The arrival of COVID-19 and the subsequent disappearance of the usual level of immigration has laid bare Australia’s housing affordability challenges. Low interest rates are inextricably interconnected with this issue where the RBA remain firm on their decision to hold rates steady at 0.1% until 2024. This historically low interest rate environment has fuelled strong property price appreciation at a time when housing affordability has become a challenge for many. We discuss the implications below.

The arrival of COVID-19 and the subsequent disappearance of the usual level of immigration has laid bare Australia’s housing affordability challenges. Low interest rates are inextricably interconnected with this issue where the RBA remain firm on their decision to hold rates steady at 0.1% until 2024. This historically low interest rate environment has fuelled strong property price appreciation at a time when housing affordability has become a challenge for many. We discuss the implications below.

Infrastructure Australia estimate 730,000 new social houses are needed across Australia over the next 15 years. It’s a bigger number than most people are aware of and speaks to the size of the challenge. As a result, there have been growing calls from the property development industry for the NSW Government to reform the state’s housing and urban design regulations to help address the current shortage in housing developments.

In the recent Urban Development Institute of Australia’s online forum on Solving the Supply Crisis in NSW, a number of property developers claim NSW’s planning system is the worst in Australia. Jim Betts, the departing secretary for the Department of Planning was open to change and highlighted the importance of moving forward quickly given the tendency of Governments to undertake less policy reform as elections get closer. Most participants agreed there’s still a gap between the Government’s talk and action on this issue which needs to be addressed as Australia’s property market continues to heat up.

Landen’s Director Jim Dionysatos believes housing affordability challenges will take many years to address: ‘In NSW, property developers have long highlighted the lack of policy action on housing affordability. Whilst the rhetoric from Jim Betts is positive, it’s only NSW Government policy changes which will generate improved supply of affordable housing. We hope that happens soon but we’re realistic about the possibility it may remain unaddressed in the short term.’