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Housing supply responses to changes in affordability

Report prepared for the National Housing Supply Council

Housing supply responses to changes in affordability, report cover

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This report was prepared by Urbis for the National Housing Supply Council. It is not a Treasury publication.

Where possible, the Treasury provides an RTF version of released documents. However, as these documents were prepared for the National Housing Supply Council, which is no longer operational, an RTF version is not available.

There has been relatively little comprehensive evidence collated on how the home building industry is changing the type of product it produces, and the method for producing it, in response to the decline in housing affordability. The Scoping Study into Housing Supply Responses to Change in Affordability includes findings from interviews with stakeholders with a direct interest and experience of the residential construction industry (builders and developers, industry peak bodies, not-for-profit housing organisations, and researchers) in addition to a literature review to examine industry responses.

The study notes there is more scope for innovation than is actually occurring, but that reducing lot sizes and dwelling sizes is the most common response to declining affordability. A number of opportunities to drive innovation in the industry are identified in the study

The scoping nature of the study means that the extent and distribution of innovation and some of the barriers to innovation highlighted by respondents could not be investigated in as much detail as the Council would have liked.

The Council note that a shift to downsizing lots and the type of homes being produced is a significant change in its own right. One ongoing issue that needs to be resolved is ensuring acceptance by local councils that small lots are an acceptable solution to addressing affordability, and that with the appropriate design controls they can enhance the overall image and streetscape.

The Council will continue to examine the scope for innovation and improvement in the creation of available and affordable housing supply, to meet the changing needs of Australian households.