New housing needed to support population: UDIA

New housing needed to support population: UDIA
New housing needed to support population: UDIA

Australia does not build enough new housing to support the growing population according to the Urban Development Institute of Australia with inadequate investment in urban infrastructure, high taxes and charges and excessive red tape on new developments driving the shortage in housing supply.

Whilst the overall rate of home ownership has only declined by a relatively modest 7%, from 71.3% of households in 1982 to 64.3% of households in 2011, according to UDIA, it masks the disproportionate decline experienced by younger generations, where rates of home ownership have collapsed. 

"The 25-34 and 35-34 year old demographics have seen the largest declines in the rate of home ownership, falling by 39% and 20% respectively. 

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New housing needed to support population: UDIA

In the submission to the inquiry into Home Ownership, UDIA says there is an urgent need for governments to take necessary action in order to resolve these issues and restore housing affordability.

"UDIA is strongly of the view that Australia has not built enough new dwellings to support population growth for many years, and that the country now suffers from a significant underlying shortage of homes, pushing up both rents and house prices. 

"Population growth must be planned for, with the necessary land, new housing and infrastructure to support population growth. Doing so will ensure that population growth is managed sustainably and for the benefit of the entire community. 

"Timely and sufficient provision of new urban infrastructure, such as transport, utilities, and community facilities is a particularly important factor for ensuring an adequate supply of new land. Infrastructure investment can act as a critical catalyst for development and new supply, by improving access and opening up new areas for urban growth."

UDIA made several recommendations to the House of Representatives Standing Committee on Economics such as provide additional funding for investment in new urban infrastructure, in order to unlock land for development. 

"The Commonwealth should work with state governments to prepare comprehensive strategic plans for future urban infrastructure, land-use planning, and land supply, to align with forecast population growth. 

"Facilitate non-traditional methods of funding infrastructure, to increase the level of funding available for infrastructure investment at both a federal and state level."

UDIA believes that costs associated with the Environment Protection and Biodiversity Conservation Act (EPBC Act) are a concern for the development industry.

"The Commonwealth should work with State Governments to undertake planning system reform to reduce delays and increase certainty in planning, zoning, assessment and approval systems, and increase the flexibility with which they operate. 

"UDIA supports the creation of a single, streamlined environmental approvals system to reduce the red tape associated with duplicated systems, without harming environmental outcomes. The Government should continue with its plan to streamline the environmental approval process to create a ‘one stop shop’. 

"The Commonwealth should stop attempts to restrict development around airports and airport corridors beyond the current and existing standards. 

"Stamp duty on property purchases should be phased out, and replaced with more efficient taxes, such as a broadening of the GST. 

"Governments should avoid revenue raising through the application of up front developer charges, and should seek to fund infrastructure through recurring charges directly related to specific infrastructure investment, over extended time frames. 

"The Commonwealth should cease plans to shift the cost of providing the National Broadband Network to new home buyers through up front connection, network and backhaul charges. 

"Governments should commit to broadening the base and reducing the rate of land tax regimes over a number of years, as an efficient way to raise revenue and reduce reliance on up front developer charges. 

"Governments should ensure land taxes apply per land holding, not on an aggregate basis, to in order promote large scale land development. 

"Land taxes should be levied on only the unimproved value of land, to avoid distorting disincentives to invest in improvements. 

"Exclude state and local government taxes and charges from GST calculations on land development, to reduce double taxation and improve tax system integrity. 

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