Construction Industry Tackling Global Housing Shortage

The construction industry worldwide faces the challenge of helping governments meet a shortage of affordable housing.

Australia is just one of many countries facing such a housing crisis, which is why two years ago the country’s coalition government announced new policies to boost housing supply.

The Coalition consulted with hundreds of local councils across the nation to discuss housing supply constraints and practical ways to overcome these challenges. 

The consultation highlighted one key problem: lack of funding for critical enabling infrastructure.

This week, the Coalition announced a commitment to a AU$5 billion infrastructure package, to boost more home building across Australia and get homes delivered faster.

This funding for states and territories will support key ‘last mile’ infrastructure to build the roads, sewers, energy supply and water infrastructure, which is critically needed to get homes shovel ready faster. 

“The Housing Industry Association (HIA) welcomes this important investment that would kickstart and bring forward new housing in greenfield estates and in turn significantly boost current housing supply levels,” HIA Managing Director, Jocelyn Martin says.

Australia housing development infrastructure boost 

The HIA is a national organisation that represents the interests of Australia's residential building industry, supporting building professionals with industry expertise, guidance and resources. 

Martin adds: “Our members consistently tell us that it is the lack of investment in infrastructure which slows down their ability to bring homes to market faster. We know that efficiently delivered greenfield housing is the quickest way to deliver homes for Australians.

The HIA also called for the government to reduce bureaucracy, to speed the delivery of housing developments.

“The residential construction industry, and particularly small businesses, are struggling under the weight of red tape and this is hampering the delivery of new homes,” says Martin.

Housing development too slow in UK, France, Germany

It’s a similar story in other regions.

Nick Whitten is a Senior Director at JLL, a professional services firm that specialises in real estate and investment management. 

Whitten highlights the severity of the housing crisis across major European economies: "The three largest economies in Europe – UK, France and Germany –  have been gripped by a steep decline in housebuilding, with a combined housing undersupply of almost 1.6 million homes in the five years between 2018 and 2022.

"Over the course of 2023 and 2024, JLL predicts a further undersupply totalling 1.1m homes, which is equivalent to building only 50% of the three countries' housing need.”

He adds: "The first step in the right direction is a coordinated approach. Europe has a shared problem and there needs to be recognition of the social and economic benefit of delivering new housing. Long-term investment is needed and careers in construction should be encouraged."