Wicked Solutions: A long term approach to housing affordability

Australia is facing a housing crisis. Property prices have outstripped wage growth. Households of all ages are becoming more indebted and are working longer hours to pay off oversized mortgages before retirement. Today, the median house costs three times the median income, compared to half that in the 1980s. Decades of policy designed to support house price appreciation have only exacerbated the challenge.

This report seeks to untangle the multitude of factors contributing to Australia’s housing shortage and highlights high-impact strategies to boost supply and improve affordability. This report focuses on solutions geared towards addressing the housing shortage. Other aspects such as rental affordability, social housing, and homelessness will be the focus of future reports in Blueprint Institute’s Wicked Solutions series.

To truly improve access to housing for the current and future generations, we must look beyond the symptoms of the housing crisis and address its root causes. This blueprint shows how.

Our recommendations are as follows.

1. We need to facilitate housing mobility and cool down the market through sensible tax reform. Stamp duty should be replaced with a broad-based land tax, and the Capital Gains Tax discount and negative gearing concessions need to be managed out.

2. We need to urgently address the construction skills shortage by improving visa pathways to import skilled workers.

3. We need to support the development of an innovative, high-quality, and sustainable modular approach to construction, to ensure Australia’s housing stock is future-fit.

4. We need to improve planning and streamline decision-making to improve our ability to deliver high quality housing quickly. This includes strengthening design and community input early on, ensuring adequate resourcing of decision-making bodies, realigning incentives and clarifying decision making.