The housing crisis will worsen very quickly unless the Government takes firm, decisive action.
The Home Builders Action Group [HBAG] has been sounding the alarm for many months about the heartbreak of
- Families waiting years for their homes to be finished; and the
- Financial ruin of many small to medium sized builders They face closing their doors unless there is real Government assistance.
And all the time, the problem has got worse.
QUICK DECISIVE ACTION IS REQUIRED
The steps to combat and recover from the crisis are clear:
- The Government should quickly define the true nature and extent of the problem. That means talking immediately to small and medium-sized builders in particular, to get an accurate readout of the problem which will be quickly and easily assessable;
- Next, there needs to be a commitment to adequate, targeted assistance to families and builders.
- Families forced to pay rent and mortgages in a time of spiraling costs of living need help. Their need is much more urgent than massive transnational mining companies who have lost markets and are now asking for millions.
- Builders with contracts turned into loss-makers by the Government’s actions must be given assistance on the basis of those contracts. That will make sure the assistance goes where it is needed and not to the wrong builders.
- The Builders Support facility must be revisited to:
- Increase the size of the loan that can be borrowed. At present it is $300,000 and it should be three times that amount. The $10 million set aside for this assistance is not a drop in the ocean, especially when it takes months to get the loan;
- Increase the builders who are eligible
- Make it easier to apply and quicker to qualify; and
- Recognise that the waiting time of six months for the first loan to be made has the opposite effect to that intended. It holds up homes while the qualification process is completed.
- The Government must immediately move to allow builders to pass on fully justified and unavoidable cost increases. Now, the government says increases are unlawful although with its own contracts it has recognized the problem and allowed builders to pass on increases on Government jobs. Where’s the fairness; and in the medium term.
- Trade training must be urgently reviewed to produce more tradespeople quicker. It is no use the Minister crossing fingers and hoping for more skilled migrants.
THE SERIOUSNESS OF THE PROBLEM IS CLEAR
The Premier says it’s a serious problem, the Housing Minister says he is “pulling every lever” to improve the position, the Treasurer announces a loans scheme that is too little too late and, if one mother is to be believed, when she sought help she was told to ring Lifeline by the Minister for Commerce.
But nothing is done – Why would anyone be surprised at the worsening problem?
The Builders Support facility is a perfect example of what’s wrong. It was announced at a major media event in the first week of January. The Deputy Premier and two other Ministers promised quick action to provide interest free loans to qualified builders. Now, more than six months later, the government boasts that 13 builders have been given loans. This is less than a third of the applicants. Remember, this is Loans Scheme – it is not ‘free money’ and must be repaid.
Now we have NICHE Living. Talk about Groundhog Day, the Treasurer continues to trumpet the government’s commitment to families including housing and the Minister for Housing repeatedly says he is “pulling every lever” to solve the housing crisis. Families continue to wait for homes, some started 3 or more years ago and small to medium sized builders continue to close their doors leaving families stranded with inadequate insurance and big bills. Increasingly urgent inquiries are met with a standard response: “The Government cannot discuss applications for assistance and cannot say when the first loan will be made”.
On top of that, one of the State’s biggest builders is warning about exploding pipes requiring remedial work that will cost millions.
Does anyone really believe providing more money for housing will finish a single NICHE LIVING home any earlier. It won’t. What it will do is make it tougher for NICHE to finish the homes already on their books which in some cases are four years overdue.
It is instructive to reflect on the causes of the crisis.
HBAG has repeatedly stressed that this crisis in home building is due to the impact of immediate past and present contracts turned lossmaking by two major factors:
- The impact of Government stimulus that pushes cost increases to levels not previously seen in the industry; and
- The Home Building Contracts Act (1990) who prevent builders from passing on fully justified cost increases that were unavoidable.
And it appears we are about to repeat the problem. Federal and State Governments are talking up more money for housing – they seem to think this is a Demand problem when the opposite is the case. The problem is the lack of capacity in a just recovering industry to meet the demand for homes. All more stiumulus money will do is boost prices further and create new demand bottlenecks.
If you require any further information or comment, please contact the undersigned.
Jason Janssen
CHAIRMAN HBAG
0412 373 404
Damien D’Ascenzo
DEPUTY CHAIRMAN HBAG
0403 066 028