Transcript Slide 1

John Curtin Institute of Public Policy
Housing Australians :
The Challenges Ahead
Shane Goodwin
Managing Director
Housing Industry Association
1 July 2010
7/20/2015
1
Changing Demographic Profile
“In respect to ageing, between now and 2050, people aged
65 to 84 years will more than double and the number of
people aged 85 and over will more than quadruple. By
2050, there will be only 2.7 people of working age for every
person aged 65 and over. Today there is five.”
Wayne Swan, Treasurer
7/20/2015
2
Australian Population Projections
Low and Base case
Percentage of total population
0-14
15-64
65-84
85 and over
Low = popn. growth of 0.8% p.a.
Base = popn. growth of 1.2% p.a.
2010
19.1
67.4
11.7
1.8
2050
2050 - Low 2050 - Base
15.1
17.2
58.9
60.2
20.0
17.6
6.0
5.1
Source: Treasury projections
7/20/2015
3
National top 20 Building & Population
Hotspots*
National Top 20 Building and Population Hotspots*
*SLAs with in excess of $100 million in residential building work approved in 2008/09 and with an annual population growth rate in excess of the national average
Statistical Local Area
7/20/2015
State / Territory
Residential Building Approved,
2008/09 ($'000)
Annual Population
Growth Rate (%)
1
Whittlesea (C) - North
VIC
484,029
18.3
2
Wyndham (C) - South
VIC
283,717
12.8
3
Griffin-Mango Hill
QLD
149,930
12.8
4
Cardinia (S) - Pakenham
VIC
241,553
10.0
5
Melton (S) - East
VIC
285,195
9.5
6
Wanneroo (C) - North-East
WA
163,165
8.6
7
Wanneroo (C) - North-West
WA
205,488
8.6
8
Wyndham (C) - West
VIC
112,474
7.9
9
Condon-Rasmussen-Bohle Basin
QLD
145,866
7.9
10
Central Pine West
QLD
114,463
7.8
11
Canada Bay (A) - Concord
NSW
111,469
7.4
12
Ipswich (C) - East
QLD
260,177
7.3
13
Wyndham (C) - North
VIC
368,605
6.9
14
Casey (C) - Cranbourne
VIC
333,762
6.4
15
Melton (S) Bal
VIC
161,328
6.1
16
Hume (C) - Craigieburn
VIC
187,488
5.9
17
Onkaparinga (C) - South Coast
SA
117,129
5.6
18
Brisbane City - Inner
QLD
149,069
5.5
19
Melbourne (C) - S'bank-D'lands
VIC
335,165
5.3
20
Caloundra South
QLD
121,760
5.1
4
WA Building & Population Hotspots**
WA Building and Population Hotspots**
**SLAs with in excess of $100 million in residential building work approved in 2008/09 and with an annual population growth rate in excess of the national average
Statistical Local Area
Statistical Divison Residential Building Approved, 2008/09, ($'000)
Annual Population
Growth Rate (%)
1
Wanneroo (C) - North-West
Perth
205,488
8.6
2
Wanneroo (C) - North-East
Perth
163,165
8.6
3
Mandurah (C)
South West
188,511
5.1
4
Port Hedland (T)
Pilbara
138,002
4.9
5
Armadale (C)
Perth
251,948
4.6
6
Cockburn (C)
Perth
255,129
4.5
7
Busselton (S)
South West
142,604
4.3
8
Swan (C)
Perth
241,569
4.1
9
Rockingham (C)
Perth
242,543
4.1
10
Gosnells (C)
Perth
172,573
3.1
11
Stirling (C) - Coastal
Perth
233,484
2.7
12
Stirling (C) - Central
Perth
218,341
2.6
13
Cambridge (T)
Perth
115,795
2.4
14
Canning (C)
Perth
113,397
2.4
7/20/2015
5
Acknowledgement : Bernard Salt - Address to HIA National Policy Congress, Gold Coast, May 2010
7/20/2015
6
Australian Population Growth
Australia's Population Growth by Component - Moving Annual Total
Source: ABS
500000
450000
400000
350000
300000
250000
200000
150000
100000
50000
Total MAT
7/20/2015
Natural Increase MAT
Sep-09
Sep-08
Sep-07
Sep-06
Sep-05
Sep-04
Sep-03
Sep-02
Sep-01
Sep-00
Sep-99
Sep-98
Sep-97
Sep-96
Sep-95
Sep-94
Sep-93
Sep-92
Sep-91
Sep-90
Sep-89
0
Net Overseas Migration MAT
7
Dwelling Requirements
New Dwelling Requirements to 2020
Source: HIA
300,000
250,000
200,000
150,000
Number
100,000
50,000
0
Current projections
Small Australia
Average annual starts required
7/20/2015
Big Australia
Current trend
Housing Starts based on current trend
8
Dwelling Requirements
Total Dwelling Requirements to 2020
Source: ABS,HIA
2,750,000
2,419,811
2,500,000
2,250,000
Current Trend
2,000,000
1,920,000
1,819,811
Current projections
Small Australia
2,059,811
1,750,000
1,500,000
1,250,000
1,000,000
Number
750,000
500,000
250,000
0
Total new dwellings required
7/20/2015
Big Australia
Current Capacity
Current trend
Potential Capacity
9
Housing Shortfall
Average annual shortfall in Housing Starts
Source: HIA
100,000
90,000
80,000
Number
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Current projections
Natural growth
Big Australia
Current trend
Average annual shortage
7/20/2015
10
Housing Shortfall
Dwelling Requirements versus Industry Capacity
Source: HIA
210,000
200,000
Number
190,000
180,000
170,000
160,000
150,000
2010
7/20/2015
2011
2012
2013
2014
2015
2016
2017
Dwelling requirement
Potential Capacity
Capacity with modest improvement on supply side
Current Capacity
2018
2019
2020
11
Housing Affordability Decline
Housing Affordability in Australia
Source: HIA Affordabilit y Report
300.0
275.0
250.0
225.0
200.0
175.0
150.0
125.0
100.0
75.0
Australia
7/20/2015
Capital Cities
Mar-10
Mar-09
Mar-08
Mar-07
Mar-06
Mar-05
Mar-04
Mar-03
Mar-02
Mar-01
Mar-00
Mar-99
Mar-98
Mar-97
Mar-96
Mar-95
Mar-94
Mar-93
Mar-92
Mar-91
Mar-90
Mar-89
Mar-88
50.0
Rest of State
12
Housing Shortfall
How Many Homes can People Afford to Build?
Source: HIA
200,000
195,000
190,000
Number
185,000
180,000
175,000
170,000
165,000
160,000
2010
2011
2012
2013
2014
Dwelling requirement
7/20/2015
2015
2016
2017
2018
2019
2020
Actual (affordable) demand
13
Average number of persons in
household
Australia
Average
number of persons in -household
- Australia
Source: ABS 4130.0
2.75
2.70
2.69
2.68
2.67
2.65
Number of persons
2.65
2.62
2.60
2.58
2.56
2.55
2.53
2.53
2.51
2.50
2.45
Average number of persons in household
7/20/2015
2007–08
2005–06
2003–04
2002–03
2000–01
1999–00
1997–98
1996–97
1995–96
1994–95
2.40
Source: ABS4130.0
14
Obstacles to boosting supply
Systemic obstacles to boosting Australia’s supply of
housing stock:
 Lack of readily available land
 Planning delays
 Infrastructure tax and charges
 Finance constraints
7/20/2015
15
State Planning & Building processes for
Detached Housing Approvals (1 May 2010)
State
Is planning approval required for detached housing in
your state?
Yes/No and % of applications captured
Queensland
No, for a standard house on a standard size allotment no
planning approval is required. An approval may be
required on small allotments, in character areas, or where
some environmental aspect is in place. 10 – 15%
Yes – 90%
State Housing Code introduced in 2008 with target of 50%
complying development
Yes – 10%
NSW
ACT
Victoria
No – general trigger is lots less than 300m2 (councils do
vary this) or an overlay. % required around 10-15%
South
Australia
Western
Australia
Yes – 100%
Tasmania
Yes – 99%
7/20/2015
No
Does your state have a combined
planning & building (single) approval
OR building approval only process for
detached housing?
Yes – Building (development) approval.
Can be done by building certifier
Yes – Complying development 10%. Can
be done by council or accredited certifier
Yes – Compliant exempt development –
100% greenfield, 90% infill. Done by
certifier.
Yes – As of Right (ResCode) Building
permit only.
Variations can be considered by Council
under a report consent.
90%
No
Yes, but only when Variations are
required to the Design Codes, Local
Government Structure and DAP
No (Draft ResCode on exhibition
currently)
16
House and Land
House and Land Package Examples
Sydney
Melbourne
1990
2000
2010
1990
2000
2010
Land
$50,000
$75,000
$160,000
$46,000
$64,000
$130,000
House
$80,000
$145,000 $259,000
$85,000
$153,232 $242,000
Levies and Charges*
$5,000
$19,000
$110,000
$1,900
$7,080
$27,000
*Infrastructure charges, local government regulations, compliance costs. Excludes stamp duty
1990
$49,000
$75,000
$1,500
Brisbane
2000
$74,000
$132,791
$4,522
2010
$150,000
$263,000
$41,550
Source: HIA
7/20/2015
17
House and Land
Charges for House and Land
Mid 1980's
Mid 1990's
2008
Sydney
Commonwealth charges
State charges
Local charges
Final price
$0
$3,500
$2,000
$157,275
$0
$17,500
$4,000
$196,750
$45,650
$50,150
$35,600
$510,594
Brisbane
Commonwealth charges
State charges
Local charges
Final price
$0
$300
$1,500
$93,063
$0
$2,692
$2,580
$144,475
$36,757
$10,920
$15,000
$507,723
Melbourne
Commonwealth charges
State charges
Local charges
Final price
7/20/2015
$0
$500
$2,000
$124,435
$0
$2,568
$5,412
$149,494
$30,405
$10,966
$9,120
$343,746
18
Capping of Levies in NSW
Example of Reduction in Section 94 Charges
Pre December 2008
Local Council (s94)
$58,970
State Infrastructure
Up to $33,000
Water Charges
$18,000
Total
$109,970
December 2008 to June 2010
$58,970
$11,000
$0
$69,970
After 7 June 2010
$20,000
$11,000
$0
$31,000
Notes:
1. No exemptions existed prior to December 2008
2. The state Infrastructure Charge (SIC) of $33,000 was reduced to $11,000 in the December 2008 announcement. (HIA is currently
lobbying to retain this cap beyond July 2011.)
3. The water charge was also removed in the December 2008 announcement
4. The majority of councils in the SW growth area were granted an exemption to the December 2008 ($20,000) cap
7/20/2015
19
Infrastructure Backlogs
 Significant infrastructure investment backlogs (2005):
 Electricity has an under-investment of $1.15 billion
 Gas has an under-investment of $2.6 billion
 Road has an under-investment of $10 billion
 Rail has an under-investment of $8.06 billion
 Water has a potential under-investment of $3 billion
The total estimated under-investment is $24.81 billion
7/20/2015
20
Source : 2005 Australian Infrastructure, Report Card, Institution of Engineers Australia
Workforce Profile
Age Profile of the Workforce: Construction Industry
Source: HIA
30
27.8
25.0
25
19.9
Age
20
15
12.0
10.3
10
5.0
5
0
15-19
7/20/2015
20-24
25-34
35-44
45-54
Over 55
21
Trade & Non-Trade Commencements
Seasonally adjusted, 1999-2009 (‘000)
60.0
50.0
Number ('000)
40.0
30.0
20.0
10.0
0.0
Dec 1999
Dec 2000
Dec 2001
Dec 2002
Dec 2003
Trade
7/20/2015
Dec 2004
Dec 2005
Dec 2006
Dec 2007
Dec 2008
Dec 2009
Non-trade
22
Apprentice Commencements
Commencements
Qtr
31 Mar 2005
30 June 2005
30 Sept 2005
31 Dec 2005
31 Mar 2006
30 June 2006
30 Sept 2006
31 Dec 2006
31 Mar 2007
30 June 2007
30 Sept 2007
31 Dec 2007
31 Mar 2008
30 June 2008
30 Sept 2008
31 Dec 2008
31 March 2009
30 June 2009
30 Sept 2009
31 Dec 2009
7,400
3,300
4,200
3,400
7,500
3,500
4,200
4,200
8,400
4,400
5,200
4,500
9,700
4,800
4,300
3,500
6,300
3,300
3,400
5,780
Year
Year total
2005
18,267
2006
19,392
2007
22,460
2008
22,276
2009
18,877
I
7/20/2015
23
Apprentice and Trainee Attrition
Rates from Contracts, by Occupation
Apprentice and Trainee Attrition rates from Contracts, by
Occupation
(sub-major groups) and times of withdrawal, 2003 commencing cohort
60.0
46.9
50.0
49.2
Percent (%)
39.7
40.0
30.0
25.4
20.0
15.1
8.7
10.0
3.0
0.0
1 month
Source: NCVER
7/20/2015
3 months
6 months
1 year
2 years
3 years
More than 3
years
Time Frame
24
Commonwealth Skilled Occupation List
Skills Shortages 1 July 2010
 Air-conditioning mechanic
 Architect
 Bricklayer
 Carpenter
 Carpenter & Joiner
 Construction project manager
 Drainer
 Electrician
 Fibrous plasterer
 Gasfitter
 Geotechnical engineer
7/20/2015











Glazier
Joiner
Painter
Plumber
Project builder
Quantity surveyor
Roof plumber
Solid plasterer
Stonemason
Structural engineer
Wall & floor tiler
25
Summary of Commonwealth Incentive
Payments for Apprentices in Building Industry
7/20/2015
26
Summary of State Incentive Payments for
Apprentices in Building Industry
7/20/2015
27
7/20/2015
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