The Real Estate Institute of Queensland (REIQ) has expressed strong support for the recent reestablishment of the Queensland Productivity Commission (QPC).
The passage of the Queensland Productivity Commission 2024 Bill in Parliament marks a pivotal move towards addressing the escalating construction costs and enhancing housing affordability in the state, REIQ said.
Highlighting the urgency of these measures, the rapid increase in the average home loan size, which has grown by over $198,000 in the past five years, starkly outstrips earnings growth. This disparity underscores the pressing need for effective interventions to make housing more affordable for Queenslanders.
With the QPC’s reinstatement, the path is now clear for setting up the commission formally and appointing its members.
Antonia Mercorella (pictured), CEO of REIQ, highlighted the critical role QPC is expected to play in boosting productivity within the construction sector – a sector that has witnessed a significant decline over the years.
“Improving productivity in the construction sector is critical for reducing construction costs and ultimately, improving housing affordability for Queenslanders,” Mercorella said.
She pointed to findings by the Australian Productivity Commission which showed a 12% decline in labour productivity in the sector since the mid-nineties, despite a 49% productivity increase across the broader economy.
Mercorella also noted that Queensland has experienced some of the steepest hikes in construction costs nationwide, with the Producer Price Index for house construction in Queensland soaring by 47% from December 2020 to December 2024. This rate surpasses the national average increase of 39%.
QPC’s focus will include investigating these cost drivers and exploring potential solutions to mitigate them, a development Mercorella describes as a “win for housing and the economy.”
Further emphasising the significance of the QPC’s work, REIQ pointed out that a considerable portion of housing costs can be attributed to taxes, regulatory costs, and infrastructure obligations.
The commission could play a crucial role in identifying and alleviating these financial burdens.
“The QPC could play an essential role in identifying and addressing additional costs imposed by taxes, duties, regulations, and constraints on housing supply,” Mercorella said.
REIQ remains optimistic about the potential for improved productivity to spur innovation within the sector, potentially leading to creative solutions for Queensland’s complex housing challenges.
The institute had previously emphasised the importance of focusing on productivity issues in their state election policy platform and views the commission’s revival as a positive step toward supporting a robust and sustainable housing industry for all Queenslanders.
The reestablishment of the QPC is seen not only as a mechanism to curb rising costs but also as a strategic move to secure economic stability and ensure the availability of affordable housing in Queensland.
