Interview with Keiran Gilbert, Sky News

Event: Interview with Keiran Gilbert, Sky News
Date: 30 July 2024, 1.45pm AEST
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: Building approvals, dwindling investment, building times 

E&OE 

Kieran Gilbert, Sky News: Welcome back to the program. Concerning new building approval numbers out today. I’m joined by Master Builders Australia chief executive Denita Wawn. Denita, great to see you as always. Total dwellings approved in June down 6.5 per cent. This is pretty much bang on what you’d been forecasting.  

 Denita Wawn, CEO Master Builders Australia: Yeah, it is on par, about 163,000 homes built over 12 months, which is on par with what we’ve forecast. But, remembering that we’ve just started the first of five years of building targets that will require us to build 240,000 homes a year. So, if we’re trying to achieve that aim, we’ve got to somehow have an extra 80,000 this financial year on top of what we built. So, 240,000 is the target. Well short. And so, we’ve really got to focus on why supply is so constrained. 

 Kieran: Is this all about interest rates right now? 

 Denita: It’s about a lot of things. It’s about inflation being high. Building costs are nearly 40 per cent more than what they were pre-COVID. And when you combine that with the interest rate instability, people are just not willing to invest. There’s a huge demand out there, but it’s latent demand. It’s not being realised because people are concerned about investing in building at the moment. And we’ve got to the stage now where some builders are telling me they haven’t got much in their forward books, because private homeowners and so forth are just not willing to spend money at the moment on housing. 

 Kieran: And so if rates did go up next week, we got the CPI out tomorrow, this crucial economic data that we’re all waiting for, if rates go up again, what sort of impact does it have on your sector? 

 Denita: Well, we think it’s going to curtail spending even further in housing. So, demand will dwindle even further, even though we need these homes and people want these homes. They’re not going to spend money when we’re seeing high inflation and increasing interest rates. The economics is just not right at the moment to ensure that private investment in housing, whether it’s detached homes right through to high rise residential, is actually going to be realised because of the economic conditions at the moment.  

 Kieran: And as you say, you touched on both detached homes and apartments, the numbers are falling on both fronts. And not only are the costs up, the delays are up. Say if you’re talking about a high-rise apartment, the delay – the delays are huge. How much do you put that down to the CFMEU in the construction sector causing problems?  

 Denita: Certainly it is a component of it. We’re seeing now high rise, usually would take two years, it’s now averaging three years for a high rise development. That’s simply not good enough. We commend what the government is doing in terms of applying for an administrator to clean up the CFMEU Construction Division. They are adding a significant delay in the time it takes and price as well. And so that is a component of why we’ve seen such an escalation of costs.   

Kieran: Denita Wawn, chief executive of the Master Builders, great to see you as always. Thanks. 

Denita: Thank you. 

Media contact:
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071
dee.zegarac@masterbuilders.com.au