The “one-size-fits-all” housing industry stimulus is helpful, but more needs to be done to have major impact on the economic recovery, new research shows.
Governments need to think about changing patterns of consumer demand and invest in areas where demand pressures exist according to the Australian Housing and Urban Research Institute.
Non-residential construction, followed by residential construction and then infrastructure spending has the highest multiplier effect to those industry sectors hardest hit by the pandemic.
The $680 million HomeBuilder program created some demand, but there are further opportunities, with 2020 National Housing Finance and Investment Corporation figures showing that every dollar invested in the housing industry can deliver a $2.90 boost to the economy by supporting direct and indirect jobs and spending.
Many organisations examined showed support large-scale funding and development of social housing, which could have a multi-billion-dollar impact on the economy.
A number of tax reforms could further aid market recovery, including stamp duty reform and encouraging institutional investment in housing.
State and territory home buyer incentives
|State||Federal HomeBuilder||Home building boost||First home buyer grant||Total||Stamp duty concession|
^ Source: Responding to the pandemic, can building homes rebuild Australia?
Curtin University professor Steven Rowley said that in terms of support packages and investments, the areas of rental housing and affordable housing offer opportunities for both government and private sectors.
“Never has there been a better time to create the conditions for institutional investment in rental housing where returns are potentially more stable than other property sectors,” Rowley said.
“Over $5 billion was pumped into social housing in response to the GFC. A similar level of spending now would deliver short-term benefits for the housing industry and longer-term benefits for those most in need of affordable housing.
“Further stimulus measures need to be targeted at markets most in need of support and government needs to work with industry to identify the most effective interventions.”
The project—which involved interviews with 25 industry stakeholders in NSW, WA and SA—reveals that while there is support for HomeBuilder, there are concerns around the settings, scale and terms of the stimulus package, which the paper concludes is “too small to have a big impact on the economic recovery”.
The study, “Responding to the pandemic, can building homes rebuild Australia?” was undertaken by researchers from Curtin University, the University of Sydney and the University of Adelaide.