The Federal Government's new Homebuilder Scheme is a missed opportunity to tackle Australia's housing crisis and create more jobs for tradies.
The scheme offers $25,000 means-tested grants for buyers of newly built homes and renovations above $150,000.
One-off grants risk pushing up prices and are inefficient. Many of the $25,000 grants will be used by people who were planning to buy or renovate anyway.
Building new social housing is more beneficial to construction jobs because it creates a pipeline of work that wasn't there before. This new pipeline of work backfills the drop in demand for private dwellings and provides urgently needed housing for vulnerable people.
Modelling by the Community Housing Industry Association and National Shelter, as part of the Social Housing Acceleration and Renovation Proposal, shows that investing in 30,000 new social housing homes over four years will create between 15,500 and 18,000 jobs per year. Not-for-profit community housing organisations can leverage these assets, using low-cost finance from the National Housing Finance and Investment Corporation, to build 5000 more homes to further stretch government dollars.
Such housing programs have proven effective before with 20,000 homes built, supporting 14,000 jobs, after the 2008 global financial crisis.
Disturbingly high social housing waiting lists mean demand is there and community housing providers have developers with shovel ready projects, so the stimulus is almost immediate.
We have an undisputed housing crisis in Australia with high purchase prices and rents locking out many people. There is a shortage of more than 400,000 affordable homes nationally for low income households.
Only 5.5 per cent of rental properties in the Hunter are affordable for households on income support. Compass Housing's latest Affordable Housing Income Gap report shows that many renters generally were facing rental housing stress pre COVID-19.
There are 150,000 Australian households on social housing waiting lists - 3250 of those in the Hunter. A 2019 Compass Housing report showed these figures would be higher if everyone eligible applied for social housing.
People in housing stress cut back on other spending - suppressing consumption which is also bad for the economy. Funding new affordable housing will do more to reduce housing stress for both renters and buyers than these grants.
The government's establishment of housing as a subcommittee of the National Cabinet is a welcome move. The subcommittee's first task should be a national housing plan with a combination of initiatives that, together, have the biggest benefit for the most people.
