Big four bank boss feels the need for speed to fix housing crisis

Save articles for later

Add articles to your saved list and come back to them any time.

Long delays in approving new housing applications are the biggest cause of Australia’s affordability crisis, the head of one of Australia’s big four banks says, warning that the combination of sluggish construction starts and rising migration is a recipe for more homelessness.

NAB chief executive Ross McEwan has urged state governments to intervene to radically speed up planning approvals for new housing, arguing that the time between submitting an application and the start of construction should be three to six months – not the three to six years it takes in some cases.

Housing starts in Australia are at their lowest in a decade, according to the Housing Industry Association.Credit: Jason South

Those delays limit supply and push up property prices in Australia, McEwan said.

“If I’m sitting around with a property [application] for three to six years trying to get through a planning process, that ends up being put into the cost of the house or the unit,” he said at a forum on Australia’s affordable housing shortage in Melbourne on Wednesday.

“If we get that down to three to six months and we can get that shovel in the ground, I think that would be the one thing that … would probably make the biggest difference.”

Housing starts in Australia slumped 23 per cent last financial year to 57,830 – the lowest since 2013 – according to Housing Industry Association data. Meanwhile, Australia’s population grew by 2.17 per cent to 563,200 people in the year to March, Australian Bureau of Statistics data reveals.

NAB Group chief executive Ross McEwan says planning delays are exacerbating Australia’s housing affordability crisis. Credit: Simon Schluter

“We’ve brought in over 500,000 people in the last 12 months. That hasn’t made up for what left through COVID, but it’s still a big number coming in, and we’ve got housing starts and housing finishes at the lowest ebb we’ve seen in decades,” McEwan said.

“So those two coming together don’t work, and it’s meant that a lot of the population are really struggling with [housing].”

Australia’s estimated homeless population hit more than 120,000 at the most recent census.

NAB set a target last year to lend $6 billion for affordable housing by 2029, but argues in its October 20 submission to the national housing and homelessness plan that Australia must find more innovative financing techniques so that non-profit housing groups can access more capital.

Bevan Warner, the chief executive of Launch Housing which provides housing support to people experiencing homelessness, said the cost of housing would always be a barrier to reducing homelessness without significant government subsidies.

“To deliver below-market rent – whether it’s key workers at 80 per cent of the market or social rent at 25 per cent of welfare payments – there needs to be a subsidy otherwise the financing won’t stack and the housing won’t be built, even if we have speedier planning approvals,” Warner said.

The issue of planning delays has sparked a blame game between the Victorian government and local councils.

Dwelling approvals in Victoria fell by 26 per cent in the year to September, and the state government pointed the finger at councils last month over what it said was a backlog of 1400 planning permit applications that had been sitting with councils for more than six months.

The government promised in its September housing statement to clear the backlog and to strip councils of planning authority in cases where delays are the worst.

Councils have defended their record, with analysis by the Municipal Association of Victoria suggesting almost 120,000 dwellings have been approved and are ready to be built, but are being held up by developers and builders cancelling and shelving projects due to soaring building costs, rising interest rates and uncertainty linked to labour shortages.

Also speaking at the forum was Salvation Army Housing chief executive Chris Karagiannis, who said the charity was increasingly looking to philanthropists in the private sector to fill the shortfall in available government funding for its housing projects.

The charity opened 21 new housing units for women aged over 55 at risk of homelessness in Hobart in July.

Salvation Army Housing chief executive Chris Karagiannis said the charity was looking for ways to fill the shortfall in available government funding.Credit: Simon Schluter

Government funding covered just 45 per cent of the project cost, with the balance sourced through private donations, Karagiannis said.

“It’s not government making it work for us because we have to go out, develop the relationships, find the funding, articulate the project, and in Moonah we only kept it 100 per cent social housing because we had philanthropic support.”

Get the day’s breaking news, entertainment ideas and a long read to enjoy. Sign up to receive our Evening Edition newsletter.

Most Viewed in National

From our partners

Source: Read Full Article