The Reserve Bank governor has blamed the federal government’s housing policy for skyrocketing prices, saying Labor’s commitment to build over a million new homes was looking doubtful.
At Senate estimates on Tuesday Michele Bullock said there was a “structural undersupply of houses” and that this had been a problem for many years.
WATCH THE VIDEO ABOVE: Deputy Prime Minister Richard Marles defends action on housing supply
Know the news with the 7NEWS app: Download today Arrow
This is despite the governments commitment through the National Housing Accord to build 1.2 million new homes over a five-year period from mid‑2024.
“If you just look at the numbers so far, according to targets, it doesn’t look like we’re going to get there quite frankly,” Bullock said.
According to a forecast from the National Housing Supply and Affordability Council, only 938,000 new houses will be built over the five-year period ending 30 June 2029, a shortfall of 262,000.
It said labour shortages and high material costs were the main factors impacting the supply of new houses.
Speaking to Sunrise on Thursday morning Deputy Prime Minister Richard Marles said the government was doing “everything we can to put a downward pressure on inflation”.
“We have brought inflation down significantly. I mean, when we came to government we were seeing inflation going north, interest rates going north, we’ve now seen three interest rate cuts,” he said.
“We brought inflation down to less than half of what we inherited.”
Reserve Bank governor Michele Bullock. Credit: AAP
Marles acknowledged to Nat Barr that Australia had a housing problem.
He said the government was in the process of building new homes and that the previous Coalition government “did little in respect to housing”.
“We’re managing all the challenges within the economy, but we are doing it in a prudent way and whichever way you look at it the circumstances today, in terms of interest rates coming down, in terms of inflation being less, is much better than what we inherited,” Marles said.
The government’s housing policy also includes a five per cent home deposit scheme which supports first home buyers with a lower deposit.
Deputy Prime Minister Richard Marles acknowledged Australia had a housing problem. Credit: AAP
Bullock said this was “inherently more risky”.
“The more you borrow, the higher the loan evaluation ratio,” she said.
Last month the Grattan Institute proposed a radical town house and apartment plan for major cities that it said would see homes $100,000 cheaper in 10 years.
In its ‘more homes, better cities’ report the Grattan think tank called for a relaxation on land-use rules, including a review of heritage protections to open up inner-city housing options, and for “greater scrutiny” on regulations that limit development.
It said all residential land in capital cities should be available for dwellings up to three storeys, and up to six levels within walking distance of major transit hubs and key commercial centres.
The proposed reforms would lead to the construction of an extra 67,000 homes every year, the institute said.
Labor’s rebate failure as soaring energy costs drive families to the brink
2 min read
High school kids’ honest opinion about world-first social media ban
4 min read
