MAKING HOUSING AND RENTAL AFFORDABLE
Fig 1. Leafy Australian Suburbia — Click picture to enlarge
Executive Summary
The objective of this proposed National Housing Scheme is to deliver a modest three-bedroom home on an 800 m² block for under $300,000 to first-home-buyer families. The scheme draws on the highly successful Defence Service Homes Scheme and will be delivered through a new Public Land Supply Authority working in partnership with willing States and Councils. It will provide cost-price serviced blocks, low-interest government mortgages at the Commonwealth bond rate, and strict but fair covenants to ensure genuine home ownership rather than speculation.
Background
Broad-based home ownership is key to raising families, wealth formation, retirement security, civic participation, and intergenerational stability. At present, home ownership is generally unaffordable for young families. This scheme addresses the root causes: restricted land supply, excessive regulatory cost stacks, mass immigration, and foreign ownership of residential property.
Lessons from the Defence Service Homes Scheme
The War Service Homes Act 1918 created a Commission that acquired land, developed estates, provided standard designs, and offered low-interest loans. By 1969 it had delivered over 280,000 homes — approximately 10% of Australia’s total housing stock at genuinely affordable prices. Its success came from minimal government bureaucracy, competitive tenders, and direct engagement of first-home buyers with private builders.
Creation of a Public Land Supply Authority
A new Public Land Supply Authority (or reformed existing body) will be established to:
- Secure greenfield, Crown or under-utilised land (using compulsory acquisition if necessary)
- Call competitive public tenders for full servicing of land
- Award contracts on merit and best value
- Engage multiple developers to drive efficiency and prevent monopolisation
Objectives of the Scheme
The scheme is strictly focused on enabling genuine home ownership for young families. Serviced blocks will be 650–800 m² and sold at exact cost price. The target is a modest three-bedroom home on an 800 m² block for under $300,000 total. A 10-year covenant prevents sale of the house and land to prevent speculation.
Eligibility, Covenants and Financing
To be eligible, couples must be Australian citizens who are genuine first-home buyers (no prior property ownership by either person in the relationship). Priority is given to younger applicants (generally under 35) and essential workers. Purchasers must commence building within 12 months and provide evidence of finance and a building contract. Mortgages will be offered at the prevailing Commonwealth 10-year bond rate (currently around 4.7%) for up to 25 years.
Deregulation
A major reason housing is unaffordable is the enormous “regulatory cost stack” imposed by governments and utilities — currently ranging from $73,000 to $185,000 per block. These costs include unnecessary levies, contributions, compliance overheads, and approval processes that were once funded by government but have since been shifted onto home buyers. Examples include the NSW BASIX scheme (which alone adds thousands of dollars to every new home) and lengthy council approval processes that impose significant administrative and financial burdens repaid over 25 years at commercial interest rates.
To solve thie, there is a need for a Senate inquiry, aided by an expert working group, to be established to examine these regulatory costs, verify their necessity, and recommend major reductions. The goal is to remove red and green tape that brings no real value.
Rental Deregulation
Current rental regulations have stripped landlords of basic property rights while granting tenants excessive protections. This has made renting unattractive for many owners, leading to reduced supply and higher rents. Argentina provides a clear example of what happens when rent controls are removed. After scrapping its rent controls, the rental market has thrived: more properties became available, rents stabilised in real terms, and both tenants and landlords benefited. Similar deregulation in Australia would encourage property owners to once again rent their homes without fear of losing money or suffering damage to their property.
Boosting Builder Productivity
The scheme will also focus on ways that it would be possible to boost builder productivity through the application of technology in order to dramatically reduce plan-drafting time, development of accurate bills of materials, ordering materials, accounting, sales and marketing, general clerical overheads, risk and compliance costs, with all savings being passed on to purchasers. These improvements are essential if Australia is to overcome manpower shortages in the home building industry in order to satisfy the demand this scheme will generate.
Expected Benefits
The scheme will deliver:
- Affordable home ownership for young families
- Increased housing supply and economic growth
- Reversal of declining home-ownership rates
- Higher birth rates and long-term national demographic stability
Call to Action
It is proposed that a Senate inquiry into regulatory cost stacks be initiated and that the Public Land Supply Authority be established to deliver genuinely affordable homes. Input is invited from the Housing Industry Association, Urban Development Institute of Australia, and Local Government Association to refine and implement this practical, proven solution.
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