Greens call on federal government to create a public property developer

The Greens have called for the creation of a government-funded property developer that it estimates could build 360,000 homes over the next five years to address Australia’s housing crisis.  

Under the plan, the public property developer would build homes and sell and rent them for below market prices, competing with private property developers.  

An average renter could save $5,200 a year on rent, reflecting a 19% discount on market rent, according to Parliamentary Budget Office (PBO) analysis.  

An average first-home buyer could save $260,000, compared with average market prices, the PBO analysis showed.  

But the plan was said to cost the budget an additional $27.9 billion over the decade after the sale of the homes built and the inclusion of the income from the rental homes.

The cost of land and building materials were said to be off budget but would increase the government’s balance sheet by $285 billion over 10 years. 

Greens spokesperson for Housing and Homelessness Max Chandler-Mather announced the plan at the National Press Club on Wednesday, marking the party’s first election policy ahead of the next election.  

The Australian Greens want to create a government-funded property developer to build homes and sell or rent them for below-market prices. Picture: Getty

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“The Greens will scrap the tax handouts for property investors and invest billions in building hundreds of thousands of good quality homes to be sold and rented at prices people can actually afford,” Mr Chandler-Mather will say today.  

The Greens would allocate 30% of the new homes for home buyers to purchase and 70% would be available to rent.  

Could a public property developer work? 

The calls on the federal government to get directly into the home building business and compete with private developers comes as new home building has struggled in recent years.

Greens MP and housing spokesperson Max Chandler-Mather announced the new election policy on Wednesday in Canberra. Picture: Getty

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PropTrack director of economic research Cameron Kusher said the proposal was an interesting idea, but it would be a big budget cost and could be difficult to deliver.  

“I think there’s potentially a place for the government to be more hands on in the development process,” he said.  

“After World War II, there was a big push by government to build homes for Australia and that’s when our home ownership rate got to the highest it’s ever been. 

“Right now, housing affordability is a challenge, but I also don’t think it’s as easy as it’s being made out to be.”

Under the plan, the federal government would procure the land and then work with state, territory and local governments on the proposals to get new home building going.  

But Mr Kusher said private property developers were facing challenges in getting projects approved and construction going, and the federal government could face similar challenges.  

“One of the benefits of the federal government funding and developing new housing is that in times like now when material costs are very high and it’s hard for developers to stack up new development, the government could step up and build during those periods,” he said. 

“The government could also finance a lot cheaper than a private sector developer can.” 

Mr Kusher pointed to Singapore, where the government had built a lot of housing and had been able to ride out the economic cycles better than the private sector had.  

“It’s going to be a big budget cost for the government, so the questions are whether it is affordable and how efficient could it be?” he noted.  

“The government has committed to building 1.2 million homes over the next five years and it’s looking very unlikely that that is going to happen as things are, so they need to be considering other options to help them achieve that. 

“I don’t think this is the answer, but it certainly could help.”  

PropTrack director of economic research Cameron Kusher says the proposal is an interesting idea, but would be a big budget cost and could be difficult to deliver. Picture: Supplied

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Greens focus on housing ahead of next federal election

The Australian Greens have been fighting the federal government on housing, calling on the government to do more to address the housing crisis. 

The Greens are currently blocking the government’s Help to Buy scheme in exchange for changes to negative gearing and capital gains tax benefits for property investors.  

The government’s Help to Buy scheme would help homebuyers with deposits as low as 2% get a foot on the property ladder by providing an equity contribution of up to 40% for new homes and 30% for existing homes. 

The party previously held up the $10 billion Housing Australia Future Fund last year, but eventually struck a deal after extracting more funding for housing infrastructure. 

It comes as the Greens’ Dunkley candidate Alex Breskin recorded a swing against the party at the Dunkley by-election over the weekend, down to 6.3% from 10.3% in 2022. 

A date for the next federal election has yet to be called but must be held before the end of 2025.