This research assesses how the housing industry can help rebuild the Australian economy both during and after the COVID-19 pandemic.

The construction industry has long been held up as an ideal mechanism for delivering economic stimulus in periods of economic recession and stagnation. A National Housing Finance and Investment Corporation (NHFIC) report shows that housing construction generates the second largest economic multiplier of all industries within the Australian economy, and that every $1 million injected into the residential building industry returns $2.9 million in GDP.  This means government spending on construction or infrastructure projects leads to an increase in economic output several times the size of the initial spend.

A number of respondents suggested government could switch its attention from stimulating market demand to direct funding of social housing while others wanted to see both a demand and supply side approach as a stimulus package.

If the house building industry is to have the chance to rebuild Australia after the pandemic, the level of intervention would need to be much greater, returning dwelling commencement activity to the sort of levels seen in most states in 2018. In 2018–19, there were around 200,000 dwelling commencements across the country; forecasts for 2020–21 are around 70,000 units lower. Therefore, to stimulate the housing industry to deliver the 2018–19 level of commencements would require an intervention far greater than HomeBuilder, targeted at both the multi-residential and detached sector, coupled with at least 30,000 units delivered directly by government.