The Productivity Commission released its interim report on housing supply regulation in late July this year. The report has emphasised that Australia’s housing affordability crisis is being worsened by regulations that restrict the construction of homes in areas where demand is highest. While regulation is necessary for safety, quality, and liveability, the report finds that excessive or poorly designed rules around housing are limiting supply, increasing costs, and slowing development.
The report highlights two primary reform priorities:
- Relaxing land-use controls — such as allowing more medium-density housing, reducing minimum lot sizes, enabling mixed-use development, and permitting more apartments in high-demand areas.
- Better coordinating infrastructure with housing development — ensuring roads, utilities, and sewerage are planned and funded alongside land release so rezoned land can actually be developed.
The report also found that slow, complex approval processes are delaying projects and adding costs, often because multiple agencies and levels of government are poorly coordinated. To address this, the Productivity Commission points to faster pathways for simple developments, stronger coordination bodies, better technology, and more transparent reporting.
Overall, the report proposes four principles for a better housing regulatory system: Adopt a build mindset, regulate only where necessary, coordinate housing with infrastructure, and keep processes simple.
The report is interim and seeks feedback before the final report is delivered in March 2027. Click here to have your say.
Summary based on:
https://www.pc.gov.au/inquiries-and-research/housing-supply/interim/
