‘Same old homes’ not fit for a modern Australia

While parts of Australia have affordability issues, the AHURI found that developers who try to build lower-cost properties are having difficulty obtaining finances.

“The high cost of land, particularly in accessible locations that are well suited to medium and higher-density built form and non-speculative and affordable housing projects, presents a significant challenge for site acquisition. ‘Land vendor expectations typically reflect the highest and best economic use value of land,’” lead researcher Dr Catherine Gilbert from the University of Sydney said.

“This means that the projects that are best able to compete for sites are those that maximise density allowances and deliver housing for sale at market rates.”

The AHURI said a lack of government support through subsidies for affordable development is a challenge for low-income groups trying to provide affordable housing on a significant scale.

The report also found that land-use zoning laws can have a significant impact on whether diverse housing types, such as medium-density housing, are permitted in residential areas, or whether they are financially viable to develop. But they are not the only factors challenging the delivery of diverse housing supply.

“[The research] found that the barriers to diverse housing are more complex than land-use planning constraints and that housing diversity doesn’t simply mean high-rise housing,” Dr Gilbert said.

“For example, where zoning laws do allow for apartment buildings, land prices are typically higher, meaning that medium-density housing forms, including townhouses, are not financially viable, which prevents the development of much-needed diverse housing.”