MEDIA RELEASE

6 March 2008

DEMOGRAPHIA
www.demographia.com

HOUSING AFFORDABILITY: AUSTRALIA WINS – NEW ZEALAND LOSES?

At the Urban Development Institute of Australia (UDIA) 2008 National Congress held in Melbourne, Australia this week - the Premier of Victoria Hon John Brumby, within his wide-ranging speech (Premiers Media Release: NEW ZONE TO BOOST HOUSING IN GROWTH AREAS announced the fast track release of land, capable of incorporating an additional 90,000 house lots (to accommodate around a further 243,000 people) .

Premier Brumby said –

“For the past decade this Government has invested in the services and building projects that matter to families – and this is attracting more people to Melbourne and Victoria faster than predicted”

“Victoria’s population boom is placing pressure on land supply and we are taking action to meet demand for zoned land. The reforms I am announcing today will cut the time it takes to prepare land for development by more than 12 months.”

“This will cut thousands of dollars per block in development costs and significantly increase the supply of new housing.”

“This is the first instalment of measures to tackle housing affordability and reforms to the planning process by the middle of the year.”

It is likely other States within Australia will follow the State of Victoria’s lead by fast tracking land releases and tackling the planning and infrastructure impediments, in their quest to restore housing affordability.

The new Australian Government and its leader Hon Kevin Rudd are committed to working with the States and Local Governments to restore housing affordability in Australia and announced an initial suite of measures early in the week, to address rental housing by encouraging the construction of up to 100,000 units (to accommodate approximately 270,000 people) and improve planning processes.

The updated figures from the National Centre for Social and Economic Modelling (NATSEM), now suggests that 1.1 million Australian households are suffering housing stress – as reported by The Australian.

Mr Rudd had said that his Government had upped the quota for skilled migrants by 6,000 two months ago and is committed to supporting industry training.

In an inclusive way, he has organised a 2020 Summit next month with a “focus on ideas” to deal with housing affordability and other important issues.

The Housing Industry Association of Australia (HIA) has suggested to the Australian Government that there is a need to bring in 15,000 additional construction workers to meet this housing need (articles here , here , here , here ).

The Rudd Government is currently considering the proposal.

Following the last Federal Election in Australia - the Sydney Morning Herald commissioned Fitch Ratings to complete a study of voting trends and reported 8 December 2007( Fear of losing homes drove Labor win - National - smh.com.au ) that those facing housing stress with excessive mortgages, moved solidly to Labour.

In contrast – the New Zealand Government has done little of significance over recent years in dealing with the issue of housing affordability.

Finally – on 4 December 2007 - the New Zealand Government Housing Minister Hon Maryan Street announced the introduction of an “inclusionary zoning” Affordable Housing Enabling Territorial Authorities Bill (forcing developers to supply a percentage of lower priced houses in developments), which has met with widespread criticism (Demographia response here).

Australia is currently putting in place around 140,000 residential units a year ( latest Australian Bureau of Statistics Building Approvals Report for January 2008 Month – issued 06/03/2008) and needs to increase this substantially to deal with household formations and the backlog due to the inflated pricing.

In response to these massive and wide-ranging Australian initiatives – Mr Pieter Burghout, CEO of the New Zealand Master Builders Federation has expressed deep concerns about the likely exodus of local builders, as they are drawn across the Tasman again, to assist Australians with increased housing production ( NZ Herald , TVNZ Breakfast , Radio New Zealand , New Zealand Visa Bureau , ABC Online

“Governments at all levels in New Zealand must work together with real urgency to open up land supply on the urban fringes and allow affordable housing to be built” said Hugh Pavletich, co author of the Annual Demographia International Housing Affordability Survey –adding “It now well past time for real action”.

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Hugh Pavletich
Co author – Annual Demographia International Housing Affordability Survey
www.demographia.com

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Further Information
Demographia
Scoop NZ articles - Hugh Pavletich
NZCPR guest article “Restoring the housing opportunity” - Hugh Pavletich
"Our young New Zealanders deserve affordable housing" - Hugh Pavletich

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