Australia needs 1 million new homes to beat rental stress
Australia will need to build 1 million new social and Affordable rental homes for low and middle- income households over 20 years to meet current demand and keep pace with population growth, new analysis UNSW City Futures Research Centre released today shows.
Estimating need and costs of social and affordable housing delivery shows the scale of rental stress across the country means Australia will need 728,600 social housing properties and 295,000 Affordable rental homes by 2036.
Lead researcher, Laurence Troy said 22.5% of all housing growth will need to go towards social housing while a further 10% of growth needs to be below market Affordable rental homes.
One third of all homes – 316 766 – are needed in NSW, however regional Tasmania and South Australia have the highest rate of growth needed in social housing for households in the most chronic rental stress
“Our analysis shows that the sheer number of households in rental stress across the country means that if we’re going to meet the need, at least 12% of all our housing by 2036 will need to be social and affordable housing – which is a very reasonable ambition in global terms,” Mr Troy said.
“To cover the backlog of unmet need and future need in Australia two in ten new homes will need to be for social housing over the next 20 years, and a further one in ten for below market Affordable rental housing.”
The UNSW CFRC research is the first to model current housing shortages and the projected need for Affordable housing across Australia; and look at how the homes can be delivered, using different funding models.
It builds on analysis of social housing need released by AHURI in November.
The study shows it will cost Governments $8.6 billion a year to deliver the new social and Affordable rental homes in tandem with the not for profit sector.
“To put that into perspective Australia spends $11.8 billion a year on negative gearing and capital gains tax subsidies,” Mr Troy said.
“Based on our modelling, the best and cheapest way for governments to deliver on our unmet housing need is to fund it through a combination of upfront grants and low interest government supported financing.”
“Delivering below market rental housing through the not-for-profit sector, as opposed to the private equity model, will save $3 billion a year by removing developer mark-ups and shareholder returns.”
The needs analysis and financial modelling was commissioned by the community housing sector.
CHIA NSW Chair John McKenna said it was valuable data that would help the sector and governments plan housing where it is most needed.
“The study gives us a very clear picture of exactly what housing is needed in local communities not just in NSW and across Australia, which is invaluable information for developing desperately needed housing strategies at both a state and a federal level,” Mr McKenna said.
“The research indicates that delivering below market rental housing through the not for profit sector is the most cost effective option.
“It also shows is the cost of delivering homes will vary according to land prices – in Sydney for example, land makes up 72% of the cost of development.
“The number of homes that we need is clearly enormous but it can be delivered if all levels of government work together and recognise that subsidised housing is not possible without government subsidy in some form.
“State and local governments need to step up to provide the housing their communities need – either through capital grants in cash or government land, and planning mechanism that recognise housing as critical local infrastructure that will help their local communities thrive.”
- Australia will need 1, 023 888 social and affordable homes by 2036
- 36,400 social housing properties a year
- 14,800 Affordable rental homes a year
- The scale of rental stress for people on low and middle incomes means that just 46% of Australian households in need of social housing are receiving it.
- The Government will save $3.2 billion a year delivering the affordable housing through the not for profit sector ($1.1 billion) than the for profit sector ($4.5 billion) – because it removes investor return and equity
- The cheapest way to deliver the housing we need is through a combination of capital grants and financing through the National Housing Finance Investment Corporation (NHFIC), which reduces the money CHPs need to borrow, and provides access to cheaper financing.
- Social housing $5.3 billion a year
- Affordable housing $3.3 billion a year
- The cost of delivering homes needed will vary according to local land prices – the biggest development cost.
NB national and NSW housing needs tables below
Media contact: Hannah Craft 0423 377 965
|State||Social housing shortfall 2019||Affordable housing shortfall 2019||Protected extra social housing needed by 2036||Projected affordable housing needed by 2036||Total need by 2036|
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