Productivity Commission push for bold housing reform welcomed by HIA
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Photo by Erik Mclean
The Housing Industry Association (HIA) has welcomed the Productivity Commission’s Interim Report into Housing Supply Regulation, saying it confirms what builders, developers and home buyers have experienced for years — that planning systems, approval delays and infrastructure constraints are among the most significant barriers to increasing housing supply across Australia.
HIA Chief Executive Industry & Policy Simon Croft said the report represents a pivotal moment for housing policy in Australia, challenging planning assumptions that have constrained supply for decades.
“The Commission has recognised what builders, developers and home buyers have been experiencing for years. Australia cannot solve its housing affordability challenges without reforming the systems that control how, where and when new housing can be delivered,” Mr Croft said.
Among the report’s key recommendations are measures to allow three-storey townhouses on most residential land, the removal or reduction of minimum lot sizes, greater housing diversity and faster approval pathways — reforms the HIA says have real potential to improve affordability if governments are prepared to act.
The interim report also targets infrastructure delivery and developer contribution frameworks as significant supply constraints, a finding the HIA says reflects the on-the-ground reality facing the building industry.
“Too often, housing projects are delayed by poorly coordinated infrastructure planning, uncertain charging arrangements and approval processes that add unnecessary cost and complexity. Ultimately, these costs are passed on to home buyers,” Mr Croft said.
The HIA has long argued that planning systems should facilitate housing delivery rather than frustrate it, and Mr Croft said the Commission’s findings reinforced the need for governments to act decisively on approvals reform.
“The report also highlights the impact of excessive assessment requirements, conflicting agency advice, subjective planning controls and lengthy approval timeframes. Every delay adds cost, creates uncertainty and reduces the number of homes that can be delivered,” he said.
Despite acknowledging that some of the Commission’s proposed reforms will face resistance, the HIA urged governments not to shy away from the difficult conversations required to deliver meaningful change.
“Some of the Commission’s proposed reforms will undoubtedly be controversial and are likely to face resistance from parts of government and the planning system. However, difficult conversations should not be avoided simply because they challenge long-standing planning practices,” Mr Croft said.
The HIA’s position is that incremental reform has repeatedly failed to address the structural barriers driving Australia’s housing affordability crisis. With housing targets already set by state and federal governments, the association is calling on political leaders to move beyond review and into implementation.
“The industry does not need another review confirming that housing has become slower, harder and more expensive to deliver. What is needed now is the political will to implement reform,” Mr Croft said.
The Productivity Commission’s interim report arrives at a time of acute pressure on housing affordability across Australia. CoreLogic data has consistently shown property values outpacing wages growth in major capital cities, while the national rental vacancy rate remains at historically low levels, placing further strain on households unable to enter the ownership market.
Federal and state governments have committed to a collective target of 1.2 million new homes over five years under the National Housing Accord, a target many industry bodies have warned is at serious risk without significant planning reform.
The HIA said it intends to engage actively with the Commission’s final report process and with governments at all levels to ensure the recommendations translate into practical, on-the-ground change.
“HIA looks forward to working with the Productivity Commission and governments around the country to ensure the final report delivers practical reforms that support housing supply, affordability and greater housing choice for Australians,” Mr Croft said.
The Productivity Commission’s final report is expected to provide a more detailed blueprint for reform, with housing supply regulation remaining one of the most politically contested areas of Australian economic policy.