Government failing to meet 1.2 million homes target due to infrastructure issues in outer suburbs
“Without funding to enable infrastructure in growth areas, the planned 300,000 new homes in these communities will not be built by the 2029 deadline.”
The federal government has offered $3 billion to states and territories to find ways to speed up construction, including on basic infrastructure. However, this policy has come under criticism because governments are not provided with cash flows until housing targets are exceeded.
Independent MPs led by Allegra Harcama this week called on the government to bring forward payments under the existing “new home bonus” scheme, which rewards states for making reforms such as zoning changes or fast-track building approvals.
The alliance says governments are too focused on increasing housing supply in inner-city suburbs, where infrastructure is already under pressure, while many Australians want to live outside the suburbs.
At least a quarter of the 1.2 million homes are expected to be built in the 29 outer suburban councils.
But Terresa Lynes, president of the alliance and mayor of the town of Gosnells, said no houses would be built in the outer suburbs without changes to the federal government’s programmes.
“We see all the properties that are not connected to sewers and [with] insufficient water. “It is worrying that in 2025 governments expect people to accept this as their share,” he said.
“The government is failing these Australians before their homes are even built, not to mention underfunding the infrastructure communities need to thrive after they move.”
AMP chief economist Shane Oliver said there was no quick fix to improving the affordability of Australian homes.
Building more homes, tax reform, encouraging people to live in regional centers and reducing immigration should be examined by country governments, he said.
Since the mid-2000s, and especially since the end of the pandemic, governments have failed to match the level of immigration with the property market’s ability to provide housing, Oliver said.
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“Our rough estimate is that immigration should be reduced from 316,000 for the year to around 200,000 per year by the March quarter,” he said.
“But we need to act in a balanced way as we try to solve the problem. Immigration, in particular, has greatly benefited Australia by increasing labor supply and addressing labor shortages, supporting state and federal budgets, slowing population aging, increasing innovation and increasing cultural diversity and vibrancy.”
Oliver said the government’s target of 1.2 million homes was a step towards increasing supply, but much more needed to be done to increase the number of homes under construction.
“Achieving the target will require relaxing land use rules, less red tape and green belting, a move to faster construction routes including modular and prefabricated homes, promoting build-to-rent affordable housing, training and importing many more tradespeople and a greater refocus on units,” he said.
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