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Bold Budget Must Deliver Housing Supply to Succeed says UDIA

The Urban Development Institute of Australia (UDIA) National congratulates the Federal Government on the 2023-2024 Budget’s continued focus on housing supply as an essential strategy to support vital population growth and economic repair.

“It’s hugely positive to see the May Budget take further steps to bolster housing attainability, ownership, affordable and social housing, as well as removing some of the inhibitors to Build to Rent,” said Max Shifman, UDIA National President.

Key measures welcomed by UDIA in the lead up to and announced in tonight’s May Budget have targeted access to housing and boosting supply. These include a further increase of $2bn in affordable and social housing debt through the National Housing Finance and Investment Corporation (NHFIC), Housing Affordability Future Fund to provide at least 1,200 affordable and social houses in each state and territory, halving Managed Investment Trust Withholding Tax to encourage institutional funding of Build to Rent at-scale housing, boosting Commonwealth Rental Assistance and broadening access to the three major Housing Guarantee Schemes.

These initiatives are a great start and reflect many of UDIA’s key advocacy areas, but there is substantially more work to be done to boost housing supply and keep downward pressure on prices given high net migration projections and the low forecasts on new dwelling supply in the coming period.

Critically, the May Budget has forecast Net Migration at 400,000 in 2022–23 (against the previous projection of 235,000 for 2022-2023) and 315,000 in 2023–24. The increases in net migration are vital to catch up on the pre-pandemic shortfalls and repair our economic capability, but this highlights the need for Australia to redouble its efforts to boost housing supply across the spectrum.

The success of Government’s economic strategy swings on the ability of Australia to take pressure off housing rental and ownership which are vital factors impacting cost of living, transport, city building, health, infrastructure, access to jobs, immigration and productivity.

There are major challenges ahead to overcome the housing supply imbalance and to ensure the success of the May Budget.  UDIA National analysis shows that with greenfield and apartment costs rising and approvals dropping, the powerful impact of scarce housing supply, rising cost of living, interest rates and tighter financial lending, means any initiatives to improve the economy and housing access need to be coordinated with expanded supply measures across the spectrum.

Immediate actions needed include boosting enabling infrastructure, streamlining planning, and expanding development ready land supply.

UDIA National is also encouraged to see a heightened focus on better, more effective infrastructure investment to ensure Government gets the biggest “bang for buck”, and it is critical that this investment is coordinated with expanded the availability of development ready land for greater housing supply.”

UDIA is keen to see the Housing Australia Future Fund (HAFF) pass through parliament, together with a broader housing plan that harnesses private housing providers, CHP’s and investors through incentives that build on their capability and capital, to stretch government funds further.

“UDIA National looks forward to working with Government to continue delivering initiatives that boost land, and accelerate delivery of all types of housing, that help underwrite the success of the Government’s economic strategy,” said Mr Shifman.

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