Australia’s housing market is in turmoil as rising prices compound the challenges that face a construction industry plagued by declining productivity amid a national crisis.

A recent report by the Business Council of Australia titled “It’s time to say yes to housing” revealed a 12 per cent downturn in construction productivity over the last decade, contrasting with an 11 per cent growth across other market sector industries.

This troubling trend exacerbates the already rapid deterioration of housing affordability across the country.

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The BCA cites the 2024 Demographia International Housing Affordability report, revealing several Australian cities rank among the world’s costliest, as Sydney, Melbourne, Adelaide, and Brisbane are now global frontrunners in housing expenses.

Sydney occupies the second spot worldwide, followed by Melbourne in seventh place, Adelaide ninth and Brisbane 15th.

BCA Report highlights the federal and state policy changes since 2023.

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The Business Council of Australia’s report highlighted the need for a cohesive national framework to address housing challenges throughout the country – with buy in from both federal and state governments to formulate and implement reforms that incentivise efficient land use and support housing affordability initiatives.

The report says increased federal investment in public infrastructure is set to play a role in supporting state efforts to enhance development in regional areas across the country and housing accessibility.

New South Wales – Stagnant growth amid high demand

Onerous planning restrictions across New South Wales are contributing to the state having one of the lowest housing approval rates in the nation.

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New South Wales stands at a critical juncture as it grapples with one of the lowest housing approval rates in the nation.

The BCA report highlighted that the bottleneck is largely attributed to onerous planning restrictions that have stifled growth and curtailed housing availability.

The NSW Productivity Commission has proposed a series of reforms aimed at expediting approval processes and encouraging up-zoning in urban areas.

By streamlining these processes, New South Wales hopes to significantly increase the density of housing developments, alleviating pressure on the housing market and addressing skyrocketing rent prices.

Principal at Laing & Simmons Parramatta, Carlingford and Oatlands Daniel Mourad is calling for less red tape and faster approvals of development applications in New South Wales.

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Principal at Laing & Simmons Parramatta, Carlingford and Oatlands Daniel Mourad said he agrees with the findings and that he thinks the solution to the New South Wales development crisis was relatively simple.

“Development applications need to be approved quicker and less red tape and less contribution fees,” Mr Mourad said.

“If homes weren’t as expensive to build I think we’d be seeing more of them – on top of that you’ve just got the extra fees and delay in approvals and subdivision, it becomes unaffordable.

“We aren’t short of apartments here in Sydney particularly in Parramatta but with homes, duplexes and townhouses, there isn’t a lot out there.”

The report says these reforms are essential for meeting the state’s long-term housing demands.

According to PropTrack’s September Home Price Index, Sydney’s median dwelling price, based on sales of houses, units and townhouses, is now $1.096m – just shy of 6 per cent higher than it was heading into the spring of 2023.

Victoria – Bridging approval and infrastructure gaps

Victoria might be a leader in producing the most housing approvals on a per capita basis, but new taxes and delayed project completions are stifling the state’s development.

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Victoria has positioned itself as a leader in housing approvals on a per capita basis, showcasing a proactive stance towards addressing housing shortages, the BCA report revealed.

However, the report says Victoria continues to face inefficiencies within its planning systems, often resulting in delayed project completions.

While addressing efforts have been made to align housing developments with transport infrastructure, promoting accessibility and sustainability – there remains a critical need for reforms that speed up approval processes and bridge the gap between planning and actionable development.

Prominent buyers advocate Cate Bakos is calling for red tape to be removed from a council level in Victoria.

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Prominent buyers advocate Cate Bakos agreed with the findings and said red tape needed to be removed at a council level in Victoria.

“Land banking is really not attractive for builders and developers right now – we have a lot of taxes and that adds to the holding costs,” Ms Bakos said.

“Some of our projects aren’t feasible to land bank and our cost of construction is higher and getting tradies is tougher and getting a tradie is much harder.

“We have a lot going on with the big build, civil infrastructure, rail projects and other projects – its taken a lot of our tradies out of the private market.”

By refining these aspects, the report says Victoria can further enhance its housing supply chain and support its population growth.

According to PropTrack’s September Home Price Index, Melbourne’s median house value fell for the fifth month sitting at $914,000.

Queensland – Overcoming industrial challenges

Prolonged construction times and record migration are driving slow construction in Queensland according to the BCA report.

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Queensland’s housing market was found to be facing challenges unique to its socio-economic landscape, particularly involving prolonged construction timelines and decreased productivity due to union disputes.

These industrial challenges have ripple effects on housing affordability and availability across the state.

To address these issues, Queensland authorities have been urged to strengthen infrastructure development support and streamline planning processes – enabling more diversified and abundant housing options.

Place Chief Auctioneer Peter Burgin says Brisbane needs to build more high rises to achieve housing targets. Picture: Liam Kidston

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Place Estate Agents chief auctioneer Peter Burgin said in regards to the BCA report findings that all levels of the construction process state government, council and town planners need to work together to achieve better outcomes for Queensland.

“We’re trying to move in the right direction, the path could be a bit smoother for everyone,” Mr Burgin said.

“We need to have high rises in the Brisbane CBD – let’s face it more people want to live and invest close to the city.

“Queensland won’t meet the demand of people migrating into the state if we don’t build more high rises.”

The report said addressing the root causes of industrial disputes and fostering a more cooperative relationship between labour and management will be pivotal in revitalising the state’s construction sector – benefiting home buyers and investors.

According to PropTrack’s September Home Price Index, Brisbane’s median house price sits at $855,000.

South Australia: Setting the Standard for efficiency

South Australia has been named by the BCA as the Australian state with one of the most efficient planning processes.

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South Australia has emerged as a national example for development with its streamlined and efficient planning processes.

By reducing bureaucratic red tape and enhancing transparency, the state has managed to accelerate housing delivery and serve as a potential benchmark for other states.

The report stated that the implementation of a single, cohesive planning system with minimal ‘stop the clock’ provisions highlighted the benefits of cutting regulatory excesses.

Ray White Sailsbury’s James Aubert said Adelaide’s development scene was progressing well.

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Ray White Sailsbury’s James Aubert said he agreed with the reports findings, especially in Adelaide’s northern suburbs.

“We’ve had a massive increase of developments in the northern suburbs and I’ve heard things have gone well down south,” Mr Aubert said

“Councils have definitely made it easier to build and time frames have come back now to a similar time frame where they were before Covid.

“This spring selling season, while it hasn’t been as busy there are more listings than a few months ago and buyers and clearance rates are great – buyer demand is definitely there and growing.”

The BCA says that this approach not only accelerated housing projects but also enhanced investor confidence, promoting sustainable growth and stability within the housing market.

According to PropTrack’s September Home Price Index, Adelaide’s median house price sits at $778,000 – highlighting a massive growth of 15.1 per cent over the past year.

Western Australia: Innovative legislative reforms

The BCA report suggests Western Australia has made significant steps in its housing strategy.

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Western Australia’s approach to addressing planning system bottlenecked through legislative innovation marked a significant development in its housing strategy, according to the BCA report.

It said by enacting streamlined processes for major projects and offering duty concessions for new builds, the state aimed to invigorate housing supply and attract investments.

These legislative changes are poised to enhance housing availability while fostering economic growth through increased construction activity.

EQ Realty Managing Director Erit David believes the government needs to release more land so more homes can be built in Western Australia.

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EQ Realty director Erit David said more needs to be done to address Western Australia’s housing crisis, particularly in Perth.

“There is a large pocket of crown land in Dianella – it’s 9ha land just nine kilometres from the Perth CBD,” Ms David said.

“The land is currently protected for Black Cockatoos and don’t get me wrong I am all for conservation but that is such a large parcel of land sitting in the middle of a growing suburb that can’t be developed.”

While the BCA report said Western Australia has taken strides to adapt to changing market dynamics and ensure its housing policies remain robust and responsive to future demands, it needs to ensure it prioritises legislative adaptability as it continues to grow.

According to PropTrack’s September Home Price Index, Perth’s median house price sits at $754,000 – highlighting a huge growth of 22.3 per cent over the past year.

Tasmania: Pathways to independent Approvals

Victoria Dock Waterfront in the city of Hobart. Picture: istock

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Tasmania is pioneering an independent decision-making pathway aimed at addressing bureaucratic bias and expediting complex project approvals, according to the BCA report.

The strategy implemented is hoped to strike a balance between growth ambitions and maintaining rigorous assessments, facilitating a favourable environment for development in Tasmania.

By shifting towards more autonomous and transparent approval processes, the state hopes to attract greater investment while ensuring that development aligns with local community needs and environmental considerations.

First National Kingston/Hobart property agent Kim Steel shares her concerns for Tasmanian’s housing needs not being met.

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First National Kingston/Hobart property agent Kim Steel said in response to the report the government could look at ancillary dwellings on properties to help the housing crisis.

“At the moment the government isn’t allowing them – they’ve got a stringent set of rules if they reduced thew bureaucracy it would make things a lot easier and educing the cost of development applications – potentially providing better tax cuts.

“Seeing people look for housing is awful, I know good reliable tenants and they can’t find a home.

According to PropTrack’s September Home Price Index, Hobart’s median house price sits at $683,000.

Australian Capital Territory: Modernising planning frameworks

Canberra’s new “Territory Plan” is hoped to curb the housing crisis in the capital state of the country

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The Australian Capital Territory has introduced “The Territory Plan”, which represents a substantial evolution in planning methodology, shifting focus towards outcome-based strategies, according to the BCA report.

This framework is hoped encourage flexible residential developments and anticipate meeting housing demands through innovative zoning changes, such as facilitating dual-occupancy developments in key regions.

Belle Property Canberra’s Bree Currall wonders whether “The Territory Plan” was bought in too late amid the nation’s housing crisis.

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Belle Property Canberra’s Bree Currall said she thought “The Territory Plan” was great, but thought it was left a bit late.

“It seems like they’re doing more now than what they have done in the past – we can give them some credit with all the new suburbs that are coming up,” Ms Curall said.

“The building and construction industry has had it real tough across the country so it’ll be nice to see some relief

“We’ve got more properties on the market in the ACT than we’ve seen in a long time, auction clearance rates aren’t at their best but things are clearing shortly after – so in general the market here is going okay.”

The report said by championing a contemporary approach to land use, the ACT hoped to address housing shortages while maintaining urban liveability and ecological integrity.

According to PropTrack’s September Home Price Index, the ACT’s median house price sits at $839,000.

Northern Territory: Urgency for regulatory transformation

The Northern Territory is facing “urgent challenges” with one of the nations lowest housing approval rates according to the BCA report.

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The Northern Territory faced urgent challenges with one of the nation’s lowest housing approval rates per capita, demanding comprehensive regulatory reform, according to the BCA report.

The report said the territory’s system struggled to match the pace of escalating housing demand, resulting in a pressing need for systemic enhancements to boost housing development.

LJ Hooker Darwin sales consultant Riley Loy is hopeful the new grants will boost the Northern Territory’s property market.

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However, LJ Hooker Darwin sales consultant Riley Loy said recent government grants and announcements have seen a pick up in the market.

“The government recently announced a $10,000 and $30,000 grant for new builds and a $50,000 grant for Territorians, it’s picked up with – we’re in a turning market,” Mr Loy said.

“With interest rates dropping in the new year I think we’ll see results coming through over the next year – we’re just hoping it’s not an artificial market.

“The government announced the $10,000 and $50,000 new build for Territorians (the Homegrown Territory and Fresh Start New Home programs) it’s picked up quite a bit, we’re in a turning market.

“We’ll see the results coming through over the next year, we’re trying to hope it’s not an artificial market we want to keep.

Mr Loy said for the last 12 months the Darwin market has been really slow.

“We were getting times where one person through the first open and now we’re seeing roughly around 10 people rock up to the opens,” he said.

According to PropTrack’s September Home Price Index, the Northern Territory’s median house price sits at $511,000. 

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