$5.3b Victorian construction stimulus to kickstart CHP led COVID recovery

The $5.3b Victorian social housing stimulus will eclipse any programs in recent history to arrest the decline in purpose built social and affordable housing with Community Housing Providers partnering with the private sector for social outcome, bolster jobs and drive the COVID recovery.

Our Victorian Members are ecstatic with the announcement that after having been through the toughest of 2020 COVID lockdowns, there is great hope for real housing outcomes for the growing numbers in the most challenging situations of housing depravity through to help many Australians who have never needed this assistance before.

Pre-COVID-19 there was 200,000 on the social housing waiting list and with wider job losses still expected there is no doubt that more social and affordable housing is needed. This unprecedented state government commitment to tackle this crisis with Community Housing to play a central role.

PowerHousing Members, who manage or own over 70,000 homes nationally, have seen growth in people seeking social and affordable rentals over the COVID crisis but the demand swells beyond the supply, but this will finally change that in Victoria by way of this landmark social and economic effort.

With increasing job losses, a 300,000 decline in Net Overseas Migration, the country now in recession, and cyclical downturn, this new housing activity will actually secure many trades jobs which would be at risk as housing activity is still expected to contract in these conditions in mid-2021.

Two of Australia’s largest builders, Simonds Homes and Metricon, along with smaller builders estimated for PowerHousing that around 43 trades and sub-trades such as carpenters, plumbers and sparkies receive work from every new house. This means that for all of these 12,000 new social and affordable homes built there will be over half a million work engagements for these trades.

The timing of this announcement is about right, as even before COVID, housing supply was already sliding down its deepest activity decline in residential housing starts in history, this will put a stop to that in Victoria to create this new pipeline from early 2021 to underpins those jobs.

In terms of timing, homes take 6-24 months to come out of the ground and this means that jobs and new housing outcomes will come online from mid to late 2021, to bridge the time when the housing market is expected to see the hit of cyclical downturn, lower migration demand and the real actual recessionary impacts.  There is an irony, that the homes that are built will actually safeguard many of these tradies from potentially needing social and affordable housing support themselves.

As further detail is announced in the Victorian budget, a similar program for the NSW Government to be announced this week and Tasmania already taking this path, there is no doubt that this will be a Community Housing Provider led COVID recovery with more Government investment to come.