Labor’s bold new ‘announceable’ wasn’t worth the paper it was written on.
So Labor has been feeling the pressure to come up with a plan to “fix the housing crisis.”
That’s the problem with having control of the Federal parliament and all the states. You’ve got no one to blame.
For decades we’ve kicked it between the state and federal level, with each blaming the other. Now it’s Labor either way you look so… expect more blame to be headed the local government way.
And last week Labor came up with a plan. But in pure Canberra style it was nothing buy hype, scam and pipe dreams.
The plan – which made for a wonderful headline – was to build 1.2m homes over the next five years.
What’s not to like about that?
Well for starters, the government isn’t going to be doing any of the building. That’s still left to the states to plan and the private developers to deliver.
So what we have is a plan to ‘facilitate’ all that construction?
Is there money on the table? Sort of. If the states get it done, then they get money on the other side of it.
(Tomorrow, tomorrow.)
But there’s still no real way forward here.
1.2m over five years is 240,000 homes a year.
We’ve only produced anywhere near that amount when we were slapping up highrises in Melbourne, and even then we only produced 230,000.
And it’s actually worse than that, because a lot of completions are on knockdowns – so you can probably shave that number back at least 15%.
At any rate, what Labor’s plan calls for is a record level of construction next year… and the year after that, and the year after that, for five years.
That’s nothing but a pipe dream.
At a time when builders are collapsing all over the place, financing is getting harder to come by, and buyers are getting scared off by rate hikes.
Seriously, how is that happening?
Tim Lawless at Corelogic reckons it’s got Buckley’s chance:
“We’ve never built that many homes in a five-year period in the past and arguably over the next few years at least, it will be a real challenge”.
“Housing approvals are already below average and not showing any signs of improving. Construction costs remained high and there’s still an ongoing shortage of skilled workers to build these homes”.
“So there are many foundational factors that need to be fixed before we can start ramping up housing construction, and that will take some time”.
“Even at the height of the construction boom during the five years to December 2019, only 1.086 million dwellings were delivered”.
There is no way.
And what it means is that we can bank on the housing crisis going from bad to worse over the next five years.
There will remain a shortage of rentals and a shortage of places to buy.
And prices will just keep going up and up and up.
JG.
Rita Gorlato says
Hi JG,
Please concentrate on a solution, we know the problem. Surely with your vast experience and the fabulous property community you reach, someone, somewhere out there can make some sense.
What about all the social housing currently boarded up, on large blocks of land.
The infrastructure is in place. Cosmetic reno the existing house, subdivide the land and construct kit homes. Am I missing something?