The peak body for Australia’s most sizable Tier One and scale-growth Community Housing Providers is requesting a major, national housing renewal program as the centre of the next phase of economic recovery from the COVID-19 pandemic and satisfy Federal Net Carbon Zero goals.

Releasing its yearly Australian Affordable Housing E-Scan report today (Thursday November 3), in conjunction with CoreLogic, PowerHousing Australia states that renewal of Australia’s ageing housing stock provides advantages sure to charge up the emissions reduction and boost the economy through tough times ahead.

CEO Nicholas Proud stated that Australia’s Emissions Reduction Plan taken to COP26 in Glasgow reveals technology is needed to balance these global emissions and economic development goals, but ageing housing stock will derail targets until sustainable technology replaces coal, which is years away.

He said that Australia’s 8 million pre-energy rated homes now have surapssed their use by date, contributing up to 18 per cent of Australia’s greenhouse gas emissions and a true threat in regards to achieving Paris Agreement commitments for net-zero emissions. The National Net Zero Emission plans predict that by 2050, about 7 million homes will not be subject to enhanced energy efficiency measures in the National Construction Code with no retrofitted improvements to enhance the fabric of these houses.

The twin climate and COVID-19 crises have reinforced the inadequacy of Australia’s more than three decades old housing stock on lower income families and younger Australians, who are mostly residing in lower energy rated homes that affect financially and undermine well-being.

He said that many Australians know after months in lock down that average dwellings are chilly in winter, hot in the summertime and too costly to cool and heat. In addition, these houses are not designed for universal lifelong living, whether that’s accessibility for prams, ageing in place, or living with disabilities.

“An existing ‘old’ standard house can make way for up to three new highly energy efficient, accessible and well-located dwellings, a proportion of which can go to meeting the surging demand for more social and affordable housing,” said Mr Proud.

The report identifies a pressing need to sure up the construction industry pipeline once the current phase of government stimulus activity washes through the system. It points to a looming demand gap as the tide of expatriates returning to Australia turns while significant levels of migration are yet to recommence.

PowerHousing argues that new social and affordable housing builds can fill the gap in the construction pipeline, tackle the serious lack of affordable housing particularly in regional Australia.

“The housing boom has hit areas that have normally been spared the most extreme price rises, namely regional areas,” CoreLogic’s Tim Lawless said.

“For many Australians, including the rising number of renters, their prospects for safe, stable and quality housing are diminishing.

“The next phase of the economic recovery from COVID-19 is an opportunity to turn that around, while also making the changes required to achieve a net-zero emissions future.”

Key findings in this year’s Australian Affordable Housing E-Scan include:

Key Environmental and Social elements
• There are at least 8 million (out of 10.6m) existing homes that are often inefficient (contribute 18-20% of carbon emissions as acknowledged by COAG) impacts of this for achieving net zero, as well as increasing the supply of social and affordable housing.
• The recently released National Net Zero Emission plans forecasts that by 2050, around 7 million homes will not be subject to improved energy efficiency measures in the National Construction Code with no retrofitted improvements to improve the fabric of these homes.
• They often sit on larger 800-1000sqm lots, sit on flat land close to commuter routes and jobs, with clear benefits of new housing development, environmental, universal design, wellbeing, economic.
• Australian Social housing stock is often old, less efficient and costly to run with impacts on economic and social wellbeing for those that can afford it least.
• Market acceptance of knock down rebuild to better utilise/densify inner/mid ring developable land.
• Race to purchase flat lots ahead of new accessible design standard coming into the national construction code.
• As is the case in market housing, Australia needs to look to replace ageing social housing stock and create additional social and affordable housing outcomes.
• Renewal of outdated housing is an opportunity to improve liveability, density, energy-efficiency and accessibility, and plan activity in the construction sector to keep the economic recovery going.

Housing Affordability elements
• The COVID-19 pandemic created a “race for space” with demand shifting from high density/units to low density/detached housing and from urban to regional areas forcing up rents over 9 percent in the past year. (P.12)
• This phenomenon saw areas with a lower population density associated with rent increases, where previously such increases where most acute in higher density dwelling areas.
• Australia’s house price growth over the 12-months to Q2 2021 was 7th fastest in the world (source: Knight Frank). The global average was an 8.2% increase, the fastest rate of house prices growth since Q4 2006. (P.9)
• Over the past twenty years the median value of a capital city dwelling has risen by $524,291 or 258.1%. In the 12-months to June 2021 national dwelling values increased by 13.5% (source: CoreLogic).
• the price of housing has skyrocketed with values increasing on average by 13% with higher impacts in Sydney (15%), Canberra (18.1%), Perth (18.8%), Hobart (19.6%), and Darwin (21%). (P.29)
• As a key component of price for new dwellings, over the last 12 months lot prices in Sydney have increased by 8.5% nationally, rising by 27% in Sydney and, 80% in greater Hobart. Over the decade Sydney land prices have increased from under $300k to $546,000, Hobart from just over $100,000 to $341 which at the end of the 10 years to June 2021 is on a par with Melbourne prices (Source HIA CoreLogic).
• Nationally, the proportion of houses sold under $400k reduced from 44.7% in 2011 to 23.7% in 2021, while unit sales under $400k reduced from 48.2% to 28.7%. (P.28)
o Melbourne sold only 1.4% of houses under $400k in FY2021 compared to over 30% back in FY2011
o Canberra sold only 2.7% of houses under $400k in FY2021 compared to over 30% back in FY2011
o Sydney sold only 2.9% of houses under $400k in FY2021 compared to over 25% back in FY2011
• Residential lending peaked at a new high of $32.57 billion in May 2021, an astounding 43.8% above the previous record March 2017 levels. The primary driver of that growth has been the explosion in owner occupier lending. First home buyers have also made a big impact on the market. At one point FHB lending made up 26.8% of all new loan commitments.
• Net overseas migration has suffered a stunning turnaround in COVID-19 times falling from a peak of 241,338 in 2018-19 to a forecast low of -97,000 in 2020-21. Migration is only predicted to return to pre-COVID levels in 2024-25. (P.21)
• Foreign investment approvals in residential real estate plummeted from 40,141 approvals in 2015-16 to 7,056 approvals in the latest reporting period of 2019-20, down from $72.4 billion in approvals to $17.1 billion. (P.21)
• 143,100 detached dwelling commencements are forecast for the 2021 calendar year – a new record that is likely to remain unbroken for the decade ahead, however HIA estimates the number of detached housing commencements will fall from 135,290 in 2020/21 to 93,770 in 2023/24, a 30.7% decline.
• Outside the capital cities in the normally more affordable regions there has been a 9.3% growth in rents this also impacts harder considering youth unemployment in the regions is traditionally higher. (P.34)
• In the ten years from 2007-08 to 2017-18 the national proportion of low-income households in rental stress has increased from 35% to 43.1% (source: ABS)
• The proportion of mortgage holders in mortgage stress has increased from 32.9% in February 2020 to 41.7% in July 2021. This compares to 2013/14 when mortgage stress was below 20% (source: UNSW City Futures and Digital Finance Analytics)
• 20% of key workers in Sydney and 17% of key workers in Melbourne experience housing stress with key workers being pushed to the city fringes to obtain affordable housing. (source: AHURI)


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