REIQ says housing measures welcome but Budget lacks scale to tackle supply crisis
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Photo by Kindel Media
The Real Estate Institute of Queensland (REIQ) has welcomed several housing measures in the Federal Budget but warned that they fall short of the scale needed to address the state’s chronic housing supply shortage.
REIQ chief executive Antonia Mercorella said the Budget acknowledged housing constraints but did not go far enough in supporting the policy changes and funding required to meet demand.
“The overwhelming constraint on housing affordability remains a lack of supply,” Ms Mercorella said.
“Resolving housing supply constraint issues and promoting other housing supply alternatives, such as prefabricated homes, are the cornerstones for more affordable housing.”
Queensland’s building approvals remain well below the National Housing Accord target, with just 35,800 dwellings approved in the 12 months to January 2025, compared to the target of 49,000–50,000 per year.
Ms Mercorella said the $54 million allocated to support the manufacturing of prefabricated and modular homes was a positive step, but would only be effective if the industry achieved economies of scale.
“Prefabricated housing can be built much faster than a home constructed using traditional methods and is especially well-suited to regional and remote Queensland,” she said.
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“However, for it to stack up financially, the prefabricated housing industry needs to realise economies of scale through greater production volumes.”
She recommended that the government support the use of prefabricated housing in social housing projects through financial incentives and co-investment arrangements.
The REIQ also supported the Budget’s $10,000 cash incentive for apprentices in residential construction, and called for improved skilled migration pathways to ease labour shortages.
On the expansion of the Help to Buy scheme, Ms Mercorella said the move to raise income and price caps was welcome, but its limited annual capacity of 10,000 places—just 2,000 in Queensland—would restrict its reach.
“The program still has a limited reach,” she said.
“We recommend the Government consider expanding the number of the program beneficiaries if there is sufficient demand from applicants.”
Ms Mercorella also called for bipartisan cooperation on housing policy, citing delays to Help to Buy legislation which meant the scheme would not be operational until the second half of 2025.
On the government’s two-year ban on foreign investment in existing homes, she said the measure was unlikely to ease demand or significantly impact prices.
“This is because foreign investors are a small part of the housing market and there is already significant deterrents and restrictions in place for foreign buyers,” she said.
The REIQ noted that only 0.32 per cent of total dwelling transactions in Queensland in 2022–23 involved established homes purchased by foreign buyers.
While welcoming funds from the Housing Australia Future Fund and for crisis accommodation, Ms Mercorella said deeper structural reform would be needed.
“The REIQ recognises that many policy levers relating to housing affordability are at the state and local government levels, particularly stamp duty, infrastructure charges, and zoning policies,” she said.
She called on the Federal Government to consider financial relations reform and work with other levels of government to reduce excessive regulatory and tax burdens.
Research for the Housing Industry Association found that 41 per cent of the cost of a typical house and land package in 2023–24—around $348,000 on average—was made up of taxes, regulatory costs and infrastructure charges.