Jason Janssen: Little indication that policymakers know how to tackle the housing crisis

Finally, the penny has dropped with an across the board acknowledgement of the crisis in housing as a major issue at the coming State election.

Unfortunately, there is little indication that policy makers understand the real nature of the problem and how to fix it.

There is no shortage of people who want homes including first-home buyers who look unlikely to be able to move into their dream home for many years.

The housing crisis is a supply problem.

So, when the Government announces that it is going to fund 1800 new social and affordable homes, the question is: “Who is going to build them?”

An overstretched home building industry simply lacks the capacity to meet the demand which is now being fuelled by policies that are politically popular but ignore the real problem.

The result is escalating prices that ration the short supply of homes that can be built and squeeze more buyers — particularly young families — out of the market.

An inevitable result is much longer building times and increased pressure on the rental market leading to fewer rentals and skyrocketing rents.

And then, in the conga line of misfortune, homelessness increases with more people living in cars.

As an example, it is now costing $3 per brick to build a house and, if something’s not done, the price per brick will be back up to the record high of $3.50 before too long.

More and affordable social housing is a good idea too.

But what has been happening in the past five years and how realistic is it really?

Even an elementary understanding of the situation must question the wisdom of the promise to reduce stamp duty on some new homes.

It sounds good and is politically attractive but what is the benefit if all it achieves is to increase prices.

It is time that our policymakers realised that politics spoils things — proposals that sound good and attract votes aren’t always what’s needed.

However, there are things that can be done.

They include training more tradespeople to work in the home building industry and that means making it attractive for young people to enter the industry and stay there.

It means training them quicker with skills they will use and not equipping them for jobs they will never undertake.

It means understanding the impact on housing resources of the high wage “fly-in fly-out” resources industry and how to capitalise on labour that becomes available as that industry pulls back.

It means reviewing the Home Building Contracts Act (1991) which is not fit for purpose and which is hampering, not helping, the nascent recovery.

The outdated notion that inevitable and fully justified price increases should not be passed on hurts, not helps, the client by stretching building times out past three and four years.

It means continuing the excellent assistance package which has provided loans to qualifying builders and has helped to complete so many homes.

It means reviewing the present housing indemnity policies which are unwieldy and unsuited to present conditions.

The limit on insurance assistance is far too low (in NSW it is almost $200,000 higher than in Western Australia) and the problems are clearly shown in the Nicheliving debacle where home owners are finding they need more than $350,000 to finish their homes.

And finally, it means much closer cooperation between government and the industry.

The foolishness of unrealistic targets that raise expectations about home ownership that can never met result in a feel good factor that doesn’t really last beyond the time it takes to read the press release.

Jason Janssen is chairman of the Home Builders Action Group