Today's inflation figures released by the Australia Bureau of Statistics has confirmed rising cost pressures in housing with urgent policy action needed says Master Builders Australia CEO Denita Wawn.
Inflation accelerated to 7.3 per cent during November, meaning that prices are now rising at their fastest pace since 1990.
"However, while monetary policy using interest rate rises is starting to show fruits in putting downward pressure on the demand side, more needs to be done to tackle the supply side bottlenecks relating to material, labour and housing supply.
"We acknowledge that the RBA has a difficult balancing approach to take in curbing inflation but at the same time not getting too ahead of the realised impact of their decisions.
"However, the most sustainable solution to the inflationary problem lies on the supply side, through bringing down the cost of doing business. The requires issues like labour shortages, materials costs and the regulatory burden to be dealt with in a focussed and urgent manner," said Ms Wawn.
Over the year to November, the cost of buying a newly-built home rose by 17.9 per cent.
"Housing continues to be the inflationary canary in the coal mine with figures reflecting huge increases in the cost of building materials, as well as continued shortages of key construction trade workers," said Ms Wawn.
Rents are also accelerating and are up to 3.6 per cent over the past year.
"Growing pressures in the rental market are being exacerbated by persistently low building volumes in the higher density part of the housing market.
"Labour shortages can best be addressed over the short and medium term by making it easier for migrants to work in Australia. The bottlenecks in our migration system need to be addressed as a matter of priority.
"The continued ramping up of the regulatory burden on our industry is making it much more costly for building businesses to do their work, contributing to housing inflation," said Ms Wawn.
