The property sector pays $130 billion in taxes each year, and close to 40% of the cost of a new home is made up of taxes and charges - the Property Council of Australia has warned, as building approvals fall for the third consecutive month.
Australia is running out of time to get housing delivery back on track, with this week marking a critical inflection point for the National Housing Accord and the nation’s ability to meet its targets.
As the Accord hits its two-year mark, the next 12 months represent the government’s last clear window of opportunity to make the policy changes needed to unlock new housing supply by its own deadline.
Property Council group executive policy and advocacy Matthew Kandelaars said the focus must now shift to delivery.
“We need a relentless focus on supply, especially the type that delivers new homes at scale," Kandelaars said.
"Anything less than the true reform needed to unlock supply will lock in years of under delivery when Australians can least afford it.
“There are changes governments can make right now.
"Fix regulatory settings like RG-97 to support investment and capital flows and fix how dwellings are defined so that every home is properly counted under the Accord to help projects get moving.”
New data released today by the Australian Bureau of Statistics shows building approvals for the month of May fell 1.1% to 17,019.
While approvals for private sector houses rose 2.8% to 10,537, this was offset by a 10.4% drop in higher-density dwellings to 6,034.
Kandelaars said the latest approvals data highlights the pressure already facing the development pipeline, with the real test now shifting to project delivery.
“These changes come as the development pipeline is already under strain, and they risk weakening the investment needed to deliver new homes,” Kandelaars said.
“According to the Government’s own numbers, these changes are expected to reduce housing supply by around 35,000 homes.”
Kandelaars said the combined impact of rising construction costs, labour shortages, the cost of capital and recent tax changes was tightening investment conditions across the market.
“This is a supply problem," Kandelaars said.
"When you make it harder to invest, fewer projects proceed and that means fewer homes.”
Kandelaars said this week’s milestone for the National Housing Accord should serve as a clear call to action for governments.
“Governments cannot wait," Kandelaars said.
"They need to act now to remove barriers, support investment and get projects moving.
“The alternative is falling short of housing targets and allowing affordability pressures to deepen.”
