Global banking leaders say housing supply, not tax reform, is key to solving Australia’s housing crisis
By
Herron Todd White Chief Executive Officer Peter Maloney
Senior banking and financial services executives from around the world have overwhelmingly backed increasing housing supply over further taxation reform as the primary solution to Australia’s housing affordability crisis, according to new research by Herron Todd White.
The independent property valuation, data insights and advisory firm polled senior leaders attending the World Credit Union Conference in Sydney this week — one of the world’s largest gatherings of banking and financial services executives, bringing together representatives from credit unions, mutual banks and financial institutions across more than 60 countries.
The results were pointed. A striking 78 per cent of respondents said Australia would achieve better housing affordability outcomes by increasing housing supply rather than reforming tax settings further, while 75 per cent believed population growth had already outpaced the nation’s ability to deliver new housing.
Pessimism about the road ahead was also evident. Some 41 per cent of respondents said they did not believe Australia’s housing affordability would improve over the next five years. Meanwhile, 63 per cent expected the Federal Government’s latest tax reforms to reduce business confidence — a finding with direct implications for private sector investment in housing delivery.
Herron Todd White Chief Executive Officer Peter Maloney said the results reinforced a growing consensus among industry leaders that taxation policy alone could not resolve the nation’s housing challenges.
“The message from banking leaders is clear: housing affordability is fundamentally a supply issue,” Mr Maloney said. “While taxation policy can influence investment decisions, Australia simply needs to build more homes if it wants to improve affordability over the long term.”
The concern around business confidence was a recurring theme in the findings. Private investment has long underpinned Australia’s housing delivery pipeline, and Mr Maloney warned that any erosion of that confidence carried material consequences for supply.
“Private investment has historically played a significant role in delivering Australia’s housing stock. If policy settings reduce business confidence or discourage investment, there is a risk that already significant housing supply constraints become even more pronounced,” he said.
The findings arrive as Australia continues to grapple with chronic housing shortages, elevated construction costs, extended delivery timeframes and sustained population growth — a combination that has placed mounting pressure on affordability across both metropolitan and regional markets.
Mr Maloney said structural reform across planning, infrastructure and construction productivity was now essential to closing the supply gap.
“Australia’s long-term housing affordability will be determined by our ability to increase supply. Faster planning approvals, faster delivery of new housing, greater investment in enabling infrastructure, improved construction productivity and policies that encourage new housing development will all be critical,” he said.
He also pointed to a notable paradox within Australia’s current construction pipeline — one that underscores the complexity of the supply problem.
“Although Australia is not commencing enough new dwellings to achieve the Federal Government’s housing target, the number of dwellings under construction is now at a record high,” Mr Maloney said. “This highlights that completing new housing in a timely manner is a major challenge for the industry and one that directly affects housing affordability.”
The distinction between dwellings commenced and dwellings completed is increasingly significant for policymakers. A record construction pipeline offers little relief to affordability if projects remain unfinished for extended periods due to labour shortages, cost pressures or supply chain constraints.
Mr Maloney said managing population growth in line with the nation’s housing delivery capacity was equally critical to any long-term solution.
“Without addressing both sides of the equation, affordability pressures are likely to persist across metropolitan and regional markets,” he said.
The World Credit Union Conference research adds weight to calls from industry bodies, developers and housing advocates for governments at all levels to accelerate planning reform, invest in enabling infrastructure and create policy settings that actively encourage new housing supply rather than constrain it.