Federal Budget 2022: Inside Labor’s plan to build 1 million new affordable homes

At a time when rent prices are boiling over and homebuyers are being priced out of the areas they work in, Labor’s Federal Budget for 2022-23 provides a modicum of hope for the future of affordable housing.

The government’s goal of delivering one million well-located, energy-efficient and affordable homes is slated to take five years to come to fruition, with the first act delayed until mid-2024 as a booster-shot for when the construction sector is expected to dry up. 

If it sounds a little high-reaching to you, you’re not alone. 

The government itself admitted they’ve drawn a “big, ambitious target”, with treasurer Jim Chalmers labelling it an aspiration. But they aren’t tackling the housing problem alone. 

Let’s take a closer look following the release of the 2022 Federal Budget.

"Supply hasn’t kept up with demand, which means too many struggle to live close to where they work, too many are stuck on waiting lists for social housing, and for too many, the great Australian dream of homeownership seems completely out of reach."

Confronting the housing problem with the private sector

In his speech to parliament, Jim Chalmers spoke of a budget that “does more to confront Australia’s housing problem,” not just for those wishing to get a foot on the property ladder, but for renters and those in need of social housing.  

“Supply hasn’t kept up with demand, which means too many struggle to live close to where they work, too many are stuck on waiting lists for social housing, and for too many, the great Australian dream of homeownership seems completely out of reach,” he said. 

The ‘Australian dream’, according to the government, will be realised with the help of state and territory governments, investors, and industry. In particular, the government will be relying on superannuation funds that have long been “hungry” for stable, long-term investments.

The Housing Accord aims to address the issue of lacklustre institutional housing investment in Australia.  

“Australia is facing acute housing pressures and too many Australians do not have access to affordable housing,” the budget documents read.

“At the same time Australia has a low level of institutional housing investment and the world’s third largest pool of capital in our superannuation system which is hungry for investments that will deliver stable returns over the long term.” 

The government suggests that with ongoing funding it can cover the gap between market rents and subsidised rents to make more projects commercially viable for investors.

A “kickstart” to construction with up to 20,000 new homes 

But the onus won’t just be on the private-sector, with Chalmers saying the government  intends “to play a leading role by coordinating and kickstarting the investment that we know needs to happen.

“To get the Accord started, this budget commits an additional $350 million in funding for another 10,000 new, affordable homes on top of our existing commitments,” he said.

State and territory governments also have a part to play in the Housing Accord, signing-up to build up to 10,000 additional new homes out of their own coffers, bringing the total to 20,000. 

“Under the Accord, state and territory governments will undertake expedited zoning, planning and land release to deliver on a joint commitment to improve the availability of social and affordable housing in well-located areas, including looking for immediate opportunities to free up well-located state land,” budget documents read. 

The government’s Housing Accord is all about ensuring “an adequate supply of affordable housing where it is needed – close to jobs, transport, and other services,” Chalmers said. 

Before the May election, Labor ran on a promise to build 30,000 new social and affordable homes as part of the $10 billion Housing Australia Future Fund, which it says has not been forgotten.

If you’re looking to buy a property and need a home loan, we do the hard yards for you by comparing the leading loans on the market. Start your ownership journey right here.