts and this should see profit growth return.

Fourthly, if recession does occur it’s likely to be mild as most countries including Australia have not seen a spending boom that needs to be unwound and traditionally makes recessions deep. And the Chinese government is likely to continue to do just enough to keep growth around the 5% level. Currently global business conditions surveys are still around levels consistent with okay global growth.

Finally, while Trump’s policies will create a lot of uncertainty and disruption as he uses tariffs and other things as part of a maximum pressure strategy to negotiate better outcomes for the US his first term as President tells us he ultimately wants to see shares up, not down. He was also elected on a mandate to get the cost of living down for Americans, not to push it up. This could ultimately mean more of a focus on his tax and efficiency policies as opposed to his populist measures like tariffs.

Implications for investors

Just as trees don’t grow to the sky, 20% plus returns from global shares are not sustainable. So, we expect good investment returns over 2025, but it will likely be a rougher and more constrained ride than in 2024.

  • Global and Australian shares are expected to return a far more constrained 7% in the year ahead. Stretched valuations after two strong years, the ongoing risk of recession, the likelihood of a global trade war and ongoing geopolitical issues will likely make for a volatile ride in 2025 with a 15% correction somewhere along the way highly likely. But central banks still cutting rates with the RBA joining in and prospects for stronger growth later in the year supporting profits should still see okay investment returns.

  • Expect the ASX 200 to end 2025 at around 8,800 points.

  • Bonds are likely to provide returns around running yield or a bit more, as inflation slows to target, and central banks cut rates.

  • Unlisted commercial property returns are likely to start to improve next year as office prices have already had sharp falls in response to the lagged impact of high bond yields and working from home.

  • Australian home prices are likely to see further weakness over the next six months as high interest rates constrain demand and unemployment rises. Lower interest rates should help from mid-year though and we see average home prices rising by around 3% in 2025.

  • Cash and bank deposits are expected to provide returns of over 4%, but they are likely to slow in the second half as the cash rate falls.

  • The $A is likely to be buffeted between the positive of a narrowing in the interest rate differential between the Fed and the RBA and the negative of US tariffs and a potential global trade war. This could leave it stuck between $US0.60 and $US0.70.

What to watch?

The main things to keep an eye on are: interest rates; recession risk; a likely trade war; China’s property market; and the Australian consumer.

This article was republished with permission from AMP. Read the original article here.

Build to Rent will produce more homes for tenants, but not for those most in need

By Hal Pawson, Professor of Housing Research and Policy, and Associate Director, City Futures Research Centre, UNSW Sydney

Part two of the government’s stalled housing legislation finally passed federal parliament on Thursday. The Build to Rent tax reform bill aims to boost investment in apartment blocks designed and constructed for rental occupancy and retained in single ownership.

Other than as purpose-built student accommodation, this form of development remains rare in Australia.

Instead, our private rental market continues to be dominated by small-scale “mum and dad investors”. Only since around 2017 have Build to Rent projects begun to appear in some Australian capital cities.

By mid-2024, just 5,000 units had been completed with 11,000 under construction.

Australian governments now see expanding this form of housing as appealing. In the long term, that might bring Australia more into line with countries such as the United States and Canada, where large-scale institutional investment in rental housing is long-established.

How does the bill work?

Under the new bill, the 30% withholding tax rate for foreign funders of residential Build to Rent developments is equalised with that for commercial and industrial property, at 15%.

At the same time, the Build to Rent capital works tax deduction rate is increased from 2.5% to 4%. This allows expenses to be depreciated for tax over a 25-year span, rather than 40 years as at present. This brings Build to Rent into line with the Australia Tax Office’s treatment of serviced apartments, making projects more viable.

In attempting to step up Build to Rent development, high significance is attached to enabling overseas investment.

Because they already invest at scale in Build to Rent development in other countries, many large international players are already familiar with this type of development. Pension funds, insurance companies and sovereign wealth funds are attracted by its low risk and reliable returns.

More housing that’s more secure

As argued in a recent official report, Build to Rent housing could help fulfil several significant housing policy objectives.

First, when developers can diversify away from solely focusing on building to sell, there could be an overall increase in housing supply.

Second, homes are likely to be more secure for tenants. This is because the prime motivation of Build to Rent investors is often long-term rental income.

Small landlords, on the other hand, are usually motivated by capital gain that can be realised only through sale.

Third, multi-unit buildings commissioned to be kept by a single owner should incentivise utility, durability and energy efficiency in design and construction.

Finally, Build to Rent could be relatively resistant to housing market downturns. This benefits both the development industry and the national economy.

It’s not that simple

At the same time, Build to Rent does not inherently contribute to affordable housing.

At least in its initial form in Australia, it is typically a “premium product”, mainly in well-connected locations and targeted at moderate to high income earners.

In early 2024, for example, two bedroom apartments were advertised in Sydney and Melbourne at weekly rents in the $800-$950 range, according to my own survey at that time.

But eligibility for the new (and lower) rate of withholding tax offered in the Build to Rent bill is conditional on a proportion of apartments in qualifying projects being made available as “affordable prices” – that is, a rent discounted from the market rate.

While appealing in principle, the detailed proposal sparked controversy around the proposed definition of “affordable housing”, the projects that would be covered and the way that designated “affordable” units would be managed.

As amended in the Senate, qualifying developments will need to include 10% affordable tenancies, with rents set at 74.9% of market value or no more than 30% of household income, whichever is the lower.

Affordable units (including a minimum proportion rented to low income earners) will be managed by community housing providers for at least 15 years.

Given the Property Council’s estimate that the new framework could yield a total of “over 80,000” Build to Rent apartments over the next decade, this could generate 8,000 good quality units affordable to moderate income earners.

The government also agreed to the retrospective application of the new tax regime for projects already under construction or recently completed.

But this is not a free gift. It’s similarly conditional on 10% of the units being designated as affordable. These will form an “advanced package” of around 1,200 sub-market price tenancies coming online over the next 12 months.

Last-minute negotiations also saw the addition of the pledge that all units – affordable and market price – will come with five-year tenancies and a ban on no grounds evictions.

More could be done

Like the Help to Buy initiative, when viewed within the context of the wider housing crisis, this scheme is another micro-measure.

It has little or no relevance to headline concerns around home ownership affordability, low-income rental stress and homelessness.

But, in combination with significant state tax changes enacted in recent years, it should help in establishing a new component in our rental market. One that – at least for moderate to high income tenants – will widen choice and improve quality.

And, if proponent boasts are valid, could be a more customer-centric form of market rental than the traditional Australian norm.

However, the requirement for including affordable units in this new and, as yet, financially marginal form of development raises other possibilities. Why don’t such obligations exist for the vast bulk of housing constructed as build to sell? A proposal for just such a framework, sometimes known as “mandatory inclusionary zoning”, is in development.

Even if imposed at an extremely low rate (like 5%) on homes built in high land value areas (Sydney and Melbourne, for example) this could generate a vastly greater affordable housing gain.

This article is republished from The Conversation under Creative Commons license. Read it here.

Why Monday is the most dangerous day on a building site

By Milad Haghani, Senior Lecturer of Urban Risk & Resilience, UNSW Sydney

Australia’s construction industry employs more than 1.3 million workers. That’s about 9% of the workforce.

But construction sites can be dangerous workplaces. There are also more accidents on a Monday than any other weekday, a pattern we see in many countries.

A number of factors combine to give us this “Monday effect”. And we can address these and other issues to reduce the number of avoidable workplace accidents on Mondays and other days of the week.

Construction is dangerous

The construction sector has higher rates of workplace injuries than the national average.

In 2023, the industry reported 45 workers had died, an increase from the five-year average of 33.

Construction workers most commonly die after being hit by moving objects. Deaths after falls, trips and slips are the next most common reasons.

The 2022–23 financial year saw more than 16,600 serious workers’ compensation claims in the construction sector. The median compensation now stands at A$18,479, with a median work time lost of 8.5 weeks – both up from previous years.

The ‘Monday effect’

Various studies across different regions confirm the “Monday effect” in construction. For example, a Chinese study found fatal accidents were 12.6% more common on Mondays compared with other weekdays. There was a similar trend in Spain and Hong Kong.

We also see the “Monday effect” in other industries, such as agriculture, forestry, mining and manufacturing.

A Spanish study that looked at the records of nearly 3 million occupational accidents, including construction, confirmed the Monday effect across industries, in companies of all sizes, for all types of workers, and for different types of injury.

Combined data of all occupational accidents in Queensland also confirms the Monday affect.

Why Mondays?

Construction accidents are more likely on a Monday for many reasons.

For instance, falling asleep late on Sunday night and having poor-quality rest the night before the start of the working week contributes to “cognitive failure” and errors at work on Monday.

Mondays tend to involve the start of new tasks or projects. This can introduce unfamiliar risks.

Site conditions, including the weather, may also change over the weekend, creating unexpected hazards. For instance, strong winds over the weekend could cause scaffolding or unsecured materials to shift, increasing the risk of accidents on Monday.

We need to address the root causes

A study into the safety and performance of Australia’s construction industry emphasised being proactive in anticipating and preventing accidents rather than taking measures after accidents have occurred – on Mondays or on other days of the week.

The study drew on in-depth interviews with 30 industry professionals across 14 companies to identify several factors contributing to construction accidents:

  • unrealistic deadlines, which may lead workers to rush and cut corners to get the job done on time

  • a shortage of skilled labour, meaning some workers might be doing work they are not qualified to do

  • workers afraid to speak up about safety concerns, which can lead to potential hazards not being reported and resolved

  • complex and unfamiliar bespoke builds, which may introduce unique risks and challenges workers may have not yet encountered

  • inadequate risk assessments of human factors, which include fatigue, stress, or cognitive overload, and can lead to errors and unsafe decisions on site

  • rushed training programs, particularly for safety, which can leave workers ill-equipped to handle hazards or follow proper procedures.

What can we do to prevent accidents?

Part of addressing some of these issues involves fostering a workplace culture where safety is viewed as a core value and a shared responsibility between employers, supervisors and workers.

In construction companies where safety is treated as a “psychological contract” – an unwritten but mutual obligation between workers and supervisors – workers are better equipped to identify and address safety hazards.

Awareness campaigns highlighting issues such as the “Monday effect” could also encourage workflows to be adjusted to reduce the risk of an accident. This could include scheduling less hazardous or less complex tasks on Mondays to allow workers time to get back into the swing of things.

What else can we do?

Technology may also help prevent accidents.

For example, wearable sensors on a wristband or smartphone could identify, track and monitor workers’ body posture. These sensors might detect unsafe lifting practices, excessive bending, or prolonged periods in static or awkward positions. These are factors that can contribute to ergonomic risks and injuries.

Augmented reality may be be used to simulate tasks to help workers practise techniques safely.

Artificial intelligence could analyse camera vision to monitor work sites for unsafe activities and to flag hazards.

But concerns about cost, privacy and convincing the industry these investments are worthwhile are among barriers to introducing these technologies.

Money talks

Raising awareness about the economic costs of workplace accidents may shift attitudes and priorities.

A 2019 Australian study found the mean cost of a construction accident is $2,040 to $6,024,517. This depends on whether the accident results in a short or long absence from work, someone is partially or fully incapacitated, or someone dies.

A compensation payment, loss of income or earnings, staff training and retraining costs, social welfare payments, as well as medical, investigation and carer costs are among components in this estimate.

Aim for zero deaths

Occupational deaths and injuries on construction sites should not be dismissed as unfortunate mishaps. They are a symptom of multiple, systemic factors that need to be addressed through deliberate action and a commitment to safety.

Just as road safety initiatives aim for zero fatalities, the construction industry should set its sights on achieving zero workplace deaths.

This article is republished from The Conversation under Creative Commons license. Read it here.

Would a mandatory five-day working week solve construction’s work-life balance woes?

By Martin Loosemore, Professor of Construction Management, University of Technology Sydney and Suhair Alkilani, Senior Lecturer in Construction Management

Working practices in the construction industry have been labelled a relic of a bygone era – 64% of employees work more than 50 hours per week.

Long working hours can pose significant risks to people’s physical and mental health, relationships, workplace productivity and safety.

Construction is also struggling to attract and retain women. In New South Wales, about one-third of companies with fewer than 200 employees have no female employees at all.

These are serious problems for an industry under pressure to deliver 1.2 million new homes and A$230 billion of infrastructure over the next five years. Clearly, something needs to change.

One proposal is to mandate a five-day week across the sector. On face value, it may seem like common sense. Making the construction sector a more attractive place to work could attract more talent and, by doing so, alleviate other pressures.

Our research questions this assumption, highlighting that without careful design, such a proposal could have significant unintended negative consequences.

Work–life balance

To investigate the potential impacts of a shorter work week on work–life balance, we surveyed 1,475 people and conducted interviews with 111 people from across the NSW building and construction industry. We also examined leading international peer-reviewed studies.

We found that the relationship between a healthy work–life balance and a shorter working week is much more nuanced than the current debate suggests.

There certainly was evidence of unhealthy working hours in some parts of the industry. Of the people we surveyed, 39.8% consistently worked more than five days per week.

We also found 26.1% worked more than 55 hours per week, and 36.7% more than ten hours per day.

But we should be careful not to generalise. Young people, those in relatively junior roles and workers on sites – especially salaried managers and supervisors – were found to be doing the heavy lifting in terms of hours and days worked.

This was especially true on large inner-city commercial, residential and infrastructure projects.

Across all respondents, people worked an average of 50–55 hours per week, and just over five days. More than 60% said they had satisfactory, good or very good work–life balance.

Different needs

We also found that not everyone’s work–life balance will benefit from simply reducing working hours.

For construction workers, this depends on a wide range of factors, such as:

  • age

  • caring and family responsibilities

  • financial circumstances

  • how easily a particular job can be done in five days

  • personal attitudes towards work.

It’s also not clear whether a shorter working week would increase female participation.

Across men and women surveyed, high salaries were widely regarded as adequate compensation for the high hours worked. Some research has even shown women might be less likely to leave the industry than men.

Our findings suggested women who take on the weight of family responsibilities could be especially disadvantaged, if they were forced to work even longer hours during the week to make up for the lost weekend.

However, most respondents saw the delineation between men and women as increasingly irrelevant and based on outdated assumptions. Most argued that the industry needs to be made more appealing to both men and women.

The industry needs to be made more appealing to both men and women.

Strong support for a shorter week

Not surprisingly, we found strong support for a shorter working week. However, it’s a bit of a leading question.

We found that few people were willing or able to take a pay cut, work longer hours or lift their productivity during the week.

Many people were also worried about potential impacts on their projects, employers and colleagues. Few employers and clients said they were able or willing to absorb the costs of a shorter working week.

Impact on projects

Depending on a wide range of factors identified in our report, the consequences of moving the industry to a five-day week varied.

We found it could increase the time it takes to complete projects by 5–25%, and costs by 0.4–4%.

The current “hard five-day week” model being advocated for the industry – where sites are shut down on weekends – involved the greatest potential costs.

Importantly, we found subcontractors were currently underpricing five-day-week projects by as much as 20%, because they could spread the costs across other six-day projects.

If a five-day week were mandated across the entire industry, this cost increase could be added to the costs estimates above.

The jury is out

The jury is still out on the pros and cons of a mandatory five-day week in construction.

We found that a healthy work-life balance for everyone is most effectively achieved by providing people with greater flexibility and control over when, where, how and how long they work.

If flexibility can be improved for everyone in the industry, then there is no need to incur the potential risks of a mandatory five-day week to individuals, employers and clients of the industry.

If we insist on adopting a five-day week, then a soft five-day week where sites are flexibly kept open on weekends may be the better option.

This article is republished from The Conversation under Creative Commons license. Read it here.

How our regions can help make Australia’s growing cities more sustainable

By Peter Newton, Emeritus Professor in Sustainable Urbanism, Centre for Urban Transitions, Swinburne University of Technology; James Whitten, Research Fellow, Department of Architecture, Monash University; Magnus Moglia, Associate Professor in Sustainability Science, Swinburne University of Technology and Stephen Glackin, Senior Research Fellow, Centre for Urban Transitions, Swinburne University of Technology

Newcastle

The way we organise our cities and regions creates problems everywhere. We’re facing difficult and polluting drives to work, a lack of affordable housing, and urban designs that lead to car dependency and are bad for our health.

For example, poor levels of walkability are associated with higher rates of obesity, hypertension and cardiovascular disease. Parks and greenery are associated with better mental and cognitive health.

Australian cities sprawl. Many suburbs are hard to get to by public transport or cycling and walking.

Our sprawling cities use a lot of land per person. Their resource use and carbon footprints are massive. They also produce huge amounts of waste.

To resolve such issues, government planners should think beyond our capital cities. Australia needs to develop strategies that connect these capitals with surrounding regional cities to create “megacity regions”.

It’s a settlement model that could work better than our big cities do now, making urban growth more sustainable. The emergence of hybrid work, fast internet and high-speed rail favours this form of settlement.

What are megacity regions?

A megacity region, according to the OECD, is a network of urban areas linked to a capital city by home-to-work commuting. Megacity regions connect these urban centres more efficiently to make them more sustainable and productive.

An early example is the Bos-Wash corridor (including Boston, New York, Philadelphia, Baltimore and Washington DC) in North America that emerged around the mid-20th century. Megacity regions are now common across Europe (for example, Germany’s Rhine-Ruhr region including Dortmund, Essen, Duesseldorf and Cologne, and the Netherlands’ Randstad region including Amsterdam, The Hague, Rotterdam and Utrecht). The Taiheiyō Belt in Japan (including Tokyo, Nagoya, Osaka, Hiroshima and Fukuoka) is one of many Asian examples.

How ready is Australia for megacity regions?

The 2019 CSIRO Australian National Outlook explored the question “What will Australia be like economically, socially and environmentally in 2060?” Its modelling showed “stronger regions” created major benefits across transport, health, education, jobs and housing. One scenario involved 16 million people living in regional Australia by 2060, with 10 million in regional cities.

CSIRO concluded that “investing in the growth of regional satellite cities with strong connectivity to those capitals” creates many opportunities. This growth would benefit the regions while easing pressures on the capitals.

The Australian National Outlook 2019 - CSIRO

In recent years, the New South Wales government has developed ideas for Sydney to grow into a Six Cities Region from Newcastle to Wollongong.

The Committee for Melbourne has called for an Australian East Coast Megaregion to boost economic growth and attract foreign investment.

In 2023, the Victorian government indicated a statewide strategy, Plan Victoria, would replace Plan Melbourne.

However, without robust regionalisation policies, Melbourne and Sydney are likely to become sprawling megacities of ten million people or more this century. This will add to the strain on transport, infrastructure and housing.

What makes change possible?

Cities and their central business districts are important for their agglomeration effects – the accumulated benefits of concentrated social and economic activity. But this also often leads to social, economic and environmental problems.

Integrating regional cities into the economic life of their capital cities can reduce some of these problems. It can also produce many benefits, including new and more efficient industries, enhanced communication networks and stronger labour markets.

Settlement systems have evolved throughout history. Walking cities became rail-oriented cities, which became car-based cities. All these models in their day supported a daily return commute averaging one hour (Marchetti’s constant).

Our research explores how new technologies and work practices can enable a fourth transition to the megacity region. The drivers of this change include ubiquitous fast internet, hybrid work and high-speed rail.

Ubiquitous fast internet

NBN broadband data from 2012 to 2021 showed little difference between Melbourne and Victorian regional cities in the uptake of typical residential internet connections. There was a major difference for higher-speed business connections.

Major capital cities continue to act as engines of bandwidth-hungry, information economy industries in Australia. They have more high-skilled workers and higher uptake of fast internet.

Overall, the data reflected that regional cities in Victoria mostly house “population-serving” rather than “producer-services” industries. Fast internet can open up job opportunities, but is not by itself enough to decentralise knowledge industries.

Hybrid work

Working both from home and in the office has become established since COVID. Hybrid work improves sustainability, mostly by reducing car use and road congestion.

Today, only 18% of Australian knowledge workers work “only in the office”.

Not having to go into work every day means knowledge workers can live further from their workplace. This changes the employment landscape in regional centres. Many information economy jobs can be done in non-metropolitan locations where housing costs less.

High-speed rail

Fast rail systems have long been debated in Australia, with various options proposed.

Victoria introduced “faster” regional rail in 2005-06. The populations of urban centres served by these lines have since grown faster than “off-line” ones.

The gap in job growth rates between on-line and off-line centres was greater for producer services than people-serving jobs. The latter are tied more closely to demand from local residents.

Designated growth areas on the outer fringes of Melbourne had much higher population and employment growth rates, indicating that current transport polices have supported urban sprawl. High-speed rail can help urban growth to “leap over” outer suburbs to the regional cities.

What could high-speed rail lead to? In England, the advent of high-speed rail (speeds of more than 200km/hr) resulted in notably higher population growth in on‑line local area districts compared to off-line. The on-line districts, across the board, experienced a stronger shift towards information and knowledge-based industries than off-line ones. Some even outperformed outer metropolitan London districts.

Why is this important now?

Both federal and Victorian governments are preparing strategic plans to guide long-term urban development. Both have issued discussion documents for public feedback.

These documents are long on planning principles but short on mission-scale programs capable of transformative change. This sort of change is now the focus of long-term planning internationally. Land-use planning of megacity regions needs to feature strongly in Australian urbanisation plans too.

We have a once-in-a-generation opportunity to achieve urban development at a scale and in a form that can transform Australia’s settlement system.

This article is republished from The Conversation under Creative Commons license. Read it here.

Making sense of housing policy proposals

By Eliza Owen, Head of Research at CoreLogic Australia

With a wave of housing policy proposals hitting headlines, CoreLogic’s Head of Research Eliza Owen breaks down what these announcements could mean for the market and how effective they might be, covering:

  • The Federal Government’s infrastructure funding towards supporting new housing developments

  • Victoria Government’s proposed high-rise development zones near metro hubs; and the 12-month stamp duty concession for off-the-plan townhouses and units for any value and any buyer

Cheaper homes don’t make for more homes.

The contradiction at the heart of our housing challenge right now is that more supply is needed to help housing values come down. In reality though, the residential construction sector is still struggling to deliver housing with a reasonable profit margin. For private sector developers and builders, arguably home values need to rise further to support some repair in profit margins, or costs associated with delivering new housing supply need to fall. The cost of buying and holding land, developing it, putting up buildings and financing projects have all increased in recent years.

This means that in order to make new supply work, residential construction needs to be somehow distanced from the pressures of profitability and feasibility.

There’s not one approach to this, but the Coalition has responded to industry groups calling for funding of housing-related infrastructure, such as the connection to water, sewage and roads. Prior to the 1980s, it was not uncommon for state governments to fund this kind of infrastructure in partnership with land developers, which has gradually shifted to the private sector over time. This effective subsidy for the infrastructure costs associated with new housing development should help to reduce the cost burden on developers and support a kickstart of shovel ready projects. A ‘use it or lose it’ condition of 12 months would also help to bring forward commencement of approved dwellings, which according to the ABS sat at around 34,000 in the June quarter of this year (down from a high of 46,000 in the December quarter of 2017, but drifting up from a 5-year average of 32,000).

The Victorian government has also made a move toward upping supply, but the focus is more on infill.

They have announced 50 key transport areas where local planning laws would be overridden to allow high-rise apartment developments of up to 20 storeys near some stations. The question of feasibility also comes to mind: is this the right kind of supply for increasing home ownership. High density unit development in Melbourne was common in inner-city areas throughout the 2010s, but these were largely bought by investors and have not exactly led to prosperity and wealth creation for their owners. For example, in the suburb of Melbourne, CoreLogic data shows unit values are still -8.4% below the record high in May 2017. For millennials having kids and seeking a family home, high rises are also not traditionally a popular option. 2021 census data shows just 1.7% of one-family households resided in units in a nine or more storey block, compared to 82% of one-family households living in a detached house. However, units in established, affluent areas could provide an excellent downsizing option for empty nesters, freeing up more family homes.

Interestingly though, the Victorian state government has also announced an immediate, uncapped 12-month concession on stamp duty for off-the-plan townhouse and unit purchases.

Historic lending data from the ABS shows that the biggest surges in first home buyer activity have occurred during temporary, uncapped buyer concessions, because they concentrate first home buyer activity under the period the concession is available. These included the temporary boost to the First Home Owners Grant in 2008 and 2009, and the HomeBuilder scheme, which was available to all buyers but had strong take up from first home buyers. This actually does serve to improve the feasibility of unit projects in the areas earmarked for upzoning. Even without the stamp duty concession, younger Australians would likely be incentivised to take up unit living because of the cost blow out between houses and units through the pandemic. In September, CoreLogic data shows a $313,500 gap between the median house and unit value in Melbourne, up from $208,500 in December 2019.

Across both the federal and state government announcements heard in the past few days, the common threads are about enabling more housing supply. With housing at the centre of upcoming elections, no doubt more announcements about enabling supply are on the way. But all levels of government need to be careful about getting that supply right if it is going to have take up from buyers. For example, the Coalition’s proposed pause on construction code updates could have implications for the standard of new homes coming to market. The Victorian state government should take heed from the high-rise development of the 2010s, where an effective ‘glut’ in unit supply has brought down prices and rents, but it won’t deliver the same wealth creation as detached houses have for previous generations, especially if quality and size are compromised for project feasibility.

This article was origianlly published on the CoreLogic website. Read it here.

How can Australia make housing affordable for essential workers? Here are 4 key lessons from overseas

By Nicky Morrison - Professor of Planning and Director of Urban Transformations Research Centre, Western Sydney University

Essential workers such as teachers, health workers and community safety staff play a vital role in ensuring our society works well. Yet soaring housing costs in cities like Sydney, Melbourne and Brisbane are squeezing essential workers out of the communities they serve.

The issue is reaching crisis point across Australia. Anglicare Australia yesterday released a special edition of its Rental Affordability Snapshot focused on essential workers in full-time work. Housing costs under 30% of household income are considered affordable. In a survey of 45,115 rental listings, it found:

  • 3.7% were affordable for a teacher

  • 2.2% were affordable for an ambulance worker

  • 1.5% were affordable for an aged care worker

  • 1.4% were affordable for a nurse

  • 0.9% were affordable for an early childhood educator

  • 0.8% were affordable for a hospitality worker.

This trend is creating unsustainable patterns of urban sprawl and long commutes. It erodes workers’ quality of life. It also undermines public service delivery by making it harder to recruit and retain these workers in high-cost areas.

International experience, particularly in the UK where I have advised on similar policies, shows there are solutions to this crisis. These global lessons fall into four categories.

Essential workers face long commutes from home when they can’t afford to live in the communities they serve.

1. Define essential worker housing

Essential worker housing typically targets front-line public sector workers on low to middle incomes. Yet eligibility should extend to support roles, such as ambulance drivers, porters and medical receptionists, who play a vital part in enabling front-line services. They too struggle to find affordable housing near their workplaces.

Conditions of eligibility should also include a cap on household earnings.

The UK experience highlights the importance of providing both rental and ownership options. To keep key worker housing affordable and accessible over time, both types need to be priced appropriately.

Australian cities could adopt similar approaches, by requiring housing developers and community housing providers to allocate affordable housing for essential workers. Prices would be below market rates for both rentals and home ownership for the long term, and not revert to market rates. This ensures stability for public service workers.

2. Financial innovations focused on long-term affordability

Innovative financial models, such as shared equity schemes, have succeeded in the UK. These allow workers to gradually buy into their homes, creating long-term stability.

Shared equity involves the government or another investor covering some of the cost of buying the home in exchange for an equivalent share in the property. Australia could explore similar schemes to provide immediate relief while ensuring sustained affordability for future essential workers.

This approach could build on the Commonwealth’s proposed Help to Buy scheme, currently before the Senate, and existing state and territory shared equity programs. These may need refinement to better serve essential workers by, for example, adjusting income thresholds and eligibility criteria to ensure they qualify. These schemes also need to expand to cover all urban areas where housing affordability is most strained.

3. Leverage planning systems

Countries like the UK have leveraged their planning systems to deliver affordable housing for key workers. In England, planning authorities use mechanisms such as Section 106 agreements to ensure a portion of new developments is reserved for key worker housing as a condition of planning approval.

Australian states could adapt this model, setting targets within existing planning frameworks. For example, they could use Voluntary Planning Agreements to prioritise essential worker housing.

Yet essential worker housing should not displace housing for other people in urgent need. They include people who are homeless, low-income families, people with disabilities, the elderly, those at risk of domestic violence, veterans and youth leaving foster care.

4. Use public land for housing development

The use of surplus public land for essential worker housing has proven successful in several cities, including London, Amsterdam and San Francisco.

Earmarking land owned by the public sector, such as hospital or education sites, is a strategic way to deliver affordable housing near key public sector employers. It also allows staff to travel to work nearby using sustainable transport instead of cars.

Affordable housing has profound benefits

Without action, essential workers are likely to be forced into lower-quality, high-cost housing, shared accommodation, or long commutes from more affordable areas. Over time, these patterns of job-housing imbalances and urban sprawl are unsustainable. These issues are the focus of my current research, particularly in Western Sydney.

The New South Wales government has set up a parliamentary select committee to inquire into options for essential worker housing. It’s bringing much-needed attention to the housing crisis affecting key public sector roles.

Tackling these issues through targeted housing solutions has many benefits. It can help create more sustainable communities, reduce recruitment and retention difficulties for employers and ease the strain on infrastructure and services.

The key takeaway from the UK and other countries is the importance of long-term, sustainable solutions that do not shift the focus away from those most in need of housing. Australia has the opportunity to strike this balance. We need to ensure essential workers can afford to live near their workplaces while not sidelining everyone else in need of affordable housing.

This article was originally published on The Conversation. Read it here.