Regional home-building in crisis

Building in regional Australia is in crisis, with excessive taxes and levies imposed by all levels of government contributing more than 40% of the cost of a new home and land packages, the head of the Housing Industry Association said on Tuesday.

The HIA joined various residential building industry players in Canberra on Tuesday to tell Federal Minister for Housing Brendan O'Connor how bad it really was in the home building sector.

HIA managing director Shane Goodwin said analysis by the industry association had shown that in Wagga, in New South Wales, taxes and red tape were contributing about 42% to the cost of a new home and land package.

He said many regional areas were suffering from similar costs, putting residents off buying land and getting their own family home built.

Mr Goodwin said despite a 10-year average of about 165,000 housing starts each year, there were only about 130,000 housing starts this year, contributing to a widely understood shortfall in housing of more than 30,000 homes across the nation.

While state taxes, such as stamp duty, and federal red tape were contributing to the expense of home building, the Productivity Commission last week reported local government red tape and slowing land releases were also contributing.

Mr Goodwin said the crisis in home building starts was affecting the $70 billion industry, but it was also clear it was affecting housing affordability.

"While the government is helping to make rents more affordable for some people, not enough is being done to ensure more homes are being built," he said. "And with predictions that Australia's population will reach about 36 million in the next four decades, something needs to be done now."

Mr Goodwin said the most recent release of the nation's gross domestic product data, reaching 4.8%, was being dragged down by a decline in the building industry of 5.5%.

But Mr O'Connor was not ignorant of the problems in housing and housing affordability, saying the government had contributed $100 million to the Building Better Regional Cities program.

The program encourages infrastructure investment, but Hervey Bay in Queensland, and Ballina, Lismore and Tweed Heads in New South Wales were the only regional centres in the APN footprint eligible for the program.

"The Australian Government understands that housing affordability is an issue being felt right across the country, and regional Australia is no exception," he said. "That is why since coming to office we have invested a record $20 billion in housing and homelessness programs."

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