Australian Prime Minister Anthony Albanese is offering extra cash to state and territory governments that boost housing supply as a surge in immigration and dwindling construction worsen an accommodation squeeze.
(Bloomberg) — Australian Prime Minister Anthony Albanese is offering extra cash to state and territory governments that boost housing supply as a surge in immigration and dwindling construction worsen an accommodation squeeze.
Albanese announced A$3 billion ($1.9 billion) in new funding for governments that exceed their home-building targets at a press conference on Wednesday. It was among a suite of measures to tackle housing shortages that emerged from his meeting with the eight state and territory leaders, known as the National Cabinet.
The group agreed to increase Australia’s housing supply target to 1.2 million new homes over five years, beginning July 2024. It’s this target that the states and territories need to beat to access the extra funds. Albanese also announced a plan to improve the rights for the country’s rising cohort of renters.
“We know that there is no simple one-day, one-week, one-month solution to dealing with housing issues,” Albanese told reporters in Brisbane.
The center-left Labor government has been under intensifying pressure to tackle a housing crisis that has seen property prices resume rising despite 12 interest-rate increases. Rents are also soaring as more people turn to rental accommodation, leaving landlords in a strong bargaining position with tenants.
Meantime, the nation’s population has been growing at about 2% since immigration resumed following the end of the pandemic.
Rents across Australia rose by 6.7% on average in the three months through June, according to the Australian Bureau of Statistics, the biggest quarterly increase since 2009. The surging cost of rentals is one of the key contributors to the economy’s elevated inflation in recent times.
In contrast, new dwelling approvals fell 18% year-on-year in June, according to the ABS.
Albanese’s signature housing policy, the Housing Australia Future Fund, is still stuck in the Senate, upper house of parliament, after the Greens party refused to pass it without further action to cap rents.
–With assistance from Swati Pandey.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.