Call to knock down eight million houses to solve housing affordability crisis

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on November 04, 2021 Fact Checked
Call to knock down eight million houses to solve housing affordability crisis

Knocking down one standard house could leave room to build three new, energy-efficient ones according to a new report.

Almost eight million houses are 'well past their use by date', but tearing them down could solve two birds with one stone - housing affordability and Australia's net-zero emissions target.

By knocking down one house on a 800 to 1,000 square metre block, there's room to build up to three new, energy-efficient homes according to new research by Powerhousing Australia and CoreLogic.

The report found that the eight million homes, most of which were found to be over 30 years old, contribute up to 18% of the country's emissions.

Before 2003, new homes didn't need to meet the mandatory four-star Nathers energy rating. This meant the energy-efficiency of a home was a "lottery" most people would lose.

The 'vast majority' of Australian housing stock was built before 2003, and cannot be made to meet the National Construction Code by 2050 - a 'real liability' for hitting the 2050 emission commitment.

Powerhousing Australia chief executive Nicholas Proud said that the cost of old housing stock is adding up to a personal and national level.

"The twin climate and Covid-19 crises have reinforced the unsuitability of Australia’s 30-year-old-plus housing stock on lower income families and younger Australians, who are disproportionately living in lower-energy-rated homes that impact financially and unnerves well-being," Mr Proud said.

"Countless Australians are only too aware after months in lockdown that average dwellings are cold in winter, hot in summer and prohibitively expensive to cool and heat."

But by scrapping the old and rebuilding with new builds, there's more stock available for keen home buyers that will help meet Australia's 2050 emissions target.

New homes could solve 'worsening' housing affordability crisis

Housing affordability is 'at its worst' in five years according to a recent report by Bluestone, as house prices continue to surge and rents spike at the fastest rate since 2008.

A report by the Grattan Institute suggested that building new housing stock was the answer to solving housing affordability, pointing to a 'lack' of new housing versus Australia's growing population.

According to the Grattan Institute's report, building an extra 50,000 houses each year for 10 years could reduce the cost to buy and the cost to rent by up to 20%.

"Increasing housing supply will only restore housing affordability slowly," the report said.

"But without a concerted effort to boost housing supply in Australia, housing affordability will likely get worse."

Australia is currently on track to surpass three million rooftop solar installations according to Australia's Clean Energy Regulator. 

Prime Minister Scott Morrison said that Australia has one of the best rates of rooftop solar in the world, and that technology is the answer to tackling climate change.

"Technology will have the answers to a decarbonised economy, particularly over time," Mr Morrison said in Glasgow on Monday.

"And [it can] achieve it in a way that does not deny our citizens, especially in developing economies, their livelihoods or the opportunity for a better quality of life."


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Rates correct as of November 27, 2021. View disclaimer.


Image by Rumman Amin on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

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Rachel is a Finance Journalist, and joined Savings in 2021. Coming from a background in the FinTech space, her interests include the innovation of lending technology, property, investing, and more. With a passion for educating and informing people about their finances, she hopes to increase the financial literacy of everyday Australians.

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