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Developers warn of looming apartment supply crisis costing thousands of jobs

Business

The Property Council has warned that an apartment supply crunch was looming among the major capital cities with a potential loss of more than 6200 jobs in Brisbane and more than $500 million in economic value.

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Among the factors leading to the potential loss of 30,000 jobs nationally by 2024 was the lack of immigration caused by the closure of Australia’s borders, which are now not expected to re-open until mid next year.

Brisbane apartment approvals have also fallen from 18,000 in 2015, when there was a glut of supply in the inner city, to 4000 last year.

But there were other issues including imposts on overseas investors which were introduced because of concerns they were lifting housing prices and forcing out local homebuyers.

The council’s incoming Queensland executive director  Jen Williams said housing shortages were already at a flash point in some parts of the state and ensuring that housing supply kept up with population growth was going to be critical in the lead up to the 2032 Olympics.

She said that while yesterday’s Queensland Budget introduced a welcome increase in investment in social housing, it was being hampered by the many policy and regulatory changes currently underway within Government that would directly impact the cost of new housing.

She welcomed the State Government’s investment in social housing which has included a $1.9 billion investment over four years and a new $1 billion Housing Investment Fund to boost housing supply and increase housing and homelessness support across Queensland.

The Government has said it would fast-track projects and initiatives that would increase the supply of social housing, seek proposals to develop under-utilised state land, and deliver mixed-use developments.

It was increasing the supply of social and affordable housing by almost 10,000 over the life of its strategy, including 7400 new builds over the next four years under the Queensland Housing Investment Growth Initiative.

“Aside from a direct investment in housing stock, the Government must take action to fast-track and unlock new private housing, particularly in greenfield areas where demand is currently at its highest levels ever. This will require an investment in the infrastructure required to both unlock new developments and facilitate mobility across the state,” Williams said.

 “Similarly, we also need a commitment to facilitate new and innovative housing models like ‘Build-to-Rent’ that can quickly increase the supply of rental housing and improve the quality of life for the many thousands of Queenslanders living in rental accommodation.

 The Property Council now wants all state governments to reduce international investor surcharges, stimulate apartment construction and improve planning to avoid a looming apartment supply crunch across Australia’s largest housing markets.

Analysis from Urbis, commissioned by the Property Council, found that by 2024 apartment supply “will be at crisis levels, across Australia’s three largest markets with construction only 20 per cent of 2018 levels”.

“The overlay of governments’ actions over time has led to a reduction in investment that predates the closure of international borders,” the council said. 

Its national chief executive Ken Morrison said that the reduction in building activity would see the loss of 30,000 construction jobs across Melbourne, Sydney, Brisbane and Perth in the next few years. 

“Apartment construction is a critical component of Australia’s future housing supply and a vital job-creator for our economy,” Morrison said.

“While approval numbers are increasing, they mask a decline in construction activity that will lead us to a severe structural undersupply by 2024.”

“Without changes in policy, our apartment building industry will shed 30,000 direct jobs and produce $5.9bn less in housing assets over the next four years.”

The council claims stimulus measures like the Federal Government’s HomeBuilder, were welcome in delivering for the detached housing sector but had done little for apartment construction.

 Surcharges on international investment remain a major handbrake for many potential projects, Morrison said.

“Over recent years we’ve seen a proliferation of new taxes and regulations across Australia that have been a handbrake on investment and directly impacted our levels of apartment supply,” he said.

 

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