Key Takeaways
- Gentle density can deliver more housing in middle-ring neighborhoods while making better use of existing infrastructure and transport networks
- Planning reforms can increase building consents and reduce house prices
- Redeveloping strata-titled sites in Melbourne could deliver an additional 100,000 homes
- New infrastructure such as Melbourne’s Metro tunnel would be used more efficiently if more homes were allowed near transport hubs
- The federal government is offering incentives to councils and state governments to boost housing projects
Introduction to Housing Reforms
The concept of gentle density has been proposed as a solution to the housing shortage in Australia. According to experts, gentle density can deliver more housing in middle-ring neighborhoods where people want to live, while making better use of existing infrastructure and transport networks. This approach involves increasing the number of dwellings allowed per hectare, which can help to reduce house prices and make housing more affordable. The Committee for Economic Development of Australia (CEDA) has argued that planning reforms can increase building consents and reduce house prices, citing the example of Auckland where property values were climbing rapidly before the introduction of planning reforms.
The Impact of Planning Reforms
The introduction of planning reforms in Auckland led to a significant increase in building consents, with a 50% increase within five years. House prices were estimated to be 15 to 27% lower than they would otherwise have been. In Melbourne, the report estimates that more than 1000 strata-titled sites within 15 kilometers of the CBD could deliver an additional 100,000 homes if redeveloped. This proposal is similar to one suggested by the Grattan Institute, which estimated that Melbourne could build an extra 431,000 homes within 15 kilometers of the city centre, and in Sydney, up to an extra 1 million homes could be commercially feasible. The use of new infrastructure such as Melbourne’s Metro tunnel would also be more efficient if more homes were allowed near transport hubs.
The Need for Sustained Effort
The NSW and Victorian governments are already introducing reforms, but the entire nation needs to do more to address the housing shortage. According to Adams, there needs to be a sustained effort and an ongoing culture of ‘yes if’ that promotes speed and predictability and gets more people into homes in neighborhoods already rich in amenities. Apart from increasing the number of dwellings allowed per hectare, CEDA believes that state governments should reward councils that meet housing targets and penalize those that fail to meet them. The federal government is already offering $500 million to councils to help them provide necessary infrastructure for new homes, and another $1 billion has gone to state governments to encourage them to provide infrastructure or planning reform to boost the number of housing projects underway.
The Impact on the Property Market
An increase in housing is expected to temper a property market that is on track to experience a nationwide lift in prices of more than 8% for the year. AMP chief economist Shane Oliver has said that the increase in prices is likely to slow in 2026 due to affordability pressures, the chance of an interest rate increase, and the Australian Prudential Regulation Authority’s plans to tighten lending standards from February. While some slowing in population growth and improving housing completions are bringing the property market into better balance on an annual basis, there is still an accumulated housing shortfall that has built up over the last few years of underbuilding. The increase in housing supply is expected to help address this shortfall and make housing more affordable for Australians.
Conclusion
In conclusion, gentle density and planning reforms can play a crucial role in addressing the housing shortage in Australia. By increasing the number of dwellings allowed per hectare and making better use of existing infrastructure and transport networks, it is possible to deliver more housing in middle-ring neighborhoods where people want to live. The federal government’s incentives to councils and state governments to boost housing projects are a step in the right direction, and it is essential to sustain this effort to address the housing shortage. With the property market expected to experience a slowdown in price growth, the increased supply of housing is expected to help make housing more affordable for Australians.