Event: Denita Wawn interview with Peter Stefanovic, Sky News First Edition
Date: Monday 3 April 2023, 8.10am AEST
Speakers: Peter Stefanovic, host Sky News First Edition; Denita Wawn, CEO Master Builders Australia
Topics: housing supply, inflation, Housing Future Fund, Housing Accord, labour market, NHFIC, insolvencies
Peter Stefanovic, host Sky News First Edition: Let’s go live now to Denita Wawn from the Master Builders Association. This is off the back of one of our top stories this morning. Denita, good to see you by the way. A new report showing 100,000 fewer homes to be built over the next five years. Is that your expectation?
Denita Wawn, CEO Master Builders Australia: It is, Pete, and it’s consistent with our forecasts that we are going to fall incredibly short of the 200,000 homes we need to build every year for the next five years to meet population demand. So, it puts into stark numbers that we do indeed have a housing crisis in this country.
Peter: So why so few then?
Denita: It’s a combination of factors, Pete. There’s short-term issues relating to material costs, inflation, supply shortages of labour, and interest rates that have all culminated into a sudden decline in private investment in housing. Particularly from investors and owner-operators. But equally, there are more longer-term sustainable issues that we need to urgently address and that is in relation to planning and development, it relates to titled land, and it relates to developer costs. So, we are encouraging, in fact, imploring the federal government to put some pressure on the state and territory governments through that Housing Accord that they signed last year. The states and territories are in the middle of all of this. They need to show some leadership and get sorted the planning and land titling issues that we know that is really holding back housing supply in this country.
Peter: Would the government’s Housing Future Fund at all help, Denita?
Denita: It’s a start but it’s really focused on social and affordable housing. It is good that they’ve done it. But the issue is much, much bigger than that. We know that we are having a housing crisis in this country simply because we cannot get enough titled land because we can’t build medium-density and high-rise density homes in those middle rings of suburban Australia. We need to really think hard about what we use our land for, particularly in the cities. But also encouraging regionalisation. We are seeing a growth in population in the regions, we also need to help them as well in terms of their housing needs.
Peter: Okay. This on the same time where you’ve got some stats out this morning in The Australian suggesting 1,500 building firms have failed since June 30. I mean, are they failing at a rate that is more rapid than usual, and is it also down to those factors that you already suggested?
Denita: It’s about on average but certainly, there are some larger ones that is unfortunately expected. We always have insolvencies during peak periods rather than down-cycle. And so, as a consequence, we are seeing it. But it is on average over the last ten years, the numbers we are seeing. But it is in a factor of those fixed-price contracts that people signed pre-inflation and then, of course, a downturn in new homes which means they’ve got massive cashflow issues to deal with at the moment.
Peter: And just finally, we saw those numbers last week about migration, Denita. Some 650,000 migrants who will call Australia home not just financial year but next financial year as well. That is as a total. How is that going to shake up the housing market as well? It’s going to become more scare, surely?
Denita: It will. Certainly, the NHFIC figures that they released today does take into account population increases, but they themselves recognise that these conservative figures, it is going to put more pressure. But interestingly enough, we need a lot of those migrants to building and construction trade workers. We’ve got massive shortages in this country at the moment. So it’s a chicken and egg situation, unfortunately.
Peter: So, you prefer those higher numbers for migrants, primarily, to help out the build?
Denita: That’s absolutely right.
Peter: Okay. Denita Wawn, appreciate it. Thanks for your time as always.
Denita: Thanks Pete.
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