With the construction industry long being held up as an ideal mechanism for delivering economic stimulus in periods of economic recession and stagnation, this research assesses how the housing industry can help rebuild the Australian economy, both during and after the COVID-19 pandemic.

Key points:

• Stimulating the housing industry is an effective way of boosting an economic recovery. This research demonstrates that non-residential construction, followed by residential construction, and then infrastructure spending has the highest multiplier effect to those industry sectors hardest hit by the pandemic.
• Government stimulus measures directed at the housing industry have been largely demand side based, offering consumer incentives to build new dwellings with additional state level initiatives around social housing, planning and tax settings.
• There was widespread support for the Australian Government and state/territory government demand side stimulus measures from the 25 industry stakeholders interviewed during this research. Cash grants increased new land and house sales significantly in Western Australia (WA) and South Australia (SA), which will feed through into new building work, sustaining jobs.
• In terms of an overall economic stimulus, the various stimulus programs are too small to have a big impact. The level of stimulus funding is insufficient to create new employment on a large-scale and therefore provide a major boost to the economic recovery.