Property Market Overview: July 2025 By Scott Keck

By Scott Keck | Chairman, Charter Keck Cramer

Scott Keck is Chairman of Charter Keck Cramer. Scott has over 50 years’ property valuation and corporate real estate experience across the national markets. As an experienced independent practitioner Scott provides specialist strategic and mediation consulting services, including an emphasis on land acquisition for major infrastructure projects. A highly regarded and regular contributor to the national media and business magazines, Scott has published over 500 articles on topics related to the property market. Scott is a member of Charter Keck Cramer’s Board of Directors.

Australia has become a very property centric society, both for individuals and also significantly in the corporate sector for Managed Funds and REITS, due to a very favourable and inducing tax and superannuation environment. This has sustained a long period of almost uninterrupted growth during which, as a community, we have become faithfully confident in compounding performance and reliable risk adjusted returns.  We are, however now probably entering into a phase of possible Capital Gains Tax reform and a changing property investment and development market which will be affected by both positive and negative influences, summarised as follows:

Positives

1. Baby boomer capital

2. Acute supply shortage - strong demand at right price point

3. Government subsidy for social and affordable housing

4. Interest rates easing

5. Costs slowing

6. Techno advance / modern methods, prefab

7. Gradually supportive Government policy

8. Economic step back from stagflation

Negatives

1. Covid legacies

2. High construction costs

3. Low affordability

4. Contractor insolvency

5. Regulatory and zoning constraints

6. Infrastructure deficiencies and levies

7. Environmental and climate concerns

8. Foreign investor taxes

9. Financial complexities including statutory charges and capex  

10. Global uncertainties

Whilst I don’t underestimate the risk, I do view residential development mainly as a process of calculated SUPPLY whereas commercial development including retail, industrial and office is more complex, carries greater risk and rather than providing supply, provides negotiated, invariably underwritten SOLUTIONS … both of course require patience and persistence but the commercial sector generally requires higher levels of development management, negotiation skills and of course commencing capital.  Usually participants are one or the other but not both. If you want to be involved I think you need to strategically commit to one sector.

Notwithstanding current headwinds which require planning, taxation and labour reforms and which also include sector insolvencies and slow design and construction innovation, there are immediate and emerging opportunities.  Amongst current projects and proposals in our office or of which we are aware I mention:

1. Downsizer luxury apartments

2. Social and affordable housing

3. Medium rise residential and mixed use projects

4. Land lease projects

5. Residential to rent / BTR with a twist (student and retirement accommodation)

6. Value add v. passive

7. Regional opportunities

8. Adopting existing building built form provides planning and timing advantages

9. Master plan centres

10. PPPs … working with Government

11. Office refurbishments

12. Large mixed use inner urban infill sites

Having summarised examples of current potential viability, the question may well be how does one find such opportunities ... the answer is in part that as always there is the entrepreneurial awareness of opportunity and intuition that successful developers and investors demonstrate … those who live and breathe the property markets … but even they increasingly rely upon the support, guidance and analysis of research agencies. They may intuitively sense an opportunity, but invariably through the process of research discard many prospects before making a commitment.  And to be emphasised, don’t underestimate the relatively recent strong resource of AI … more often than not is likely to point you in roughly the right direction.

Another source of engagement which is quite common is to be willing to consider Joint Venture opportunities …there are many property professionals, particularly for example architects, planners, project and development managers, even valuers who may have insight and viable proposals but lack capital ... if you maintain an active and wide property network you will experience that awareness invariably leads to opportunity. The majority of projects that pass through our office do involve joint ventures one way or another … usually passive equity capital joining with development and project management expertise. 

There are mixed views about the challenge of residential under-supply, yet the need for long-term population growth through migration to boost productivity. Inevitably, Australia’s economic future security depends on a substantial increase in economic growth which means a much larger population which will be sourced through migration mainly from the Asian region, China, India, Bangladesh and Pakistan. As our community embraces this prospect we will also experience cultural change as our population transitions to a higher Asian proportion of our population. Simultaneously there will inevitably be an increase in the percentage of households that rent rather than owner occupy.

As community growth and cultural and economic impetus feeds mainly into the economies of Victoria and New South Wales, there will be increasing opportunity for residential and infrastructure development and investment across all sectors. Currently there may understandably be some negativity about the property sector in Victoria but the medium to longer prospects offer assessable opportunity as statewide community expansion drives continued demand in all built form sectors.

This article has been republished with permission from the author, Scott Keck, Chairman Charter Keck Cramer.

Cities are heating up the planet – how they can do more to fight climate change

Photo by simmo333

By Anna Hurlimann, Associate Professor in Urban Planning, The University of Melbourne and Sareh Moosavi, Lecturer in Environmental Planning and Design, The University of Melbourne

Cities have a central role to play tackling climate change. They contribute 67–72% of the greenhouse gas emissions which are heating up the planet.

At the same time, cities are increasingly at risk from global warming. Flood, fire and drought are affecting everything from the cost of insuring homes and businesses, through to impacts on health and safety.

This is critical given 90% of Australians live in urban areas. Globally, cities are home to more than four billion people.

Our new study identifies 16 priority actions to address climate change in the construction and management of cities.

Building smarter

Climate change must be a key consideration when designing, building and managing our cities. The emissions generated need to be minimised and eventually eliminated.

We must build in locations, and in ways, that reduce climate risks. But policies governing how our cities are designed and constructed don’t achieve this.

A recent study of three local government areas identified only limited action on adaptation and mitigation. Other research has found few urban development policies include carbon reduction goals that meet international targets.

The National Housing Accord will see more than one million houses built by 2029. These new homes must address the climate challenge.

16 areas for priority action

The priority areas in our new study were informed by interviews with more than 150 stakeholders working in urban planning, architecture, landscape architecture, urban design, sustainability, construction and property.

The actions they identified cover the entire life cycle of the built environment.

One of the first barriers to overcome is the perceived lack of agency among industry professionals to initiate or demand climate action. They perceive others, such as property owners or clients, to have more influence.

Climate change risks should be identified in the early stages of planning new developments, backed up by effective tools to make risk identification and action easier:

There were areas that were identified as being flood prone or risk prone. But there was no strategy to deal with what happens to those areas – An urban planner

Once specific projects are being considered it is important to prioritise early stage climate assessments, supported by policies which mandate climate action:

Everyone has good intentions but without big formal legislation around it, everyone’s just sort of making their way in the dark – A construction industry professional

In the design stage, steps to improve the climate knowledge and skills of the workforce beyond disciplinary boundaries is critical. The selection of low-impact products and materials will also help ensure design is more climate responsive.

Photo by carlazwies

The highest number of hurdles to climate action were found to occur during the costing and approvals stage. Participants spoke of a highly competitive building industry. If climate change initiatives introduced at an earlier stage aren’t required by law, they are likely to be cut.

unless there’s something in it for them in terms of return on investment, it’s going to be hard to get them to do it, unless we make them – An urban planner

During the construction phase, product and material substitutions that have detrimental environmental impact should be eliminated. Innovation should be encouraged:

If you want to push the envelope a little bit in terms of using recycled materials […] that’s a bit of a barrier. To push innovation is difficult – A landscape architect

Post-construction

Once construction is complete and buildings and public spaces are being used, it is important to invest in a thorough evaluation process. Building users should be involved to ensure buildings are maintained for optimal climate outcomes:

[We] tried to achieve the six star rating […] the client has to maintain it [the building] for a year, and that’s when things start to fall off – An architect

When it comes to area upgrades or building renewals, advocating for reuse and materials circularity is important. But the custom of demolishing and building anew, is hard to shift:

The reuse of the existing building obviously generates significantly less waste and involves less material. So, design decisions and strategic decisions around using existing buildings is really important – An urban designer

Working together

This is a time of significant change in our urban areas.

We need to make sure climate action is embedded in every stage of decision making. This may mean more efficient use, and reuse, of the existing built stock. This will require an overhaul of policies regarding building retrofits, and a change in mindsets.

The priority actions to address climate change in cities can be implemented across a range of levels for:

• individual professionals – pursue development of their climate change skills, including opportunities provided by professional associations

• professional practices – review internal processes to ensure climate action is mainstreamed across projects, and in company decision making

• universities teaching built environment professional degrees – embed climate change knowledge, skills, and competencies across the curriculum

• governments at all levels – review policy settings to mandate mitigation and adaption.

By addressing these actions, we can collectively work towards achieving our emission reduction targets and making sure our cities minimise climate change risks.

This article is republished from The Conversation under Creative Commons license. Read it here.

Australia’s infrastructure crossroads: Can we build better with less?

By Adrian Piani, GHD’s Market Leader for the Australian Federal Government

Adrian Piani is a highly respected engineer and infrastructure leader with over 25 years of experience across the public and private sectors. 

Currently serving as GHD’s Market Leader for the Australian Federal Government, Adrian brings extensive knowledge in strategic infrastructure planning, project delivery, and sustainability. 

We already know what works. We need the resolve to embrace innovation, take smart risks and deliver better outcomes for Australians.

After a decade of record capital infrastructure spending, state and territory governments are grappling with tighter fiscal conditions and higher interest rates. The economic reality is clear: the need for infrastructure will continue to escalate, despite limited funding. The challenge will be in how we continue to invest in and deliver the infrastructure that underpins community wellbeing, with decreased expenditure and increased efficiency. 

The pipeline of planned infrastructure remains extensive, while governments are finding themselves unable to deliver these projects as envisioned due to budget constraints and a culture of risk aversion. However, these challenges present a unique opportunity for us to rethink how we plan, design, and execute infrastructure, while keeping community benefits at the forefront of decision making. 

Fundamentally, infrastructure underpins community welfare and wellbeing, and the backlog of built environment needs will still be there - irrespective of whether funding is available to complete them or not. Infrastructure like roads, hospitals, power grids and telecommunications form the backbone of our modern lives. When you strip away the ability to turn on a light, drive to work, or connect to a mobile network, you quickly understand how infrastructure shapes our happiness, productivity, and wellbeing.

That is why continued infrastructure investment must remain a national priority, even in times of fiscal restraint. Not only does infrastructure enable daily function, but improvements—like hospital upgrades or better road networks—also deliver tangible enhancements to quality of life. Though often taken for granted, the link between infrastructure and community benefit is foundational to our base needs. 

Treasurer Jim Chalmers has flagged productivity as a core focus for the next phase of Australia’s economic agenda. Nowhere is this more relevant than in the infrastructure and construction sectors, which have faced declining productivity for years. 

To maximise public value, we must pursue two parallel strategies. First, prioritise infrastructure investment that focuses on better design to deliver the greatest community benefit with low economic cost. Second, deliver projects more efficiently, by rethinking delivery models, embracing innovation and focusing on effective project management.

Most infrastructure projects today cost more and take longer than expected. Modern infrastructure over the last century has demonstrated that we have sound technical design, but we continue to fall short in effective delivery, a project phase often marked by chaos and ballooning costs. Repeating the same approach and expecting different outcomes is no longer tenable. 

Technologies such as Building Information Modelling (BIM), digital twins, and advanced project data analytics can help streamline design and construction, improve collaboration and reduce errors. Off-site modular construction, where components are created in controlled factory settings also help to improve precision, reduce waste, and speed up delivery. Though these tools and frameworks are readily available and have been in the sector conversation for a decade, they continue to remain underutilised.

As an example, the increasing trend to constructing vertical schools demonstrates a shift towards flexible thinking and in many cases innovative design practice. These multi-level educational facilities can help to address urban density challenges with limited land use. With the right planning and design, full amenity can be delivered within a smaller land footprint, promoting compact design that is cost effective and community focused.

A significant barrier to innovation isn’t technical but rather can be promises on completion dates that do not reflect the time it takes to solve complex challenges through design, and public sector delivery systems that often hinder or even punish creative approaches that are deemed risky and reward safe, conservative repetition. 

An increasingly popular approach for governments is to provide initial funding for preliminary design to support a business case that is reasonably advanced in terms of scope, cost and program. This means decisions on the infrastructure project can be based upon a more mature understanding of legitimate requirements, leading to political promises that are grounded on the reality of project delivery – rather than back of the envelope estimates. 

Private sector firms like GHD have a critical role to play. As specialists who work on infrastructure projects every day, we bring deep technical knowledge, broad international experience that can help unlock bold, creative approaches, together with expertise in project management and business case development. 

Also worth consideration is a maturation of the relationship between government and industry. Collaborative contracting models, early contractor involvement, and shared accountability and risk can be viable options to enable this shift.

Finally, we must recognise that who plans, designs and builds our infrastructure matters. The sector remains male-dominated, and while change is occurring, progress is slow. A broader range of voices leads to better ideas, richer problem-solving and infrastructure that better reflects the communities it serves. Diversity of gender, culture, and experience must be embedded not only in our workforce but also in the way we design, engage and deliver.

Australia’s infrastructure sector is at a crossroads. Fiscal pressures and growing infrastructure needs are key challenges for the sector, but they also present opportunities to embed innovation and centre design around the communities it serves. When we overcome these challenges, we won’t just be building differently, we’ll be building better.

This article has been republished from CEDA under a Creative Commons license. Read the original article here.

"Architecture students today learn about everything except actually building" says Penelope Seidler

By Rupert Bickersteth, digital editor at Dezeen

Rupert is the digital editor at Dezeen. Rupert oversees social media, newsletters, comment moderation, marketing, SEO, web development management and digital engagement at Dezeen – as well as running the Dezeen LIVE reporting from design and architecture festivals around the world, and writing about set design, interiors and architecture projects across art, fashion, restaurants and hotels.

Rupert joined Dezeen in 2022 from the Architects' Journal, where he was latterly the culture editor.
Previously he has worked at magazines including The Architectural Review, TANK and Oyster. He has a degree from the University of Cambridge in history of art.

Architecture students today are being let down by their education, Australian architect Penelope Seidler tells Dezeen in this interview.

"I think young architects are lost," she said. "They want to know what to do, but the teaching seems to be not very particular."

"They're taught all about good things – sustainability, environmentalism, friendly with society, all those things," she added. "They seem to learn everything but actually building."

"The required attributes of an architect are that one should have a good knowledge of building materials first of all, and structural knowledge – you need to learn a lot about how buildings are held up – but I think they should have education about aesthetics."

Penelope Seidler is the director of Sydney-based architecture firm Harry Seidler and Associates, founded by her late husband.

She was speaking to Dezeen at the opening of a major retrospective on Harry Seidler at the San Marco Art Center (SMAC) in Venice, co-organised with the University of Sydney's Chau Chak Wing Museum.

Harry Seidler fled Nazi-ruled Austria as a teenager to eventually become one of Australia's most significant architects. He has been called the father of Australian modernism, particularly known for his work in lightweight concrete.

Today's architecture "very capricious"

Penelope and Harry Seidler married in 1958, and she joined his studio in 1964 after qualifying as an architect.

Speaking about how the profession has changed since Harry Seidler and Associates was founded in 1960, Penelope Seidler – who is also a qualified accountant – said she is "very disappointed in most new buildings".

"Architecturally the problems, in historical terms, were to confront the structural challenges," she said.

"Those problems have been solved – anything is possible and there are no constraints, but visually, I don't think people learn much."

"[Architecture today] is very capricious. You can now build whatever you like wherever you like, but whether it's rational or not, I don't know."

The SMAC exhibition, which is one of two inaugural shows at the gallery following a recent renovation by British architect David Chipperfield, explores Harry Seidler's difficult journey to success.

After fleeing Vienna for Britain in 1938 he was interned by the authorities as an enemy alien and subsequently spent time in internment camps near Liverpool and on the Isle of Man before being shipped to Quebec, Canada.

He was eventually released from internment to study architecture at the University of Manitoba in Winnipeg, and later attended Harvard Graduate School of Design under Walter Gropius and Marcel Breuer.

During school holidays he worked with Alvar Aalto in Boston drawing up plans for the Baker dormitory at the Massachusetts Institute of Technology.

He followed his parents to Sydney, where they had emigrated, initially to design a home for them. The modernist Rose Seidler House was completed in the suburb of Wahroonga in 1950.

Harry Seidler decided to stay in Australia and built more private homes, including working with Penelope on the design of their own house in Killara, Sydney.

He went on to build towers in Sydney and then global projects such as the Australian Embassy in Paris with Breuer and Pier Luigi Nervi.

Nevertheless, Penelope Seidler described her late husband as a "total outsider" in Australia.

"Harry suffered from the fact that he was regarded by many as un-Australian – 'the foreigner'," she said.

Many of his clients were immigrants, she explained, citing Dick Dusseldorp, founder of developer Lendlease, as "the one who could see something in Harry".

Dusseldorp commissioned one of Harry Seidler's most significant projects, the Australia Square Tower.

At the time of its construction in 1967, the Australia Square Tower was the world's tallest lightweight concrete building and introduced the concept of a large public open plaza with prominent artworks to office towers in Australia.

Harry Seidler and Associates would go on to build a number of significant concrete buildings, which – in his words – aimed for "aesthetic dematerialisation", including the Hong Kong Club Building in 1984.

"People say concrete is a bad thing but nonetheless, it's durable," said Penelope Seidler. "We all want to be sustainable and there's a lot spoken about sustainability," she added. "I'm not sure everybody knows exactly what it means."

As well as learning his trade under the direction of Breuer, Gropius and Aalto, Harry Seidler spent several months in 1948 working in Rio de Janeiro with Brazilian architect Oscar Niemeyer.

But even with all these significant 20th century architects shaping his student years, Harry Seidler felt he learned most about aesthetics by studying under the painter Josef Albers at Black Mountain College in North Carolina, according to Penelope Seidler.

Her advice to architecture students today is to study history.

"Study architectural history, and learn from that," she said.

This article has been republished from Dezeen with permission from the author, Rupert Bickersteth. Read original article here.

New business models could help save Australia from its housing crisis

By Kebir M. Jemal, University of Melbourne

Australia has experienced a dramatic rise in housing prices over the past decade. Data from the Australian Institute of Health and Welfare shows that by the end of 2023, median house prices across major cities have risen substantially, with prices in Sydney soaring to a staggering $AU1.3 million.

Canberra, Melbourne and Brisbane followed closely. Those median prices sit at $AU980,000, $AU840,000 and $AU830,000 respectively.

Compared to other countries, home ownership is becoming increasingly out of reach for many Australians – we now lag behind countries like the US and the UK.

And other housing affordability metrics in Australia continue to paint this grim picture.

The house price-to-income ratio now averages at 16.4 times the per capita income, nearly double what it was in 1990, and significantly higher than in 2020.

Affordability for median-income households reflects a similar trend, with only 10 per cent of the housing market now affordable to them, down from 40 per cent in March 2022.

Another key indicator we use to look at affordability shows the number of years to save a 20 per cent deposit now exceeds 13 years in Sydney, followed by 11.8 years in Hobart and 10.9 years in Brisbane.

Additionally, the percentage of household income required to service a new mortgage has also risen across major Australian cities; we’ve got 62.1 per cent in Sydney, and 51.7 per cent in Brisbane, which has doubled since 2019.

All of these metrics tell us just how much Australia’s housing affordability has deteriorated over the past few decades.

But before we explore possible solutions, we need to first understand the root causes.

The mismatch of supply and demand

The housing issue is shaped by a complex blend of factors, including rising demand, changing household incomes, shifting demographics and taxation policies.

One key driver is the mismatch between supply and demand, particularly in rapidly growing urban centres.

With almost half of Australia’s population now living in major cities, economists point to a shortage of available urban homes along with the increasing inability of many Australians to keep up with soaring rent and property prices.  

In response, governments at all levels have committed to increasing the housing supply by 1.2 million new homes by 2029, an ambitious target that requires a 40 per cent increase in annual housing delivery over the next five years.

Despite this promise, there are growing concerns about whether this target is really attainable, particularly with the current approaches to housing construction.

Many housing experts warn that new supply is likely to fall short, citing the limited involvement of local governments in national decision-making as a major barrier.  

In the current Australian housing discussion, the opportunities presented by new business models are largely missing.

For example, some approaches could be inspired by servitisation – where instead of selling the land itself, governments or developers sell land as a service, packaging access with maintenance and infrastructure, perhaps on a lease.

If combined with prefabrication, a smart building method that enables faster, cost-effective construction, it could transform the housing market and help meet the ambitious housing targets.

But how can they be applied in Australia?

Rethinking the way we ‘own’

Servitisation models present a new way of thinking about ownership by shifting the focus from ownership to access.

If we think about the concept in terms of housing, this could enable local councils to respond to urgent housing demands by leasing undeveloped land temporarily.

In particular, this approach can help rapidly deploy temporary homes in response to disaster relief and low-income housing.  Ideas like peppercorn rent schemes –  where land is leased for a nominal fee – mean councils could temporarily meet housing demands.

Land value plays a direct role in housing affordability, with higher costs associated with land often driving up housing prices and impacting people’s ability to afford homes.

Servitisation can help by distributing land costs over a certain period, drastically improving the affordability of social housing schemes, and potentially eliminating the high capital expenditure associated with land.

Combined with prefabrication, servitisation could offer a holistic housing solution that integrates design, fabrication, installation and disassembly, as well as the possibility of bundling building services into the service offering.

Rethinking the way we ‘build’

Prefabrication, also called modular or off-site construction, is a mode of production where building components are manufactured away from the construction site.

By manufacturing standardised and modular components in a controlled environment, this approach offers a faster, cheaper and efficient way to build. These parts are then transported to the building site and assembled like pieces of a puzzle.

Despite its long history in Australia, its adoption in the construction industry has remained limited.

Currently, prefabrication represents less than five per cent of Australia’s $AU150 billion construction industry. Although it’s estimated to reach 15 per cent by the end of this year, we’re still well behind other developed countries like Finland, Norway and Sweden.

In its modern form, prefabrication is a part of a broader, innovative business model known as industrialised building, which combines prefabrication, modularisation and standardisation.

Collectively, this business model promises a range of benefits, including improved productivity, reduced construction waste and significant time and cost savings.

Technology plays a crucial role, supporting every stage of the process from design to production and on-site assembly. By reducing lead time and increasing productivity, these technologies can help drive down costs.

A range of technological enablers, collectively referred to as Industry 4.0 technologies, include sensors, data analytics, robotics, artificial intelligence, additive manufacturing and augmented/virtual reality, contribute to its evolution.

The true cost-saving potential of prefab housing is realised when implemented at scale, enabling economies to drive down cost and improve affordability

With supply bottlenecks and unmet demand, prefabricated houses can potentially boost housing supply in a short timeframe.

Bringing new business models into the housing dialogue

New business models like servitisation and prefabrication hold great promise in addressing Australia’s complex housing challenges.

But current affordable housing discourse tends to focus on government policies, taxation, rising costs and inadequate supply.

While these factors are important, we need to broaden the conversation to include new business models that tap into unique solutions.

At the core of the housing issue is a mismatch between supply and demand, an issue that servitisation and prefabrication are well-positioned to help resolve by offering a whole housing solution on a service basis.

This article was written with the insights of industry professionals, with special thanks to Damien Crough from prefabAUS.

This article is republished from the Pursuit under Creative Commons license. Read the article here.

What is a ‘smart city’ and why should we care? It’s not just a buzzword

Milad Haghani, Associate Professor & Principal Fellow in Urban Risk & Resilience, The University of Melbourne and Abbas Rajabifard, Professor in Geomatics and SDI, The University of Melbourne and Benny Chen, Senior Research Fellow, Infrastructure Engineering, The University of Melbourne

More than half of the world’s population currently lives in cities and this share is expected to rise to nearly 70% by 2050.

It’s no wonder “smart cities” have become a buzzword in urban planning, politics and tech circles, and even media.

The phrase conjures images of self-driving buses, traffic lights controlled by artificial intelligence (AI) and buildings that manage their own energy use.

But for all the attention the term receives, it’s not clear what actually makes a city smart. Is it about the number of sensors installed? The speed of the internet? The presence of a digital dashboard at the town hall?

Governments regularly speak of future-ready cities and the promise of “digital transformation”. But when the term “smart city” is used in policy documents or on the campaign trail, it often lacks clarity.

Over the past two decades, governments around the world have poured billions into smart city initiatives, often with more ambition than clarity. The result has been a patchwork of projects: some genuinely transformative, others flashy but shallow.

So, what does it really mean for a city to be smart? And how can technology solve real urban problems, not just create new ones?

What is a smart city, then?

The term “smart city” has been applied to a wide range of urban technologies and initiatives – from traffic sensors and smart meters to autonomous vehicles and energy-efficient building systems.

But a consistent, working definition remains elusive.

In academic and policy circles, one widely accepted view is that a smart city is one where technology is used to enhance key urban outcomes: liveability, sustainability, social equity and, ultimately, people’s quality of life.

What matters here is whether the application of technology leads to measurable improvements in the way people live, move and interact with the city around them.

By that standard, many “smart city” initiatives fall short, not because the tools don’t exist, but because the focus is often on visibility and symbolic infrastructure rather than impact.

This could be features like high-tech digital kiosks in public spaces that are visibly modern and offer some use and value, but do little to address core urban challenges.

The reality of urban governance – messy, decentralised, often constrained – is a long way from the seamless dashboards and simulations often promised in promotional material.

But there is a way to help join together the various aspects of city living, with the help of “digital twins”.

Smart city and communication network concept. 5G. LPWA (Low Power Wide Area). Wireless communication. / University of Bath

Digital twin (of?) cities

Much of the early focus on smart cities revolved around individual technologies: installing sensors, launching apps or creating control centres. But these tools often worked in isolation and offered limited insight into how the city functioned as a whole.

City digital twins represent a shift in approach.

Instead of layering technology onto existing systems, a city digital twin creates a virtual replica of those systems. It links real-time data across transport, energy, infrastructure and the environment. It’s a kind of living, evolving model of the city that changes as the real city changes.

This enables planners and policymakers to test decisions before making them. They can simulate the impact of a new road, assess the risk of flooding in a changing climate or compare the outcomes of different zoning options.

Used in this way, digital twins support decisions that are better informed, more responsive, and more in tune with how cities actually work.

Not all digital twins operate at the same level. Some offer little more than 3D visualisations, while others bring in real-time data and support complex scenario testing.

The most advanced ones don’t just simulate the city, but interact with it.

Where it’s working

To manage urban change, some cities are already using digital twins to support long-term planning and day-to-day decision-making – and not just as add-ons.

In Singapore, the Virtual Singapore project is one of the most advanced city-scale digital twins in the world.

It integrates high-resolution 3D models of Singapore with real-time and historical data from across the city. The platform has been used by government agencies to model energy consumption, assess climate and air flow impacts of new buildings, manage underground infrastructure, and explore zoning options based on risks like flooding in a highly constrained urban environment.

In Helsinki, the Kalasatama digital twin has been used to evaluate solar energy potential, conduct wind simulations and plan building orientations. It has also been integrated into public engagement processes: the OpenCities Planner platform lets residents explore proposed developments and offer feedback before construction begins.

Urban planners in Helsinki have been using a digital twin to help plan building orientations. / Ninara

We need a smarter conversation about smart cities

If smart cities are going to matter, they must do more than sound and look good. They need to solve real problems, improve people’s lives and protect the privacy and integrity of the data they collect.

That includes being built with strong safeguards against cyber threats. A connected city should not be a more vulnerable city.

The term smart city has always been slippery – more aspiration than definition. That ambiguity makes it hard to measure whether, or how, a city becomes smart. But one thing is clear: being smart doesn’t mean flooding citizens with apps and screens, or wrapping public life in flashy tech.

The smartest cities might not even feel digital on the surface. They would work quietly in the background, gather only the data they need, coordinate it well and use it to make citizens’ life safer, fairer and more efficient.

This article is republished from the Grattan Institute under Creative Commons license. Read it here.

Size Matters: Why construction productivity is so weak

By Melissa Wilson, Senior Economist CEDA and James Brooks, Economist Ceda

Introduction

The construction sector is one of our largest industries and is vital to the functioning of our economy. It plays a critical role in meeting Australians’ housing needs, delivering the infrastructure pipeline and making the energy transition. These goals are important not only for Australians today, but also for generations to come. Our economic prosperity relies on our ability to get things built, but we are losing this ability. Without improvement in this sector we will not be able to deliver on a strong economy and a strong social compact.

Report highlights

Put simply, productivity means producing more of something (an output) with the same or fewer resources (inputs). It is about working smarter, not harder.

Labour productivity in construction (measured as output per hour worked) grew by just 17 per cent over the 29 years from 1994/95 to 2023/24. In contrast, labour productivity grew by 64 per cent in the ‘market-sector’ industries, and 58 per cent in manufacturing over the same period.

Multifactor productivity in construction has been broadly unchanged from 1994/95 to 2023/24. It grew by almost 20 per cent in market sector industries and 23 per cent in manufacturing over the same period.

Productivity has been particularly weak in the building of houses and apartments. Our analysis shows that dwellings built per construction worker have declined by roughly 50 per cent since the 1970s (Figure 3).

These measures do not account for changes in the size and quality of buildings, which have both improved over time. The Productivity Commission has found that, even when adjusting for size and quality improvements, construction labour productivity per hour worked has declined by around 12 per cent since 1994, and still significantly underperformed the wider economy, which experienced labour productivity growth of around 49 per cent over the same period. 

Construction’s productivity performance has been one of the weakest of all sectors in the economy – it is one of only three market-sector industries to have subtracted from overall multifactor productivity growth in recent decades. Boosting productivity in construction will be vital to solving Australia’s housing crisis, rejuvenating weak business investment and supporting a strong economy.

Construction is now dominated by small firms

Construction is one of the least concentrated industries in Australia, made up mainly of small firms and individual subcontractors. Aside from the few very large or highly specialised firms, the number of firms in the industry is far greater than what is needed to deliver effective competition. Our analysis shows this is contributing to the productivity problem.

There are currently 410,602 construction firms in Australia, of which 98.5 per cent are small businesses with fewer than 20 employees. Ninety-one per cent of construction firms are microbusinesses with fewer than five employees, up significantly from 43 per cent in 1988/89. Construction has a much higher share of microbusinesses than comparable industries.

In Australia, firms with fewer than 20 employees account for 53 per cent of total construction sector revenue. Many of these small firms are “construction services” providers, which includes a diverse network of tradespeople and subcontractors. Their large share of construction revenue and employment, and high degree of interconnectedness with the rest of the sector, means that small construction firms are critical to the sector’s overall productivity.

Smaller construction firms are less productive

We analysed previously unreleased ABS data that looked at revenue per employee in construction firms ranging in size from zero to 200+ employees. While we are unable to measure firm-level productivity, revenue per employee acts as a reasonable proxy for labour productivity.

We found that Australian construction firms with 200 or more employees generate 86 per cent more revenue per worker than Australian construction firms with 5 to 19 employees (Figure 5). 

If firms in the Australian construction industry matched the size distribution of firms in the manufacturing industry, the construction industry would produce 12 per cent, or $54 billion, more revenue per year without requiring any additional labour. This is equivalent to gaining an extra 150,000 construction workers. In a sector currently suffering from labour shortages that are holding back progress, this sort of increase

would make substantial inroads in the ability to deliver on critical infrastructure and housing works.

Smaller firms are less able to achieve economies of scale and scope. Consultation with CEDA members and other industry experts has confirmed that the construction industry tends to be fragmented, insular and lacking incentives to adopt new ways of doing things.

WHY ARE THERE SO MANY SMALL CONSTRUCTION FIRMS?

Construction firms have stayed small because the structure of the industry and regulations encourage them to remain so.

Construction is highly segmented and demand is highly cyclical. Downturns in demand can disadvantage businesses that invest in productivity-enhancing assets like machinery, equipment and new technologies. They are therefore more likely to maintain cost flexibility by relying on labour instead of capital inputs, and to favour subcontracting as a more flexible source of labour than direct employment. 

As subcontracting fragments the industry, this has likely increased the time and effort spent on procurement, contract negotiations, supervision and regulation, and dispute resolution. Our consultation has identified reworks and disputes as a major source of inefficiency in the sector.

TAX SETTINGS AND REGULATIONS KEEP FIRMS SMALL

Tax incentives encourage construction firms to remain small

Being self-employed can result in paying less tax than a salaried employee earning the same pre-tax income. Self-employed businesses typically operate as a private company or sole trader.

Our analysis of HILDA income data for people working at least 30 hours per week shows around 8.5 per cent of independent contractors in the construction sector disclose income under the tax-free threshold of $18,200, and therefore pay no tax, compared with just 2 per cent of salaried construction workers (Figure 7). 2.2 per cent of the contractors disclose no income at all, compared with 0.44 per cent of salaried workers.

Self-employed businesses operating as sole traders are taxed at the same marginal tax rates as employees. However, independent contractors must declare and assess their own tax obligations. Self-employed people are more responsive to changes in tax rates and are more likely to report their income just under thresholds where marginal tax rates increase, often called “bunching”.

These results are not unexpected given the structure of our taxation system. Employees or salaried workers typically make ongoing personal income tax contributions deducted from each salary payment with rising thresholds based on income. In contrast, private companies are taxed at a flat rate of 25 per cent for small and medium businesses (with revenue of less than $50 million) and 30 per cent for larger businesses.

Other tax settings also favour smaller construction firms. For example, the instant asset write-off currently allows businesses with turnover of less than $10 million to claim an immediate tax deduction on vehicles and other business assets. There are therefore significant incentives for construction workers to be self-employed under a private company arrangement to minimise their tax bill.

It’s not just individual tax settings that are discouraging scale. Taxes charged at different rates based on firm size can also discourage productive firms from growing, particularly payroll tax.

Australia’s land-use regulation is complex and decentralised

Australia has a complex combination of local, state and federal rules around land-use that often differ across local geographic areas. Australia has the most decentralised system of land-use planning in the OECD.

For example, the development application to build a three-storey block of apartments in Sydney in 1967 was 12 pages long. Today an equivalent building would require extensive structural, environmental, traffic and often heritage assessment, meaning applications are many hundreds if not thousands of pages long.

This can prevent new firms from entering the local market and prevent productive firms from growing. Where there is more regulation or it adds greater uncertainty to large housing projects, firms are more likely to prefer smaller projects that are better suited to smaller, less productive firms. This exacerbates geographic segmentation, makes it harder for firms to grow and reduces the incentive to invest in technology. 

This area is ripe for reform. Our consultations revealed broad agreement that land-use regulation is a barrier to firm size in Australia.

In New Zealand, the Auckland Unitary Plan removed many different zoning restrictions, allowing for higher-density development across the city. The “up-zoning” of Auckland started in 2013 with the introduction of “Special Housing Areas”. It was implemented across three-quarters of Auckland in 2016, and more than tripled approvals for dwellings within six years. It coincided with a significant increase in multifactor productivity in NZ construction.

Other regulations

Other regulations may also be holding back firm size and productivity. This includes state-based occupational licensing, which sets legal requirements to practice an occupation such as being a plumber, painter or electrician. Construction licensing has become more stringent in recent years, which can be detrimental to productivity growth because it makes businesses less dynamic, reduces business entries and exits, and makes it harder for the most productive businesses to grow. The Federal Government’s new plan to introduce national licensing for electricians is a much-needed first step in the right direction.

CONCLUSION AND POLICY DIRECTION

Productivity in the construction industry has been stagnant for three decades. While many factors have contributed to this outcome, a critical driver is the dominance of small firms. Currently, 98.5 per cent of Australian construction firms have fewer than 20 employees. Smaller building companies are less productive than bigger firms because they can't achieve the same productivity gains from economies of scale and scope, innovation and investment.

Our analysis of previously unreleased ABS data shows Australian construction firms with 200 or more employees generate 86 per cent more revenue than those with 5 to 19 employees. If Australian construction firms matched the size distribution of firms in the manufacturing industry, construction would produce 12 per cent, or $54 billion, more revenue per year without requiring any additional labour. This is equivalent to gaining an extra 150,000 construction workers. The dominance of small firms is the result of the cyclical and segmented nature of the industry, combined with the shift to subcontracting that took place in the early 1980s and late 1990s.

Current regulatory settings are keeping builders small:

1. Tax incentives favour independent contractors, who are four times more likely to disclose income under the tax-free threshold than salaried construction workers. Other tax settings, such as the instant asset write-off and payroll tax thresholds, also favour smaller construction firms.

2. Australia has the most decentralised system of land-use regulation in the OECD, which exacerbates geographic segmentation and makes it harder for firms to expand into new areas.

3. Complex, and in some cases increasingly stringent, state-based occupational licensing rules also make it harder for the most productive businesses to expand interstate.

To encourage scale, governments should:

1. Make local and state government regulations more streamlined and consistent.

2. Help to smooth out variability in demand by creating a more consistent, predictable pipeline of construction work through their infrastructure and social housing programs.

3. Better align the relative tax rates for individuals and small and large businesses as part of broader reform of the entire tax system.

Australia has been slow to deliver on critical infrastructure projects and has not built enough homes to keep up with demand. Sydney is now the second most expensive housing market in the world, while Melbourne is seventh and Adelaide ninth.

To help us build smarter, not just harder, we must focus on policies to lift productivity in construction.

This article has been republished from CEDA under Creative Commons license. Read it here.

Victoria’s Property Tax Burden: A Call for Reform in the 2025 State Budget

By Richard Temlett, National Executive Director of Research at Charter Keck Cramer

Richard Temlett is the National Executive Director of Research at Charter Keck Cramer and has become one of Australia’s leading housing market experts and thought leaders on the residential housing market across Australia. Richard believes that property development decisions need to be made using data and an evidence base. He specialises in providing forward looking, evidence-based research and insights that help inform developer and financier strategic property development decisions.

The Victorian Government released the 2025 State Budget this week.

Since 2014 there have been 29 new or increased taxes that specifically relate to the property sector in Victoria. These taxes have distorted the market, impacted purchasing and investment decisions, impeded productivity and more recently deterred investment into Victoria.
The table below shows that Victoria is now the highest taxed State when it comes to property taxes in Australia.

Source: 2024-2025 State Budget Papers, State Revenue Office Victoria, Revenue NSW, Qld Revenue Office, WA Government, Revenue SA, State Revenue Office Tasmania, ACT Revenue Office, Territory Office ABS, Charter Keck Cramer.

A deeper dive into the tax revenue raised by the Victorian State Government shows that 46% of it comes from taxes on the property industry. This is much higher than some of our neighbouring states (NSW is 44% whilst QLD is 37%).

What is particularly concerning is the level of debt that the State has also accumulated since the pandemic. I am constantly hearing from investors that they are attracted to Victoria but are not investing because of the higher taxes and charges and now the greater levels of sovereign risk when compared to other States and Territories.

The Victorian Government is advised to carefully consider its next steps. The “new” housing market has all but collapsed since late 2024 and will take time and Government support at all levels to recover.

Many of the tax policies and changes implemented by the State Government to date have been reactive and regressive. They appear to be based on the assumption that property prices will keep rising and that developers and investors can afford these taxes.

A more proactive and progressive way to address this crisis would be to decrease several of these taxes and charges, reduce red tape, streamline regulations and create more business and investment-friendly settings in a concerted effort to grow the economy. This will encourage innovation, investment & business expansion and will boost productivity and ultimately grow GDP. This in turn will increase Government revenues and reduce the budget deficit in a much more sustainable way without placing unnecessary and unfair financial strain on businesses and individuals.

Melbourne was once the most liveable City in the world. It is possible for the City to regain this mantle, but it starts with the Government taking a progressive longer-term vision with a focus on creating a sustainable path to fiscal stability rather than the current regressive and reactive approach to revenue raising.

This article was republished with the permission of Charter Keck Cramer. Read the original article here.

Victoria’s planning reforms could help solve the housing crisis. But they are under threat

By Brendan Coates, Program Director, Housing and Economic Security, Grattan Institute

Joey Moloney, Deputy Program Director, Housing and Economic Security, Grattan Institute

Matthew Bowes, Associate, Housing and Economic Security, Grattan Institute

Photo by Geometric Photography

The federal election campaign was dominated by the housing crisis. But the real power to solve it rests with the states.

In Victoria, reforms are underway that promise a bigger boost to the housing aspirations of younger generations than anything that occurs in the federal parliament.

Yet these reforms are now under threat of being killed off in the Victorian parliament. If that happens, Victoria will have fewer homes and they will be more expensive, and many more younger Melburnians will be locked out of home ownership.

We need to build more homes

At the heart of our housing problem is the fact we just haven’t built enough homes.

Australia has among the least housing stock per person in the developed world. This is especially true in places where people most want to live: close to jobs, transport, schools and parks.

The reason is simple: we’ve made it hard to build more townhouses and apartments in the most desirable parts of our biggest cities.

Like in other states, Victorian state and local governments have long restricted medium- and high-density developments to appease local opposition. The Neighbourhood Residential Zone – the most restrictive residential zone in Victoria – covers more than 42% of residential land within ten kilometres of the Melbourne CBD.

And the politics of land-use planning – what gets built and where – favour those who oppose change. The people who might live in new housing in established suburbs – if it were to be built – don’t get a say.

The result is a vast “missing middle”: prime inner-city land, close to jobs and transport, with housing rising only one or two storeys. Melbourne, like Sydney, is one of the least-dense cities of its size in the world, despite the city’s population having risen by 875,000 in the past decade alone. That is the equivalent of almost two Canberras.

It’s a myth that most Victorians want a quarter-acre block if that means living a long way from jobs, transport, shops and parks. Research by both Grattan Institute and Infrastructure Victoria shows there is substantial demand for townhouses and apartments in established suburbs, if only we built more of them.

If Melbourne’s middle suburbs – those between two and 20 kilometres from the CBD – were as dense as those of Toronto, that increase in density alone could accommodate all of the 800,000 extra homes the state government plans to build over the next decade.

The flow-on effect is high prices and rents, a stagnating economy because fewer people can live close to jobs, and further expensive and environmentally damaging sprawl into farmland and floodplains.

Recent research showed that 8,000 completed apartments in Melbourne remain unsold. Yet this is less than 3% of all apartments in Melbourne, and is unsurprising given past sharp rises in interest rates and increased barriers in selling to foreign buyers.

That some newly built homes have taken longer to sell is not a reason to prevent the building of those extra homes that so many future Melburnians want to live in.

Victoria’s planning reforms are our best chance

Housing can become more affordable if we allow more homes to be built where residents most want to live.

The Victorian government’s recent reforms, like those in NSW, do just this. Its “activity centre” program will allow more apartments around 60 rail stations and other transport hubs.

Victoria’s new Townhouse and Low-Rise Code will streamline development approval processes for developments of three storeys or less in residential zones across the state. Where developments meet the code, those new homes will no longer need a planning permit and will be exempt from third-party appeals. This is already the case for knock-down rebuilds.

These reforms have the potential to unlock hundreds of thousands of extra homes in the coming decades in areas with some of the best infrastructure, amenities and public spaces.

Similar reforms in Auckland, starting in 2016, contributed to a home building boom that reduced rents by at least 14%. Most of this new stock was townhouses and small apartment buildings, rather than high rises.

Urban density, if done well, can add to neighbourhood amenity while preserving local green space. Several cities with similar populations but higher densities – such as Toronto and Berlin – match or outrank Melbourne on quality-of-life measures.

These reforms are now under threat

These changes do not dictate where housing must be built in Melbourne: they simply permit more housing where demand is highest.

Yet these reforms are now under threat. The Victorian Liberals and the Greens have teamed up to launch an inquiry into the state Labor government’s reforms. The inquiry is scheduled to report on Tuesday, just one day before the deadline for disallowing the reforms lapses.

Together, the Liberals and the Greens have the power to revoke the changes in the upper house of the Victorian parliament. That would be a disaster for housing affordability in Victoria.

The Victorian parliament shouldn’t stand in the way of young families who want to buy a townhouse in the suburb they grew up in, or seniors downsizing to an apartment in their local neighbourhood.

These reforms are about allowing more homes, and creating a better, healthier, and more vibrant Melbourne.

This article is republished from The Conversation under Creative Commons license. Read it here.

Modernising construction: Can we fix Australia’s enduring housing crisis? Yes, we can

By Laura Gutierrez Bucheli Research Fellow, Department of Architecture, Monash University, Duncan Maxwell, Associate Professor, Department of Architecture, Monash University and Rachel Couper, Lecturer, Department of Architecture, Monash University

Despite political promises and public outcry, Australia continues to significantly underperform on its housing targets, currently lagging a staggering 50% behind what is required.

The critical question remains: What is holding us back?

The current election debates in Australia highlight a concerning imbalance in proposed housing policies.

While both major parties focus on demand-side interventions – Labor’s reduced minimum deposit and the Coalition’s mortgage repayment tax deductibility for first home buyers – a much-needed supply-side response is missing.

Labor’s commitment of $10 billion to build 100,000 new homes for first home buyers, coupled with plans to leverage underused government land and streamline development approvals, represents a direct attempt to address the supply shortage. As does its recently announced offer to state governments of $2b in concessional loans over four years to boost housing supply.

However, the experience of the existing Housing Australia Future Fund, established to boost social and affordable housing, reveals the challenges in translating policy into tangible construction outcomes. The fund has faced delays in finalising contracts and commencing construction, highlighting a broader weakness in effectively tackling the fundamental issue of housing supply.

The urgent need for productivity gains in housing

In a direct response to this pressing issue, the Albanese government established the National Housing Accord (Accord) in October 2022. This initiative pledged to facilitate the construction of one million new, well-located dwellings over five years, commencing in 2024.

This commitment explicitly acknowledged the government’s role in boosting the housing supply, subsequently evolving into a more ambitious target of 1.2 million homes by June 2029 – a goal necessitating a quarterly completion rate of approximately 60,000 dwellings.

Alarmingly, the current national construction completion rate – 44,884 homes nationwide in the September 2024 quarter – is demonstrably falling short of the required trajectory.

A significant factor hindering progress is the absence of productivity gains in housing construction.

A recent study by the Productivity Commission revealed that the amount of value workers create each hour has actually gone down by 12% over the past three decades in housing construction. This is surprising because, at the same time, the average worker in Australia is now much more productive (by 49%). This lag in productivity is significantly impacted by escalating construction costs, which have risen by 35% in the past five years.

This productivity challenge shows the urgent need for innovative approaches to building homes more efficiently, utilising resources effectively, and ultimately delivering more dwellings to meet the growing demand.

Our research reveals that historic efforts to address the construction productivity crisis have predominantly centred on improving on-site activities. However, it is well known that making changes during the construction phase is significantly more expensive and offers less flexibility for impactful adjustments.

Our research indicates that project success is heavily influenced by adopting a holistic perspective that prioritises the early stages of design and engineering, where modifications are more cost-effective and easier to implement.

Our research project has also found that leveraging this holistic approach is achievable through the adoption of Modern Methods of Construction (MMC). MMC involves the off-site fabrication of building components in controlled factory environments, followed by on-site assembly.

This process-focused approach significantly reduces reliance on large on-site workforces and enhances project predictability. The utilisation of prefabricated elements and modular construction has the potential to dramatically decrease construction time and resource consumption while simultaneously minimising waste and promoting environmental sustainability – benefits that directly translate to improved sector productivity.

Despite growing awareness of MMC’s potential among government and professional bodies, its widespread implementation will only be realised through substantial structural changes throughout the industry, requiring decisive and coordinated action from both federal and state levels.

Our research reveals that the pursuit of MMC can and will drive productivity improvement, but must be pursued from a holistic industry perspective across product and process rather than simply moving construction offsite.

Such an approach requires a range of interventions that our research has defined and is exploring, namely — a renewed and upskilled workforce that focuses on the integration of design and production, pursues innovation and invests in research, and is underpinned by new business/financial models, within a reformed regulatory context.

Future-focused workforce: Cultivating a modern trades force

International experience confirms that MMC demands a distinct skillset compared to traditional building trades. For white-collar professionals, training programs need to evolve to emphasise digital skills, logistics management, and crucially, design optimisation for efficient off-site production and seamless onsite assembly.

Conversely, blue-collar training should focus on upskilling towards multi-skilled operators proficient in off-site manufacturing processes, alongside enhanced softer skills such as communication, collaboration, and problem-solving.

Cultivating a modern trades workforce involves establishing new roles and clear career pathways within manufacturing facilities, which can attract a more diverse talent pool to the construction sector.

To facilitate this transition, the Vocational Education and Training (VET) sector must proactively adapt its curriculum to meet this evolving demand. This includes a critical update of National Training Packages to incorporate MMC-specific competencies and the creation of multi-credential pathways to foster both awareness and advanced upskilling in MMC methods.

Design for manufacturing and assembly: A new design ethos

Successful MMC adoption hinges on meticulous early planning, including a firm design freeze and strong supply chain coordination, highlighting the crucial role of design. However, fully leveraging MMC also requires a shift in design philosophy towards Design for Manufacture and Assembly (DfMA). This involves actively utilising standardised components and a ‘kit of parts’ approach—akin to how other industries have developed product platforms—facilitated by increased familiarity with available MMC products and potentially a centralised database of such resources.

This entails a transition from predominantly bespoke, site-specific designs towards solutions intentionally conceived and optimised for off-site fabrication and streamlined on-site assembly, and points towards a renewed white-collar workforce and skills base

Empowering small businesses through research and innovation

The distributed and fragmented nature of the Australian construction industry, dominated by numerous small companies, presents a unique challenge for Research & Innovation (R&I) investment.

Contrary to the perception of a sector led by large corporations, the vast majority of construction entities are micro-businesses with limited capacity for strategic future planning and the implementation of significant operational changes. Targeted funding for R&I initiatives specifically aimed at these smaller players is essential.

Our research demonstrates that documenting and disseminating real-world case studies showcasing successful transitions to MMC, particularly those leveraging prototyping for design refinement, testing, and communication, can serve as invaluable knowledge-sharing resources and provide practical lessons learned for small construction companies.

Regulation: Adapting to new ways of building

Existing regulations and contractual frameworks may also present barriers to the widespread adoption of MMC. Risk allocation in new types of contracts, particularly those involving collaboration between manufacturers and main contractors, material procurement, transportation, and on-site storage, needs careful reconsideration to reflect the unique characteristics of MMC projects.

A collaborative approach between industry and government is necessary to identify and address regulatory hurdles and ensure a smooth transition towards modern construction practices.

Financial models: A mismatch with modern construction

A key structural barrier hindering MMC adoption lies within current financial models. Traditional banking practices for development projects typically release funds in stages tied to conventional on-site construction milestones.

This established framework often clashes with the different payment schedules and the need for upfront investment characteristic of off-site manufacturing and construction. Adapting financial instruments to accommodate the unique cash flow requirements of MMC projects is crucial to unlocking their potential.

While the echoes of the 2022 housing crisis remain frustratingly familiar, our research offers a potent recipe for a different future.

By tackling the systemic barriers we've identified – a traditionally skilled but not future-fit workforce, a design ethos rooted in bespoke on-site builds, under-resourced R&I for small businesses, misaligned regulations, and outdated financial models – Australia can finally forge a tangible pathway forward towards supply-side solutions.

Our ongoing research will pursue practical implementation strategies for MMC. This includes designing a purpose-driven VET qualification system tailored for MMC, developing automated tools for streamlining coordination across all project stages, creating accessible R&I frameworks for SMEs through documented case studies and interactive prototyping, and proposing concrete regulatory reforms that actively facilitate off-site construction.

The time for incremental change has passed; a bold, modern approach is essential to finally turn the tide on the nation’s enduring housing crisis.

This article is republished from the Monash Lens under Creative Commons license. Read the original article here.

The uncomfortable question at the heart of housing policy

By Eliza Owen, Head of Research at CoreLogic Australia

Eliza Owen was appointed the Head of Research at CoreLogic Australia in 2020.

She has spent almost a decade as a housing market researcher, reporting extensively on key issues including housing affordability, credit conditions and the impact of the COVID-19 pandemic on housing market performance.

In addition to her role at CoreLogic, Eliza is passionate about sharing her knowledge with broader consumer audiences, and serves as a state advisory council member for NSW/ACT with CEDA. Eliza is also a popular keynote speaker, having presented to thousands in real estate, construction, banking and finance and property development, as well as consumer audiences.

In today's Pulse,  Eliza Owen analyses an uncomfortable question at the heart of the housing policy debate - should home values come down?

Housing has become one of the defining issues of the 2025 Federal Election. As affordability worsens and rental markets remain tight, the question of how to support Australians into secure, affordable housing has rightly become central to both major parties’ campaigns.

Both major parties have released policies aimed at improving access to home ownership, particularly for first-home buyers. Economists and industry experts have expressed concern that many of these proposals target demand in a market already constrained by limited supply. Without corresponding efforts to increase supply, such measures risk placing further upward pressure on already elevated home values, the very dynamic driving the need for intervention in the first place.

Housing is an essential service and Australia’s largest asset class, so any policy shift must weigh the benefits to buyers against the long-term consequences for financial stability, household debt, and household wealth. Essentially, there’s one uncomfortable question underpinning the debate:

Should home values come down?

For many existing homeowners, values do not need to continually rise to deliver strong capital gains. CoreLogic’s quarterly resale data reinforces this. Even if national home values were to fall by 10%, most homeowners would remain in a strong equity position. In the December 2024 quarter, 95.7% of residential resales achieved a nominal profit. If resale values were reduced by 10%, 88.5% of vendors would still have recorded a gain, with the median profit sitting at $263,000. On the flip side, a 10% fall in national home values would rewind the market back to May 2023 levels. The median value to income ratio, which was 8 at the end of last year, would go down to 7.2, and a 20% deposit on the median dwelling value in March 2025 would fall by about $16,000 (from $164,000 to $148,000).

One of the greater financial risks of falling home values recently cited in the lead up to the election is negative equity, which is where home values fall to be less than the value of outstanding mortgage debt. The RBA estimates less than 1% of mortgaged households are in negative equity, and this is in part due to high home values. But, as noted in their latest financial stability review, “even when faced with a severe 30 per cent decline in housing prices, around 9 in 10 mortgagors would still have positive equity”.

Besides this, negative equity is only really a danger when buyers fall behind on their mortgage and need to recoup their debt through the sale of the home. The 2021 census revealed 31% of households owned their home without a mortgage, meaning no risk of negative equity from falling home values. For mortgaged households, around 40% of owner-occupier mortgage holders on variable interest rates are at least two years ahead on mortgage payments, so negative equity should not pose much of an issue to these households, or the broader financial system. Even for recent buyers who have not built up a buffer on their mortgage payments, APRA data shows around 70% of home loans were originated with a deposit of at least 20%, meaning the value of a home would need to fall more than 20% from the purchase value before the buyer was in negative equity.

Western Australia offers a useful case study of the impact to financial stability when between 2014 and 2019, home values fell by 16.1%. This was due to a slowdown in mining investment and weakening iron ore demand, which in turn led to population and economic decline. By mid-2020, nearly 44% of home resales in Perth were made at a nominal loss. Yet despite this prolonged downturn, mortgage arrears remained below 2%, and the financial system remained stable. First home buyers benefitted as the value to income ratio across Perth dwellings fell from 6.6 to 4.8 between June 2014 and June 2019.  This highlights how price corrections can occur without triggering widespread financial distress, provided lending standards remain strong and borrowers are well-positioned.

It is important to stress that the financial position of most mortgaged households has been stable over time because mortgages are traditionally lent with strong buffers, be it a 20% deposit or a serviceability assessment buffer on interest rates (which has been three percentage points on top of the product rate since late 2021). Some of the policy proposals floated ahead of the election, such as expanding low home loan deposit schemes or reducing the serviceability assessment buffer, may pose more risk to financial stability unless housing values do in fact continue to rise.

Reframing the Conversation

A fall in values need not be viewed as a negative for the Australian economy. Housing is not only an investment, but also something people consume. If housing costs were lower relative to income, Australians could redirect more spending to health, education, and technology, potentially even increasing earning potential as a result. Put another way, it wouldn’t be the end of the world if prices were to moderate or even fall slightly.

Still, the reality of cooling demand for housing is complex. Housing value performance is tied to consumption through wealth effects, property taxes are a huge source of state government revenue, and many Australians are employed across the construction, financing and transaction of real estate. Even with widespread equity, households are likely to be sensitive to weakening housing values, with RBA data suggesting residential housing and land currently accounts for 55% of household wealth. Not to mention the recent buyers and investors who purchased during periods of strong growth and are more exposed to price falls. About 20% of residential properties changed hands in the past five years, and roughly 2.6 million home loans have been written in this period (with around one in four going to first home buyers).

But the alternative - runaway prices, deepening inequality, and falling ownership rates - could prove more damaging in the long run. As a nation, we can’t keep kicking the can down the road on housing affordability.  Concessions and incentives for first home buyers might provide a sugar hit to home ownership numbers in the short term, but they do nothing for the long-term viability of home ownership as affordable and attainable.

This article was republished with permission from CoreLogic. Read the original article here.

Let's cut the bullshit - True Housing Solutions Require Courage

by Robert Pradolin, Founder & Director of Housing All Australians

Robert has been active in the property industry for over 40 years, most recently as General Manager of Frasers Property Australia (formally Australand) where he was for over 18 years. He is the founder and Director of Housing All Australians (NFP), is on the Board of Homes Tasmania and on Liverty Housing (which was formally Summer Housing) which is a disability housing provider. Through his career, he sat on a number of industry bodies including the Property Council of Australia (Vic), the Residential Development Council, the Housing Industry Association (Vic), the UDIA (Vic), Salvation Army Housing, Liveable Housing Australia, the Heritage Council of Victoria and was on the Victorian Board of Advisors of the Property Industry Foundation.

As political promises about housing affordability dominate pre-election headlines, we witness a familiar dance: politicians offering quick fixes while fundamental causes of our housing crisis remain unaddressed.

The reality, as economist Peter Tulip from the Centre of Independent Studies consistently highlights, is stark: Australia's housing crisis is primarily a supply problem. While negative gearing and tax concessions make convenient targets, they account for at most 4 percent of housing prices. The true culprits are restrictive planning regulations, NIMBYism, and bureaucratic delays choking our housing market.

KPMG's "Keeping Us Up at Night" report found 48 percent of business leaders identify housing affordability as their top social concern. Yet political discourse circulates around demand-side tinkering – 5 percent deposit schemes or mortgage interest tax breaks – that may help individuals jump the queue but ultimately fuel price inflation.

Housing All Australians has long advocated for housing to be reclassified as fundamental economic infrastructure – as essential as roads, schools, and hospitals. Without decent shelter, we face significant economic and social costs.

We must stop pretending there's a quick fix. Building our way out of this crisis will take decades. The Leptos review of NHFIC (now Housing Australia) in 2021, undertaken during the Morrison government, estimated the investment required to address just social and affordable housing shortfalls at $290 billion over 20 years – that's 44,500 homes annually. The Housing Australia Future Fund aims to build only 11,000 homes per year for five years. Where will the other 33,500 homes come from?

Government alone cannot bridge this gap. We must leverage private capital through innovative partnerships that respect both market economics and social needs. This is where compassionate capitalism enters the equation. Unlike American values that increasingly pit business interests against social responsibility, Australian values embrace the idea that profit and purpose can coexist.

Housing All Australians believes "compassionate capitalism" represents the true values of most Australian businesses. As our national anthem speaks of "wealth for toil" and "Advance Australia Fair," we understand that true advancement requires shared prosperity. Compassionate capitalism embodies this distinctly Australian ideal: Advancing Australia Fairly, ensuring economic growth and social wellbeing develop hand in hand.

This approach is already visible across Australia. The Ascott Group, through Housing All Australians, donated $500,000 in furniture to repurpose Hobart's Amelie House for vulnerable women. Companies like Metricon, Mirvac, Dulux, Interface, and CSR are similarly partnering with Housing All Australians to repurpose vacant buildings as transitional shelter. But this type of corporate philanthropy alone won't solve the problem – it's a short-term response to a country in a housing crisis. It needs systemic reform.

The deeply ingrained nature of compassionate capitalism in the Australian psyche became strikingly evident in September last year, when nearly 1,000 business leaders attended Associate Professor Gregg Colburn's presentation on his book, Homelessness is a Housing Problem. Their attendance wasn't merely professional interest—it reflected an instinctive Australian value response that many mightn't consciously recognise. When confronted with Colburn's findings that tight housing markets and high prices—not individual circumstances like mental health, addiction or poverty—drive homelessness rates, these business leaders responded to a call that resonates with our collective identity: that fair access to life's necessities aligns with both good business and our cultural values.

Shopping trolleys containing clothing and personal items in Adelaide's CBD. Photo: Michael Coghlan CC/Flickr.

Australia's 2021 Census counted 122,000 people experiencing homelessness (including those couch surfing), comparable to New York City's 98,000 (which doesn't count couch surfing). Our nation has effectively the same level of homelessness as a single American city. Australia can still end homelessness. Our increasing level of homelessness is the canary in the coal mine, warning of deeper failures across Australia's entire housing continuum. Our workers struggle to find accommodation near where businesses need them, making this housing crisis a business issue too.

An overlooked barrier to delivery of affordable medium and high-density housing is the differential construction costs between "domestic residential" (which builds housing using traditional subcontractors) versus "commercial residential" (which involves multi storey apartments and designates a unionised workforce).

The significant additional cost in delivering under “commercial residential” conditions means government policies relying on densification of middle-ring suburbs into mid-rise or high rise apartments are unaffordable for average families needing a family sized home. The theory of stopping urban sprawl sounds great, but a family seeking an affordable home cannot live in a 60sq metre apartment.

Creating housing supply that suits diverse societal needs is more complicated than commonly understood. Without deep knowledge of how property and construction industries actually function, idealistic policies are a waste time and resources. Its time we do not have!

Our politicians must level with the Australian public: there is no painless solution. Creating sufficient supply requires challenging entrenched interests, reforming planning laws, increasing density in established suburbs, boosting TAFE output, addressing industrial relations, and understanding how government infrastructure projects impact available resources. The fix to Australia’s housing crisis will take decades and requires considering multiple interconnected elements as part of a comprehensive strategy.

Australia needs, in the national interest, a housing accord that transcends politics – a bipartisan commitment to supply-side reforms that will outlast multiple electoral cycles and embrace private sector involvement. This isn't about the next election; It's about the next generation and the one after that. Our grandchildren's prosperity depends on decisions we make today.

Without addressing our housing crisis, Australia's grandest ambitions will remain just ambitions. It's time to stop political posturing and commit to the difficult, long-term work of building more homes where Australians need them. This requires political courage, planning reform, and honest conversations with communities about the true costs of maintaining the status quo. Anything less is just another empty promise.

This article was published with permission from the author Robert Pradolin from Housing All Australians.

Alternative Assets: The not-so-alternative sectors driving economic growth

By Mark Granter, Executive Managing Director, Alternatives & Client Care, Pacific - CBRE

Mark Granter joined CBRE in 1989 and currently holds the position of Executive Managing Director, Alternatives Capital Markets and Client Care for Pacific. The Alternative sectors are becoming a major focus for both local and global investors. CBRE have over 110 employees focusing on all the Alternative Sectors. Mark’s particular focus is on Healthcare, Data Centres and Renewables. Most recently In the last 1-2 years Mark has worked on some major Alternative appointments, including ANZ Data Centres in Australia and NZ, self-storage capital raise and two significant hospital and life sciences appointments.

Today’s advancing society is forcing the investment landscape to evolve. Recent years, marked by a global pandemic and population growth rates, have exposed the vulnerabilities of certain property sectors. Physical retail stores needed to move online to survive. Hybrid work practices from lockdown mandates pushed the office sector towards flight to quality to entice workers back in. 

“All this has done is highlighted the clear under-investment in sectors essential to a thriving economy and community,” says Mark Granter, CBRE’s Head of Alternatives in Australia and New Zealand.  

While these changes may have affected the typical performance of traditional property sectors like office, retail and hotels, Mark sees this as an opportunity to reset strategies rather than a setback. 

“It’s shown that investors need to diversify their exposure away from those traditional sectors and support these ‘alternative sectors’ if they want to maintain a healthy and balanced property portfolio.” 

What are the alternative asset sectors? 

Alternative assets essentially account for the sectors that reside outside of the traditional property sectors. They deliver the social infrastructure required for a healthy economy and community.

CBRE’s Alternative or ‘Essential’ Industries and Assets:

Energy and Renewables

• Renewables (Solar, Wind, Hydro and Battery Storage)

• Mining

• Oil

• Gas

• Battery

Data Centres

• Digital Infrastructure

• Telecommunications Assets

• Fibre-Optic Networks

Transport and Distribution Infrastructure

• Airports

• Roads

• Ports

• Rail/Intermodal

Living Solutions

• Built to rent

• Build to sell

• Purpose Built Student Accommodation

• Co-Living

• Affordable Housing

• Seniors Living, Aged care, Land Lease Communities

Healthcare and Life Sciences

• Medical

• Consulting Suites

• Hospitals

• Radiology & Imaging

• Mental Health

• Life Sciences

• Laboratories

• Research & Development

Social Infrastructure

• Childcare

• Education

• Recreation

• Self Storage

• Service Station

• Car Wash

• Caravan Parks

• Funeral Homes

What is the growth potential of alternative assets 

Despite the 'alternative' label, these sectors are far from supplementary in terms of growth,risk adjusted returns and performance. “Global investors have always had an allocation towards alternatives,” says Mark.  

“What's happening in Australia is that our local investors and superannuation funds are following suit, recognising the strategic value of these investments.” 

And there’s proof in the numbers.  

1. Renewables: We’re seeing growing investment momentum through HMC Capital’s acquisition of Neoen’s wind, solar and battery assets in Victoria. It’s an acquisition that will form part of HMC’s new $2 billion energy transition fund.  

2. Childcare: In 2024 there was $657 million in childcare sales - up 26% since 2023 - with the most dominant buyers being both local and Asian investors. Yields for this sector have remained very resilient compared to some of the more traditional sectors such as office, retail and industrial. CBRE also sold 14 childcare centres with a total value of $162 million.  

3. Data Centres: Most investment activity has been underscored by major merger and acquisition deals and land sales to operators. The two standout transactions were the $24 billion sale of the AirTrunk to Blackstone and HMC Capital’s acquisition of Global Switch and iSeek.  

4. Land Lease Communities (LLC): In 2024, Atlanta-based Invesco Real Estate made its first investment in Australian LLC. It comes in the form of a strategic capital partnership with Stockland to develop and hold LLCs. The joint venture is expected to inject $1.1 billion in gross development revenue in the early stages. Another major player, Mirvac Group, also announced its binding agreements to acquire one of Australia’s leading land lease operators, Serenitas, in partnership with two other firms for a total consideration of approximately $1 billion.  

“Investors are being driven by strong demographic trends, high population growth, an ageing population, and government initiatives,” Mark explains.  

“Government investment in childcare, the ageing population driving aged care and retirement. Population growth is also driving living sectors like build to rent (BTR). And then there’s the massive growth in the tech sector driving data centres.” 

Seizing the opportunities 

The growth potential is exceptional. Most of these sectors are set to grow 50-60%, if not 100%. A prime example is data centres, which are projected to expand from a $23 billion investment universe to $40 billion in the next five years, driven by the shift towards cloud-based applications, streaming services, social media, and artificial intelligence.  

“Government restrictions could even eventually play into the growth of Australia’s data centre industry, based off the existing restrictions on local data from being hosted on foreign data centres.”  

Alternatives sector challenges to be aware of 

It’s vital for investors to be aware of any challenges in property to help guide their strategies effectively. “The biggest issue in Australia for alternatives is scale,” says Mark. “Our market is small in comparison to other major global markets, but the growth trend is undeniable.” 

Other challenges include the evolving clarity around BTR, however Australian Government’s new laws offer a positive outlook with development tax incentives for developers and providers. 

The rising operating costs and pressure on the medical and healthcare sector is also another. “There is no quick and easy solution there, but we are confident it will be resolved, as private hospitals play an essential role in the Australian health system.” 

Future-proof your growth with CBRE 

As a global leader in property for over a century, CBRE is at the forefront of helping investors navigate dynamic growth sectors. With a team of 110 specialists dedicated across the Australian alternative sectors, CBRE leverages its global strength in specialised asset solutions, including global workplace solutions and partnerships with companies like Turner and Townsend.  

Begin your strongest investment journey in alternatives with us.  

This article is republished with permission from CBRE. Read the original article here.

A grab bag of campaign housing policies. But will they fix the affordability crisis beyond the election?

By Michelle Cull, Associate professor, Western Sydney University

Secure and affordable housing is a fundamental human right for all Australians.

Therefore, it is unsurprising the election campaign is being played out against a backdrop of heightened voter anxiety about rental stress and housing affordability. A growing number of people are unable to access housing that meets their needs.

And it’s not just low-income earners who are affected by housing pressures. It is also the millions of people who make up middle Australia; the very group that will help determine the election outcome.

The solution to Australia’s housing problem is complex. We need to start thinking differently about what reform might look like.

No cheap rents

For most Australians, housing is their biggest and most unavoidable bill.

The average national weekly rent for a unit is A$566 a week. It is even higher in capital cities. To afford this comfortably, renters need an annual income of $130,000.

But for someone on the median income of $72,592 (or $58,575 after tax) half their pay packet is being swallowed by their weekly rent.

This significantly exceeds the 30% benchmark that is a useful measure of housing affordability stress.

Million-dollar homes

The raw numbers are just as eye-watering for home ownership.

The mean price of a residential dwelling in Australia is around $977,000. For house hunters in New South Wales, the figure is even higher at $1.2 million.

The Australian dream of home ownership is out of reach for many low and middle income earners. Photo by Robert Couse-Baker

Rapidly rising house prices over the past few years have contributed to larger home loans and more people with a mortgage.

Only 13% of homes sold in 2022–23 were affordable for a median income household, with housing prices increasing more rapidly than wages.

The cascading price pressures mean first home buyers are finding it harder to save for a deposit.

Policy options

There is an urgent need for housing reform to overcome the affordability and accessibility challenges. There is no shortage of options available to policymakers.

For starters, planning rules and zoning regulations could be eased to facilitate more construction. Vacant commercial properties and office spaces could be repurposed as housing.

Another option includes removing barriers to constructing prefabricated homes, which are more efficient and affordable to build.

Time to be bold

Housing reform often involves debate around negative gearing and capital gains tax concessions for property investors. There are mixed results regarding how they would impact housing affordability and accessibility. The unpopularity of such policies at the 2016 and 2019 elections have since hindered any changes.

But more radical reforms could be considered. They include applying negative gearing to first home buyers, who would benefit by claiming the mortgage interest on their property against their income. The United States allows home-owner couples to claim mortgage interest on the first US$750,000 (A$1.19 million) of their loan to help them secure a home.

Overseas experience

The US policy highlights how high housing costs are not exclusive to Australia.

We could learn from other initiatives adopted overseas. For example, a bylaw passed in Montreal, Canada, requires new developments to include 20% social housing, 20% affordable housing and 20% family units.

Further, Vienna is known for its progressive social housing policies, which include rental caps and housing security. The housing is high quality and often includes access to communal pools, child care, libraries and other facilities.

Here in Australia, the major political parties are mindful that the high cost of housing is political kryptonite. They are fighting the May election armed with policies aimed at improving affordability and availability. But will these policies go far enough?

What the major parties are offering

Labor plans to increase housing supply by 1.2 million homes over five years by changing zoning and planning rules. This includes 20,000 social housing homes and 10,000 affordable rentals for front-line workers such as police and nurses. It will also increase tax incentives for the build-to-rent program to increase rental supply.

These policies are likely to improve affordability and accessibility for lower income earners. However, there will be a wait while homes are constructed. It is also expensive at around $10 billion.

To increase supply, Labor will invest in prefabricated and modular homes, including a national certification system to streamline approvals.

Labor will also expand the Help-to-Buy scheme so more Australians can purchase their first home, although this may push-up prices through increased demand.

The Liberal Party’s policy centrepiece is $5 billion to fast track essential housing infrastructure such as water and sewage, to unlock up to 500,000 homes.

High housing costs have contributed to Australia’s homeless problem. Photo by MART PRODUCTION

The Coalition is also vowing to free up more housing by reducing immigration by 25% and capping the number of international students.

For first home buyers, the Liberals want to allow early access to superannuation of up to $50,000, but studies suggest this could backfire by increasing house prices and hurting retirement savings.

Dream turns to a nightmare

Voters may find merit in one or more of the proposed policies, but bipartisanship will be essential if we are to solve the housing crisis, regardless of the election outcome.

And genuine reform involves more than sugar-hit policies that might find favour during election campaigns. It requires bold, decisive action with investment in areas that benefit those most in need.

Without genuine reform, even more Australians will struggle to put a roof over their heads. The ramifications will be devastating to Australia’s social and economic future.

The Australian dream of owning a home will be at risk of becoming an even bigger nightmare.

This article is republished from The Conversation under Creative Commons license. Read it here.

25 years into a new century and housing is less affordable than ever

Photo by Geometric Photography

By Brendan Coates, Program Director, Housing and Economic Security, Grattan Institute and Joey Moloney, Deputy Program Director, Housing and Economic Security, Grattan Institute and Matthew Bowes, Associate, Housing and Economic Security, Grattan Institute

Of all the problems facing Australia today, few have worsened so rapidly in the past 25 years as housing affordability.

Housing has become more and more expensive – to rent or buy – and home ownership continues to fall among poorer Australians of all ages.

Housing makes up most of Australia’s wealth, so more expensive homes concentrated in fewer hands means growing wealth inequality, with a marked generational divide.

To unwind inequality, we need to make housing cheaper, and that means building much more of it.

Housing has become more expensive

The price of the typical Australian home has grown much faster than incomes since the turn of the century: from about four times median incomes in the early 2000s, to more than eight times today, and nearly 10 times in Sydney.

Housing has also become more expensive to rent, especially since the pandemic.

Rental vacancy rates are at record lows and asking rents (that is for newly advertised properties) have risen fast – by roughly 20% in Sydney and Melbourne in the past four years, and by much more in Brisbane, Adelaide, and Perth.

Home ownership is falling fast among the young

Rising house prices are pushing home ownership out of reach for many younger Australians.

In the early 1990s it took about six years to save a 20% deposit for a typical dwelling for an average household. It now takes more than 12 years.

Unsurprisingly, home ownership rates are falling fastest for younger people. Whereas 57% of 30–34 year-olds owned their home in 2001, just 50% did so by 2021. And just 36% of 25–29 year olds own their home today, down from 43% in 2001.

And home ownership is falling fastest among the poorest 40% of each age group.

Fewer homeowners means more inequality

People on low incomes, who are increasingly renters, are spending more of their incomes on housing.

The real incomes of the lowest fifth of households increased by about 26% between 2003–04 and 2019–20. But more than half of this was chewed up by skyrocketing housing costs, with real incomes after housing costs increasing by only 12%.

In contrast, the real incomes for the highest fifth of households increased by 47%, and their after-housing real incomes by almost as much: 43%.

Wealth inequality in Australia is still around the OECD average but has been climbing for two decades, largely due to rising house prices.

In 2019–20, one-quarter of homeowning households reported net wealth exceeding $1 million. By contrast, median net wealth for non-homeowning households was $60,000.

Since 2003–04, the wealth of high-income households has grown by more than 50%, much of that due to increasing property values. By contrast, the wealth of low-income households – mostly non-homeowners – has grown by less than 10%.

The growing divide between the housing “haves” and “have nots” is largely generational. Older Australians who bought their homes before prices really took off in the early 2000s have seen their share of the country’s wealth steadily climb.

This inequality will get baked in as wealth is passed onto the next generation.

Some Australians will be lucky enough to inherit one or more homes. Others – typically those on lower incomes – will receive none.

To unwind inequality, we need to make housing less expensive

We haven’t built enough

Australians’ demand for housing since the turn of the decade is a story of historically low interest rates, increased access to finance, tax and welfare settings that favour investments in housing, and a booming population.

But one widely-blamed villain – the introduction of the 50% capital gains tax discount in 1999, together with negative gearing – is likely to have played only a small part in rising house prices.

That’s because the value of these tax advantages – about $10.9 billion a year – is tiny compared to Australia’s $11 trillion housing market.

Instead, the biggest problem is that housing construction in recent years hasn’t kept up with increasing demand.

Strong migration over the past two decades has seen Australia’s population rise much faster than most other wealthy countries in recent decades, boosting the number of homes we need. Rising incomes, and demographic trends such as rising rates of divorce and an ageing Australia, have further increased housing demand.

Yet Australia has one of the lowest levels of housing per person of any OECD country, and is one of only four OECD countries where the amount of housing per person went backwards over the past two decades.

This is largely a failure of housing policy. Australia’s land-use planning rules – the rules that dictate what can get built where – are highly restrictive and complex. Current rules and community opposition make it very difficult to build new homes, particularly in the places where people most want to live and work.

More homes would mean less inequality

Fixing this will allow mores home to get built, moderate house price growth, and reduce barriers to home ownership. In turn, this will reduce the inequalities created by our broken housing system.

Easing planning restrictions is hard for governments, because many residents don’t want more homes near theirs.

The good news is that the penny has started to drop and state governments – particularly in Victoria and New South Wales – are making meaningful progress towards allowing more homes in activity centres and on existing transport links.

But now the real test begins: how will governments respond to the backlash from people who would prefer their communities to stay the same?

How well governments hold the line against the so-called NIMBYs (Not In My Back Yard) will tell us a lot about what we can expect to happen to inequality in Australia in the future.

This article is republished from the Grattan Institute under Creative Commons license. Read it here.

Australia's Housing Crisis: The Forgotten Lessons of Bipartisanship

By Adrian Harrington, NSW Chair of Housing All Australians

Adrian Harrington is the former Chair of the National Housing Finance and Investment Corporation and is now the NSW Chair of Housing All Australians

Australia faces a severe housing crisis. Homeownership rates have plummeted, rental vacancies hit record lows, housing costs consume incomes, and homelessness has risen. The Australian dream erodes beneath partisan deadlock.

Politicians talk, posture, blame, but fail to act decisively. The absence of sustained bipartisan housing policy cripples effective response, with brief moments of cross-party cooperation quickly dissolving into political advantage-seeking.

Fragmented and ineffective housing policies have failed Australians for too long.

In 1944, Australia confronted a housing crisis of different origins. World War II had halted construction, materials were scarce, and returning servicemen needed homes. The nation's housing deficit exceeded 300,000 dwellings—on a relative basis, worse than today's shortfall.

As part of the Post-War Reconstruction Authority, the Curtin Labor government established the Commonwealth Housing Commission, whose recommendations received unequivocal bipartisan support. Labor initiated; the subsequent Menzies Liberal government implemented. Neither claimed partisan victory. Both prioritised national need over political advantage.

This bipartisan approach built public housing at unprecedented scale, created accessible finance mechanisms, established housing research bodies, and coordinated federal and state actions effectively. The Commission's vision transcended electoral cycles and party politics.

Houses from the 1950’s

Recent history provides fleeting echoes of this cooperation. The Liberal-National Coalition established the National Housing Finance and Investment Corporation (NHFIC) in 2018, providing low-cost loans to community housing providers and first-home buyer deposit guarantees. Labor supported this initiative, albeit with some reservations.

Five years later, the Albanese Labor government rebranded NHFIC as "Housing Australia" and expanded its remit with the $10 billion Housing Australia Future Fund (HAFF). After initial opposition and six months stalled in the Senate, the HAFF eventually passed with the support of the Greens, but without the strong bipartisan mandate from the Liberal National Coalition necessary for transformative impact.

This pattern repeats endlessly. Labor governments emphasise social housing investment and rental regulation; Liberal-National coalitions focus on demand subsidies, supply deregulation and homeownership. These alternating approaches neutralise progress while the housing crisis worsens with each policy reversal.

Tax policies epitomise this dysfunction. Negative gearing faces perpetual political football status, capital gains concessions swing with electoral fortunes, and housing investment decisions hinge on polling predictions, distorting the market.

State-federal relations compound the paralysis. Planning controls rest with states, taxation powers concentrate federally, infrastructure funding splits unpredictably, and local councils face unfunded mandates. No level of government accepts ultimate responsibility for housing outcomes.

Australia operates without a unified national housing strategy, leaving each state to enforce conflicting policies. Planning laws, tenant protections, and development incentives vary widely, alongside inconsistencies in construction standards, building trade employment laws, property taxes (stamp duty and land tax), land release policies, social housing eligibility, vacancy taxes, and environmental compliance. We can’t even agree on a national definition of affordable housing or a single regulatory framework for community housing, with WA and Victoria opting out entirely.

This patchwork system creates a regulatory maze that weakens national cohesion, hampers effective housing solutions and reduces productivity in the housings sector.

The 1944 Housing Commission created clear accountability structures, established explicit production targets, directed resources efficiently across government levels, and ensured implementation regardless of electoral outcomes. It recognised housing as essential infrastructure deserving of political consensus—principles modern Australia has abandoned.

Economic consequences intensify. Productivity suffers as workers cannot afford housing near employment centres. Labor mobility decreases, household debt reaches dangerous historic highs, and housing stress undermines consumer spending.

Social impacts cut deeper. Intergenerational inequity grows as young Australians face housing barriers their parents never encountered. Class divides widen, social cohesion fractures along housing-wealth lines, and community bonds weaken, while housing stress creates health issues.

Regional disparities sharpen under inconsistent policy. Capital cities experience extreme unaffordability, mining regions undergo violent boom-bust cycles, and rural towns struggle with aging housing stock. One-size partisan policies fail these diverse contexts.

Media coverage reinforces partisan frameworks, with housing analyses reflecting political allegiances rather than evidence. Complex policy proposals face reductive treatment, while nuanced bipartisan approaches generate less coverage than conflict narratives.

Public sentiment recognises this failure. Polling consistently shows housing affordability among top voter concerns across party affiliations. Australians across the political spectrum support substantive action.

The economic scale of Australia's housing challenge dwarfs government capacity. The 2021 Leptos Review of NHFIC quantified this reality. Australia must spend $290 billion over the next 20 years to address the shortfall in social and affordable housing. Government budgets cannot meet this requirement alone. Community housing providers and institutional capital must form essential partnerships with government, yet partisan approaches undermine the policy certainty these partnerships require to deploy capital toward social purpose.

The post-war Housing Commission succeeded because it placed national welfare above political advantage, created institutions that survived electoral cycles, established measurable targets with clear accountability, and recognised housing as fundamental to Australia's social contract.

Modern Australia must rediscover this collaborative spirit. Housing should become a standing national priority with genuine bipartisan commitment. Policy consistency should transcend electoral outcomes. Implementation should receive as much attention as announcement.

New housing estate in Golden Bay, Western Australia 2023

Australians deserve housing security regardless of which party holds power. National prosperity requires housing stability transcending electoral cycles. Social cohesion depends on housing equity that outlasts campaign seasons. Both major parties must acknowledge their respective blind spots and allow ideological preferences to yield to evidence-based pragmatism.

The path forward requires political courage from leaders willing to echo their post-war predecessors by placing nation above party. Both parties must support sensible housing policies and prioritise outcomes over point-scoring. Australia's housing failure directly correlates with its partisan approach to what should be considered essential infrastructure.

With a Federal election just around the corner now is the time to act.

The alternative is continued failure. Australia cannot afford it. Our housing future depends on bipartisan commitment.

First published in The Australian on 20th March 2025.

Permission to republish given by author.

Replacing stamp duty with a land tax could save home buyers big money. Here’s how

Bungalow Adelaide/Mike Coghlan

By Jason Nassios, Associate Professor, Centre of Policy Studies, Victoria University and James Giesecke, Professor, Centre of Policy Studies and the Impact Project, Victoria University

Infrastructure Victoria has released a draft 30-year plan outlining how the state can grow sustainably.

It focuses on key areas like transport, housing, energy, and public services to support a growing population and improve liveability. The plan also suggests ways to make the state’s infrastructure and tax system fairer, more efficient and more sustainable.

The plan’s recommendations are expected to cost between A$60 billion and $75 billion, mostly spent before 2035. This is around 10% of Victoria’s yearly economic output in 2023-24, spread over the next decade.

With Victoria already spending record amounts on infrastructure, and budget deficits forecast until 2025-26, finding the money to fund social housing, transport and other projects is a key challenge. We estimate the Infrastructure Victoria proposals would add between $4 billion and $5 billion to Victorian government expenditure each year.

Yet one of its proposals — replacing stamp duty with an annual land tax — would only cost between $1 million and $5 million to implement, but generate substantial gains for Victorian households.

Why replace stamp duty with land tax?

Stamp duty is one of the biggest barriers to moving house in Victoria and other Australian states. This tax, which people pay when they buy property, adds thousands of dollars to the cost of moving.

In 2022-23, Victorians paid about $12 billion to move house. Of this, $3 billion went to actual moving costs (like real estate services, and removalists) and $9 billion was stamp duty.

That’s an effective tax rate of 300% on the true cost of moving, and in 2023 added about $40,000, or 5.3%, to the cost of purchasing the average Victorian home.

High stamp duty discourages people from relocating, even when their needs change — whether that’s moving for a new job, finding a bigger home for a growing family or downsizing after retirement. This leads to longer commutes, traffic congestion and a less efficient housing market.

Switching from stamp duty to an annual land tax would make moving easier and spread the tax burden more fairly.

Instead of a large, one-time tax when buying a home, all landowners would pay a smaller tax each year. This would help fund schools, hospitals, and other infrastructure more sustainably.

What can we learn from Canberra?

Victoria University’s Centre of Policy Studies studied a similar reform in the Australian Capital Territory, where stamp duty has been gradually phased out since 2012 and replaced with higher general rates (a type of land tax).

Each year, the ACT government sets a target for how much money it needs to raise. Landowners then pay a share of that total, based on the value of their land.

One of the biggest benefits of this approach is that it raises money more efficiently. Unlike other taxes, land taxes don’t discourage investment or economic activity.

The study found removing stamp duty had a big positive impact on the ACT’s economy. Around 80% of the economic boost came from removing stamp duty, while introducing land tax also had benefits. By studying transaction data from the ACT, we showed each 10% reduction stamp duty rates drove a 6% rise in property transactions.

Would it help housing affordability?

One of the main arguments for replacing stamp duty with land tax is its effect on housing prices. Economists widely agree land taxes reduce land values, which makes housing more affordable.

However, the impact of removing stamp duty is less predictable. Our previous research found the effect on house prices depends on how often properties are bought and sold. Apartments, for example, tend to change hands more frequently than houses. Because of this, removing stamp duty tends to push up apartment prices more than house prices.

Even so, the overall effect of the reform is a drop in property prices. The challenge is ensuring this price reduction is evenly spread across different types of housing.

A fairer tax system

To make the system fairer, policymakers could adjust how land tax is applied. One option is to introduce a fixed-rate component, as proposed in New South Wales. Another idea, suggested 15 years ago in the Henry Tax Review, is to base the tax on the per-square-metre value of land.

Another key factor is housing supply. If planning laws allow more high-density housing in inner suburbs, price changes could be better managed.

We also need short-term solutions

Replacing stamp duty with land tax is a long-term reform that would take years to fully implement. The ACT, for example, planned a 20-year transition.

If all state governments implemented this reform, we estimate Australian households would ultimately be better off by about $,1600 per household per year.

In the short term, other policies could help improve housing affordability. These include increasing Commonwealth Rent Assistance and rethinking first-home buyer support. These steps could complement broader tax, infrastructure and housing supply reforms.

The Victorian government is seeking feedback on the draft plan before releasing the final version later this year. This is an opportunity for Victorians to contribute ideas on how to shape the state’s future and ensure its infrastructure and tax system work for everyone.

This article is republished from The Conversation under Creative Commons license. Read it here.

‘A serious wake-up call’: Cyclone Alfred exposes weaknesses in Australia’s vital infrastructure

By Cheryl Desha, Visiting Professor, School of Engineering and Built Environment, Sciences Group, Griffith University

Thousands of residents are mopping up in the wake of ex-Cyclone Alfred, which has damaged homes and cars, flooded roads and gouged out beaches.

I write from Brisbane, where rain has fallen for several days. Most of it is draining to a coastline already swollen and eroded by Alfred’s swell.

Flood warnings are current in southeast Queensland and northeast New South Wales. Many communities are in danger – some of which have faced multiple floods in recent years.

Despite all this, the damage could have been so much worse – and we may not be so lucky next time. Australia must use Cyclone Alfred as a serious wake-up call to bolster our essential infrastructure against disasters.

Flooding and other hazards have caused major disruptions to communities

A complex picture

Cyclones are incredibly complex. They involve multiple interacting hazards such as severe wind, flooding, storm surge and erosion. This makes their impacts hard to predict.

Alfred meandered slowly off the coast for almost a fortnight, fed by warm waters in the Coral Sea. Its movements were made even more complicated by a new moon, which creates extra-high high tides.

Despite these intricacies, experts were able to map the path and character of the cyclone. This was due to collaboration between multiple agencies and personnel across national, state and local governments.

This information was quickly transmitted to the public via local government emergency dashboards, apps and emergency radio broadcasts, as well as traditional media. The warnings meant communities knew what was coming and could prepare accordingly.

However, Alfred’s force exposed major weaknesses in vital infrastructure.

Electricity outages reached record levels, peaking at more than 300,000 across both states. Queensland Premier David Crisafulli described the outages as that state’s “largest ever loss of power” from a natural hazard.

On the Gold Coast, residents of newly built luxury apartments reported rain penetrating past windows and into homes many storeys above the ground.

Falling trees crushed homes and cars, and in at least one case sparked an electrical fire.

In Queensland and NSW, Alfred flooded and damaged roads, causing scores of road closures and traffic signal outages.

Drawing lessons from nature

As climate change worsens, extreme weather will become more frequent and severe. We must minimise the risks of infrastructure failing during these events. It will require a broad range of measures extending beyond those adopted in the past.

Nature is incredibly resilient. It can offer many lessons to decision-makers, engineers, town planners and others. This approach is known as “biomimicry” – innovation that emulates the forms, processes or systems found in nature.

Connected vegetation such as a line of mature trees, wetlands and mangroves can detain and slow water. This means water passing through has less energy to erode land and topple infrastructure. It also allows for water to soak into the ground, which cleans it and filters out debris.

In flood management, holding ponds known as “detention basins” are used to temporarily store stormwater run-off during heavy rain. City parks can be reshaped or upgraded to become detention basins, holding water until it can safely drain away.

The Bremer River (near right) entering the Brisbane River/Kerry Raymond

Urban infrastructure could also mimic the swales and earthen mounds found in nature, by incorporating human-made channels and mounds. These would guide water away from communities and infrastructure, to storage above or underground.

And what about our coastlines? Cyclones stir up huge swells which crash on shores and gouge out beaches. Alfred has left extreme sand erosion up and down the coast.

Coastlines are inherently mobile; sand naturally leaves and returns, depending on the weather. To protect our permanent coastal development, sand dune restoration could provide a line of defence in front of built infrastructure. This option has been implemented in the Netherlands, where it was found to be cost-effective.

In Australia, an estimated 17% of mangroves have been destroyed since European settlement. Mangroves naturally buffer the land from wind and storm surge. Reinstating mangroves could help protect coastal communities from future wind damage, as a 2020 study in Fiji showed.

Coastal erosion at Ocean Shores in the lead up to Cyclone Alfred / Aliceinthealice

Globally, there is a growing movement towards creating “sponge cities”. These are urban areas rich in natural features such as trees, lakes and parks, which can absorb rain (and sometimes wind) and prevent flooding.

Australia is cottoning on to how nature can help protect our cities. But there is much more work to do.

Experts from James Cook University have been deployed to southeast Queensland to capture immediate data after ex-Cyclone Alfred. They are documenting the effects of extreme wind and other hazards on buildings and infrastructure, and collecting data on wind speeds, water ingress and damage caused by debris.

Hopefully, the findings will inform decision-making on construction, building codes and disaster-resilience strategies for communities.

Building back better

Climate change is expected to cause fewer, but generally more severe, tropical cyclones. Combined with other climate-related changes, such as more intense rainfall and higher sea levels, the risk of flooding associated with cyclones will worsen.

Significant money is already being spent on disaster prevention and preparedness. However, more is needed.

Australians should not need another reminder to proactively reduce the damage caused by extreme weather events. But Alfred has certainly provided one.

As the clean up begins, let’s embrace the opportunity to build back better.

This article is republished from The Conversation under Creative Commons license. Read it here.

Shuttered car factories in Australia could be repurposed to make houses faster and cheaper

Manufactured homes side walls are built and then lifted into place

By Ehsan Noroozinejad, Senior Researcher, Urban Transformations Research Centre, Western Sydney University

Australia is in the grip of a severe housing shortage. Many people are finding it extremely difficult to find a place to live in the face of rising rents and property price surges. Homelessness is rising sharply. Tent cities are becoming more common.

The federal government has pledged to encourage the building of about 1.2 million new dwellings over the five years from mid-2024. The problem is, conventional building techniques are unlikely to be able to respond to the scale of demand quickly. Conventional building is expensive and slow. Faster, cheaper construction methods are needed.

There might be a way to accelerate the build. In recent years, car manufacturers Ford, General Motors and Toyota have shuttered their Australian factories, due to intense global competition.

Before these factories fell silent, they were home to trained workers, advanced machinery and efficient production systems. In Australia, companies such as Hickory Group are working to turn car factories into house factories. In Japan, Toyota has been making modular housing for decades, by adapting car production line techniques.

Scaling this approach up in Australia could simultaneously address industrial decline and housing demand.

Cars on assembly line at the Ford factory. Picryl

Can mothballed car factories really make houses?

After years of decline, Australia’s car manufacturing industry came to an end in 2017, when Toyota and General Motors’ factories stopped mass production. Ford’s local factories closed a year earlier. It was the end of 70 years of mass production, though companies such as Premcar are still making local versions of overseas cars.

Thousands of factory workers lost their jobs. But the effect rippled outward, as about 40,000 workers in the supply chain lost their jobs.

These automobile factories left behind more than just empty structures.

Most of them have not been demolished. Some still have advanced manufacturing lines. Their former workers with automation and precise engineering training might be working in different fields, such as caravan manufacturing.

Building a house in a factory has similarities to car manufacturing. Both use modular production, in which individual parts are manufactured and then assembled into a final product.

That’s not to say this would be easy – there would be regulatory hurdles to overcome and the factories would need an overhaul.

One tough part is figuring out how to use modern car-building tools (such as robotics) to make components of houses. While building cars and houses share some ideas, they’re not the same.

Bringing these factories back into production would boost the economies of states such as Victoria.

States such as South Australia have already started down this path, turning Mitsubishi’s defunct Tonsley Park factory into an innovation precinct hosting modular construction companies such as Fusco Constructions, which will begin operations next year.

Meanwhile, much work has been done in Australia and overseas to find ways to mass-produce housing using factories.

Imagine thousands of individual car parts were delivered to your front yard, where workers painstakingly put the car together. This seems crazy. But it’s essentially what we do with houses, especially freestanding ones. Advocates for modern methods of construction have pointed out the inefficiencies of transporting building materials to a site and assembling them there.

Some large-scale builders are already working to automate more of the home-building process. Besides making houses more cheaply, the benefits include centralising production around a factory, protection from weather delays, and the ability to use industrial robots.

Car assembly lines guarantee each component is manufactured to exacting specifications. Automobile manufacturing has been transformed by new technologies, including digital twin simulations, robotics and 3D printing. But the building industry has been slower to take these up. If we can bring these technologies to bear on how we make homes, we can accelerate construction, reduce errors and cut prices.

In fact, we are seeing some car manufacturers moving into home building. Mercedes-Benz, Bugatti, Bentley, Aston Martin and Porsche are all putting their names on high-end homes in some way, while Honda has explored manufacturing smart, low-energy homes.

Change is coming – but slowly

Advanced building techniques are not new to Australia. Prefab buildings are already being built on factory lines by companies such as Fleetwood, ATCO Structures and Logistics and Modscape.

Here, building components are produced in a controlled factory setting before being delivered to the construction site for prompt assembly. Dozens of companies are working in this space. To date, however, most of these buildings will be used as schools, police stations or temporary housing for mining workers.

Last year, the federal government set up a A$900 million fund as an incentive for state and territory governments to accelerate building approvals and take up prefab techniques. To date, the sector is struggling to scale up due to a lack of infrastructure and too few manufacturers.

Other countries are further along the path. In Sweden, up to 84% of detached homes are made with prefabricated components, compared with about 15% in Japan and 5% in the United States, United Kingdom and Australia.

One option is to adopt yet more advanced techniques, such as lean manufacturing and automated assembly. Both of these are well established in car-making, and could be used to increase the speed and accuracy of prefab home construction.

What would it take to make this happen?

Australia’s housing crisis has been years in the making. To solve it, we may need bold solutions.

Converting old car factories into affordable home factories could help accelerate our response to the challenge – and reinvigorate industrial precincts.

It would take work and funding to make this happen. But there are commonalities. Making prefab homes depends on precise, modular production methods that work best when automated. Transitions like these can happen.

This article is republished from The Conversation under Creative Commons license. Read it here.

Politics with Michelle Grattan: Danielle Wood on how to trim back housing regulations

By Michelle Grattan, Professorial Fellow, University of Canberra

Danielle Wood, Chair of the Productivity Commission

Michelle Grattan, Professorial Fellow, University of Canberra

Housing supply in Australia will be a key battleground in the election campaign. With home ownership more and more out of reach for young and not so young Australians, red tape and low productivity are strangling the builder industry just when it needs to be stepping up.

The productivity Commission, the government’s independent think tank, has a new report report pointing to ways governments need to address the issues. In this podcast we talk to commission chair Danielle Wood about the housing challenge, as well as Australia’s parlous productivity performance generally and her drive to get some fresh ideas on how to improve it.

On one of the report’s main recommendation, cutting red tape for construction approvals, Wood says,

I like to think of regulation as a bit like a hedge. […] There’s almost an unwavering tendency for it to grow over time if you don’t clip it back. And I think in housing that’s particularly true. You have multiple levels of government involved, particularly local governments and state governments. Lots of different policy objectives in play. So obviously, quality and safety being pivotal, local amenity, heritage, traffic, environmental, accessibility.

Lots and lots of decisions are taken, often without considering the trade off. And every time we add new regulations or more complex regulations, that imposes a cost. And ultimately that is a drag on housing, productivity and supply.

So what should be done?

We’ve certainly said we think there should be a good look at the national construction code, which is one source of regulatory burden where we think there’s scope to improve. I would love to see state governments – and I think they are turning their mind to this – to look at this question of just the sheer amount of regulation, the timeframes for approvals and look to ways to streamline the burden and also help develop and builders coordinate their way through that process more smoothly.

On why productivity in construction in particular has fallen so far, Wood explains,

You do not see many sectors go backwards in productivity  over that sort of time horizon. One reason is that our homes are bigger and better quality. So I think that is worth noting. If we adjust for that, productivity has declined, but only by 12% rather than 50%.

We haven’t seen the same sort of innovation in homebuilding that we’ve seen in other parts of the economy. We still essentially build most houses the same way we did 100 years ago so we haven’t had that technological change driver of productivity. It’s an industry that’s characterised by lack of scale.

And then there are workforce challenges as well. And, you know, we all hear a lot about the challenge of attracting and retaining skilled trades workers. You know, that can make it hard, particularly building.

The Productivity Commission asked for submissions from the public on how to improve Australia’s productivity more generally. Wood is happy with how the initiaive is going,

It’s been worth the effort. We’ve actually ended up with more than 500 submissions in the end, And they’re from a mix from individuals, from businesses, from organisations. But for me, the beauty is being able to hear from people that we wouldn’t normally hear from in our reviews and the point is that all of us interact with aspects of government policy every day in our lives and I think we absolutely heard that through the submissions.

There were some fun ones there – high quality Japanese public toilets, more freely available free coffee. But more generally, I mean, we heard from small business owners about impacts of red tape and regulation [and] lots of interest in education policy. Unsurprisingly, again, it touches a lot of our lives, but looking for things like more work experience in schools, trying to build more industry-relevant skills into higher education.

This article is republished from The Conversation under Creative Commons license. Read it here.