- by Graham Holton
- The Guardian
- Issue #2074
Photo: rodtuk – flickr.com (CC BY-NC-SA 2.0)
According to A Blueprint to Tackle Queensland’s Housing Crisis, by Professor Hal Pawson of the University of New South Wales, since the outbreak of COVID, Brisbane rents have increased by more than 30 per cent. The resultant lack of affordable housing in Queensland has created a homelessness crisis, up by 22 per cent since 2018. In the Brisbane suburbs of Logan and Beaudesert and the Gold Coast, 10 per cent of households are homeless, or living in unaffordable housing. There are over 46,000 on the public housing waitlist. In regional Queensland, the increase is “even more dramatic”, up by 29 per cent in four years.
Within 20 years more than 220,000 households will need affordable housing. In the 2021-22 financial year homelessness services in regional and metropolitan Queensland combined, saw 12,739 per month. Queensland needs 11,000 affordable and social homes today, said Professor Pawson. The number of people with a “very high need” for social housing was 37 per cent higher than the system can accommodate.
Last year, the Qld Labor government promised an inadequate 13,000 social and affordable homes by 2027. Before 2017, “minimal” investment had been made by state and federal governments in affordable and social housing. The CEO of QCOSS, Aimee McVeigh, said, “There are about 300,000 Queenslanders currently experiencing housing insecurity. In Townsville alone there are over 4,000 people on the waitlist for housing.” In regards to domestic abuse, women are forced back to their abuser, “Because they have nowhere else to go, they will return to their partner.”
Housing Minister Leanne Enoch said the government’s $4 billion Housing Investment Fund was the “largest concentrated investment” in Queensland’s history, and housing was “at the top” of its policy agenda. “Over the past two years, we have provided almost 200,000 forms of housing assistance per year to Queensland households or individuals, including emergency housing, social housing, private market assistance and homelessness services.” Premier Annastacia Palaszczuk said she was concerned about housing stress and the government was looking at buying more than 5000 properties.
Local Government Association of Queensland, chief executive, Alison Smith, said that in March 2023, “there were 85,777 hectares of available land suitable for residential development and 29,086 hectares across southeast Queensland, which would open up 589,150 homes across the state, including 386,693 in southeast Queensland.” The problem is, according to John McCarthy of the website INQUEENSLAND (inqld.com.au), that although Queensland councils have approved 100,000 housing lots, they remain undeveloped because builders cannot find trained staff and the sudden high costs in building materials. The State government’s infrastructure drive has depleted the available trained labour pool. Developers and building companies are leaving Queensland for Sydney and Melbourne, where their profit margins are higher. The Director of National Property Research, Matt Gross, said the Palaszczuk Labor government was warned in 2016 of a coming severe labour shortage in the building sector, but little was done.
Rob Nicholls, a University of New South Wales construction industry regulation researcher, says that Australia needs a million new homes in the next five years. According to the National Housing Finance and Investment Corporation, there will be a shortage of 106,300 new homes over the next five years. The number of apartments and townhouses being built has fallen by 40 per cent in the past ten years.
The situation is worsened by the large number of building companies and developers that are going insolvent and bankrupt. The Australian Constructors Association (ACA) said building firms were entering administration at more than twice the rate of other industries, as profit margins have fallen to below 1 per cent and liquidity is down to less than 5 per cent. An ACA representative said, “over half of all large builders are now carrying current liabilities in excess of current assets – a technical definition of insolvency. The building industry is a textbook example of market failure.” Grant Warner, CEO of the Australian Institute of Quantity Surveyors said, “Electricity cost hikes and new building standards are adding further strain to an industry with rapidly shrinking margins.”
One of Australia’s largest home builders, Porter Davis, has collapsed and construction firm Lloyd Group has gone into voluntary administration. Porter Davis laid off 370 employees and has left more than 200 projects unfinished. Other builders such as ProBuild and PBS Building, have at least 3,000 projects uncompleted across Victoria, New South Wales, Queensland and the ACT. In July 2022 construction giant Metricon sacked 225 out of its 2,500 national work force in a restructure. In 2023 Queensland’s LDC Pty Ltd and Melbourne-based Hallbury Homes went into receivership, with LDC leaving 50 projects unfinished and owing creditors more than $7 million.
When a company goes bankrupt, subcontractors and contractors are “often left holding the baby.” People who paid money upfront to have their houses built are left with a shell of a house when the builder cannot finish the construction. Left to the elements the pine timber frame is soon affected by mould and structural damage, making the residence unliveable. The owners rely on insurance companies for compensation. A bankrupt builder can easily set up a new company devoid of any responsibility for previous losses.
The cost of key building materials has increased by more than 40 per cent since Covid, as supply chains became constrained and the cost of building materials shot up. Builders who signed fixed-price contracts with customers found it difficult to cover the rising cost of building materials and labour scarcity. Many builders kept signing on new customers asking for advanced payments. In residential single-dwelling constructions, building companies operated a construction Ponzi scheme in which the deposit from one customer paid for the supplies at another site, or paid old debts. In the last financial year, the Australian Securities and Investments Commission (ASIC) recorded 2213 failures in the construction industry sector across Australia, the most insolvencies of any industry. Rather than properly regulating the industry, state governments have reduced controls over the industry, because of neoliberalist policies, leaving the responsibility on the customer.
Soheil Abedian is a Persian-Australian property developer who has built thousands of homes across the Gold Coast. Abedian puts the construction industry’s woes down to “massive greed.” It is a product of “the capitalist system that we have in Australia and the Western world – that everybody would like to have more and more profit.”