Australia’s Housing Crisis: Roundtable Discussions Aim to Boost Supply and Productivity

A recent economic reform roundtable in Canberra brought together industry leaders and government officials to tackle Australia’s persistent housing supply and productivity challenges. The discussions, spanning three days, focused on identifying systemic issues and potential solutions to accelerate home building and address the nation’s housing affordability crisis.

• Declining productivity in housing construction has significantly slowed the delivery of new homes over the past three decades.
• Excessive and overlapping regulations at local, state, and federal levels are identified as major impediments, adding significant cost and delay.
• There is a broad consensus on the need for regulatory reform, including streamlining planning and approval processes.
• Potential solutions discussed include pausing updates to the National Construction Code and reforming environmental approval processes.
• Encouraging investment from superannuation funds into housing projects was also a key topic.

Evidence presented at the roundtable and in supporting reports highlights a stark decline in housing construction productivity. The Productivity Commission estimates that Australia is now building half as many homes per hour worked compared to 1995. This slowdown is not attributed to a lack of skill or effort within the industry, but rather to the complex and often inefficient systems and policy settings in which it operates. These systemic issues contribute to increased costs, uncertainty, and delays, ultimately constraining the industry’s ability to meet demand.

A significant focus of the discussions was the impact of regulatory burdens. Multiple layers of regulation, including planning, zoning, environmental approvals, and frequent changes to the National Construction Code (NCC), are cited as major drags on productivity. These regulations add substantial costs, estimated by some to be as high as 50% of a home’s cost, and divert resources away from actual construction. Inconsistent planning frameworks between jurisdictions and lengthy, unpredictable approval timeframes exacerbate these problems.

Discussions explored several avenues for reform. A key proposal gaining traction is a pause on updates to the National Construction Code to allow the industry to catch up with existing regulations. There was also considerable debate around reforming environmental regulations, particularly the Environment Protection and Biodiversity Conservation (EPBC) Act, to balance environmental outcomes with more efficient project assessments. The establishment of a national environment protection agency (EPA) was discussed, with differing views on its exact role and powers.

Furthermore, participants highlighted the need for a multi-decade national settlement strategy to align population growth, infrastructure investment, land supply, and employment. Streamlining and harmonising regulations across jurisdictions, delivering faster and more predictable approval pathways, and supporting innovation in construction methods were also emphasized as crucial steps.

Superannuation funds were also a topic of discussion, with potential reforms to performance benchmark rules being considered to encourage greater investment in housing and renewable energy projects. While acknowledging the complexity of the issues, there was a shared sentiment that meaningful reform is necessary and achievable. The roundtable aimed to move beyond diagnosis to catalyse real, implemented change to address Australia’s housing challenges and boost overall economic productivity.

• Senate Select Committee Inquiry into Productivity in Australia, Housing Industry Association | HIA.
• Housing takes centre stage at economic reform roundtable, Real Estate.
• Can the economic roundtable help speed up home building?, Real Estate.
• Productivity summit ends day two with progress on rules changes to boost housing supply, Australian Broadcasting Corporation.
• Productivity Commission’s report a ‘love letter’ to housing supply, Property Council Australia.