Housing Shortage + Affordability + Migration = A Perfect Storm

Published 14 June 2023

The May 2023 Federal Budget announcement referenced “Build To Rent Housing Affordability Solutions” – increasing the rate for capital works tax deduction (depreciation) from 2.5% to 4% per annum (same as hotels); and reducing the final withholding tax rate on eligible fund payments from MIT investment from 30% to 15%. Land tax and stamp duty surcharge exemptions remain applicable.  

The Commonwealth Bank recently predicted that the migrant intake change over the previous year will be circa $418,500 individuals, with the majority settling along the Eastern Seaboard (NSW, VIC, QLD).  

Reality realises that the current housing shortage is sitting at around 26,800 dwellings per year.  

The average Sydney house price sits at around $1.4m (as at March 2022) – a combined income of approximately $255,000 per annum is required to finance the loan, far from the reach of many Australians.  

The latest NSW Government Policy is encouraging townhouse / apartment unit development on the basis of affordability, with a median price sitting at around $800,000. To support this strategy the following options are being promoted:  

1. Invest in affordable housing options such as multi-level apartment units.  

2. Foreign super fund investment into “build to rent” portfolios.  

3. A combination of the above.  

The logical approach would be to give priority to townhouse and apartment unit development, commonly referred to as Class 2 buildings under the Australian National Construction Code.  

                                                                                       Dincel Built Sydney Apartment Block  

The More Things Change The More They Stay The Same

To stave off the housing affordability crisis the viability of Class 2 buildings can only be achieved by increasing productivity and reducing cost and construction time. Project productivity cannot be increased with the use of conventional materials requiring high labour skills.  

Just over a decade ago I authored a document titled "Cost Comparison - Dincel vs. AAC Walls". Applicable then and perhaps even more so now, if the subject is cost/time and the achievement of maximum CO2 reduction, you will find no better solution to apartment construction than using a loadbearing wall system.  

Dincel has proven time and again that the construction cost of an apartment unit can be reduced by 30% and construction time reduced by 50%, as confirmed and supported by various testimonials produced throughout the years.  

Further an Embodied Energy Study endorsed by Swinburne University concludes Dincel load bearing system energy efficiency is 214 times more efficient than a building wall insulation system.

    

                                                                                       Dincel Built Sydney Apartment Block  

Building Construction Productivity

Over the last two years Dincel has established a series of initiatives aligned with our commitment to solving the industry’s problematic issues: 

1. The Dincel Academy

A free and comprehensive training syllabus educating users on correct practices for installing Dincel wall. To date, more than 800 construction industry professionals, builders and installers across Australia have attended The Dincel Academy.

2. On-Site Installation Auditing and ITP

A dedicated team of Installation Service Managers has been assembled to provide installation assistance and documented auditing services, including a 31-point On-Site Checklist and a fully customisable Inspection Test Plan (ITP) for installers to follow.  

3.Void Free Warranty / Self-Compacting Concrete (SCC)

Self-Compacting Concrete has been endorsed to ensure a void free wall and to eliminate the need to vibrate.  

4.Waterproof System Warranty

The research, design, development and manufacture of the Dincel waterproof system has culminated in Dincel offering up to 50 years zero (0) leak basement wall waterproof warranty.  

Additionally, the use of Dincel wall for your housing constructions affords the following zone benefits:   

Flood Zones

• “Waterproof Dincel eliminates replacement costs in flood inundated buildings.”  

• Conventional buildings containing porous material are demolished after a flood event due to mould, not because of structural damage. The Dincel solution should therefore eliminate exorbitant insurance premiums and potential open flood prone land for development.”  

For more information refer to the Dincel Flood Recoverable Buildings document.  

Mine Subsidence Zones

Tests conducted at the University of Technology Sydney (UTS) – refer documents at Earthquake and Structural Topics - found that Dincel Walls can withstand up to 9.0 magnitude earthquake forces. These tests prove that Dincel Wall is three times more ductile stronger in comparison to a conventional concrete wall of the same thickness and cannot crack due to temperature of foundation settlements. As a result, development potential by number of floors can be increased even in mine subsidence areas.  

Bushfire Zones

CSIRO Assessment Report on the use of Dincel within bushfire (including BAL-FZ) zones.  

                                                                                       Dincel Built Sydney Apartment Block  

THE NEXT LEVEL.

When you combine the current housing shortage crisis, the lack of experienced trades, material supply shortage, the cost of raw materials and the strain the upcoming migration influx will place on the Australian market, can you afford to stick to conventional build methods?