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The nation’s top business executives have named housing affordability and supply the top issue Australia must solve by 2027.
The latest Director Sentiment Index (DSI), a survey of business leaders led by the Australian Institute of Company Directors (AICD), found that housing concerns top the list of short-term issues that executives believe need solving, with 35 per cent ranking it the number one priority.
This marks a substantial rise in concerns compared to two years ago, when only 19 per cent of directors mentioned housing affordability and supply as a substantial issue in need of immediate attention.
When it came to top factors to address housing unaffordability, business directors differed from the real estate community at large in prioritising social and affordable housing over investment incentives.
The DSI found that 44 per cent of directors cited increased investment in public and/or social housing as a key factor in addressing the housing crisis, while the same percentage of directors emphasised the need to increase the availability of affordable housing.
Hot on its heels was reviews to zoning and planning regulations to support the development of diverse housing types, which garnered support from 38 per cent of directors.
Private investment was met with a more lukewarm response from business executives. Just 26 per cent of directors stated that increased investment in developing areas with housing potential was an important strategy in addressing the housing issue.
Promotion of higher density housing (24 per cent) and reforms to property tax to encourage investment (23 per cent) were met with a similarly tepid response.
However, business leaders were far more critical of moves to interrupt the flow of private property investment.
Just one-fifth of directors (21 per cent) suggested that cutting or limiting negative gearing and capital gains tax concessions had the potential to improve housing affordability.
Increased taxation on vacant properties, increased regulation of short-term rental accommodation, and government assistance for first home buyers were the least popular strategies, with less than one in five directors recommending these strategies.
On a broader scale, Australian directors were more optimistic about the nation’s economic future compared to last year, but cost of living and labour shortages remained major points of concern.
Mark Rigotti, managing director of the AICD, stated: “It’s been a difficult period to navigate and the way forward from here is not instantly clear.”
“The RBA holding interest rates steady for the moment has not been enough to ease cost pressures and there’s a level of uncertainty about which way things are headed,” Rigotti said.
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