Urbis has welcomed the Federal Budget's $2 billion housing infrastructure investment but says the real test lies in feasibility and delivery - warning that without fixing a fragmented approvals system and aligning costs, financing and infrastructure, the pipeline will stay stuck.
The $2 billion investment into housing infrastructure aims to unlock 65,000 homes over 10 years through connecting water and sewage for housing developments.
It is a step towards tackling the nation’s housing supply crisis.
However, Urbis partner and housing sector lead, Mark Dawson, says this cash injection does not address what chronically compromises housing - feasibility and the intersecting challenges of delivery.
"This is welcome movement for a system that’s stuck and it’s good to see funding targeted at unlocking feasible, more affordable homes," said Dawson.
"It is a small cog in a big machine and will need to cut through the delays and stop-start decisions of a fragmented approvals system.
“Housing feasibility is like a Rubik’s cube, not a single switch.
"The Budget is turning more than one face, and that matters.
"But if approvals, infrastructure, build cost and financing don’t move together, the bottleneck just shifts and the pipeline stays stuck.”
Urbis chief economist Richard Gibbs said that housing feasibility and affordability need to be the main focus to ensure the supply chain is effective.
“It is not a systemic change," said Gibbs.
"It may increase commencements – but it’s only the tip of the iceberg in relation to enabling infrastructure.
"It doesn’t talk to schools, hospitals, or other community infrastructure required by families, especially if you’re moving them into a new residential greenfield development.
“Affordability AND feasibility need to be balanced when it comes to supply delivery. The biggest issue right now is making the feasibility stack up.”
Gibbs said part of the challenge is the various local, regional, and state jurisdictions that intersect in the delivery of housing.
“Streamlining the three tiers of government jurisdiction for delivery is needed, because delivery occurs, and can be absolutely impeded, at the local government area, as well as at the state.”
Urbis also welcomes the changes to Capital Gains Tax (CGT) and negative gearing, which aims to assist first homebuyers in securing a foothold in the property market by encouraging investors to reconsider their investments.
Urbis partner and board member Hamish McKnight said that the tax policy shift hasn't been seen in Australia for a long time.
“This represents a genuine shift in tax policy, something that has been notably absent in Australia for some time," said McKnight.
"Importantly, it has been designed in a way that reduces material impact existing investors.
"In that respect, it is a pragmatic, middle‑ground response and avoids what could have been a far more adverse outcome for the market.”
