Prime Minister Kevin Rudd says Australia needs one million new homes over the next six years to keep up with estimated population growth.
Mr Rudd spoke today at a Housing Industry Association (HIA) conference, where he also released a paper detailing his Government's new rental affordability scheme.
"Based on these numbers from the HIA, over the next six years or so this country is going to have to build an additional one million new homes,'' Mr Rudd said.
"It won't solve housing affordability, but it will make something of a difference.''
Mr Rudd said Australia was in a housing deficit which had led to rising house prices and an increasingly tight rental market.
"In the last 12 years, the median house price in Australia has risen by 200 per cent,'' he said.
"Home ownership for many these days is as much stress as it is security.''
Mr Rudd released the National Rental Affordability Scheme (NRAS) technical discussion paper, which is now available for public comment.
The scheme offers payment or tax offsets to property owners who lease out new homes at 20 per cent below market rates.
It only applies to new properties, to encourage the construction of new and cheaper homes for rent.
Participating landlords would receive a $6000 federal grant or tax offset plus a $2,000 State Government contribution every year for 10 years.
The paper says the scheme would aim to provide funding for 50,000 homes between now and June 2012.
Mr Rudd also announced the make-up of his National Housing Supply Council, a key advisory group which will provide its first "State of Supply" report to government in January.
"We are establishing this body in recognition of the simple fact that Australia cannot address housing affordability without building more houses," Mr Rudd said.
"The truth is that no one has been asking the question of how many houses we need, of what kind, and in which locations, for over a decade."
Dr Owen Donald was announced last week as council chair.
Mr Rudd said he would be joined by former Australand managing director Brendan Crotty, Wilson Homes managing director and HIA board member Stuart Wilson, and HIA policy chief executive Chris Lamont.
Further council members will be ANZ chief economist Saul Eslake, former Planning NSW director general Sue Holliday, SGS Economics director Marcus Spiller, WA urban development coordinator Marion Thompson and University of Sydney associate professor Judy Yates.
