Interview with Laura Jayes, Sky News

Event: Interview with Laura Jayes, Sky News
Date: 19 February 2024, 10.20am AEDT
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: Housing supply; building costs; labour shortages

E&OE

Laura Jayes, host Sky News: Welcome back the construction of new houses is at the core of the Federal Government’s plan to tackle the housing crisis. But the growing cost of building a new home is deterring Australians from doing so, putting the government’s housing target at risk. Joining me now is Master Builders Australia chief executive. Denita Wawn. Denita, I feel like we’ve spoken about this before, but yet another article today, more data that shows the cost of building a home is going up, just $60,000 in the last year.

Denita Wawn, CEO Master Builders Australia: Absolutely. And in fact, if you look at the comparison pre and post COVID, cost of housing, construction has gone up by nearly 40 per cent. This is massive and when you combine that with the escalation of interest rates over the last 18 months, it’s really deterring so many people into buying a new home, constructing a new home, and that is got a significant impact on supply.

Laura: So what, where’s this $60,000 come from? Can we still blame supply chain issues or is a lot of government red tape starting to add up?

Denita: It’s a combination of three things. One is in terms of labour. We’ve still got a massive labour shortage and cost of tradies is simply deterring from that, impacting that issue. We still have materials, but prices have gone up by around about 35 per cent over the last four years. They’ve gone down a little bit since COVID, but not enough. And of course, red tape, massive delays mean costs and taxes contribute nearly 40 per cent of the cost of building a home. So that is why we’ve got to tackle all of these things to resolve the issues before we can actually touch the sides of building a million homes.

Laura: Denita, is there any sign that any government state, federal, council want to give up any of these taxes to make building homes more affordable?

Denita: Well, we’ve heard a lot of things but yet to see some really concrete action. The national cabinet agreed in August of last year that they would focus on supply. We’re seeing a few bits and pieces, but nothing significant, and certainly we are of the view that the clock will start ticking on 1 July for that million homes under the Accord and governments have got to get on with it.

Laura: Yeah, absolutely. I mean, the Building Commissioner has been focused on some of these Opal Tower-esque problems, right? We get that. You can’t have dodgy builders building really bad buildings that need to be essentially torn down or are unlivable just years after they’re built. But has the the balance tipped too far iIn the other direction? I note builders are still complaining about how bad the planning portal is, getting construction certificates so people can actually move into these homes is all ridiculous. Is that the feedback that you’re still getting?

Denita: Absolutely, and it’s Australia-wide. We hear constantly from builders, the delays in getting development applications, building applications, occupancy certificates, the list goes on. As well as all the taxes that attribute to that. Taking up your point, it’s absolutely incredibly important that we get people that don’t comply with building out of the system. Nevertheless, that is not the focus. The focus is on delays, taxes, lack of build-ready land. The list goes on. It’s all contributing to the cost of building a home.

Laura: You must want to tear your hair out some days. Do you Denita?

Denita: I think it’s why I’ve gone grey, but certainly it is exceptionally frustrating. I’ve been in this job now for eight years, been talking about the same thing for eight years, and the situation just gets worse. So I’m here in Gladstone today to appear before a Senate inquiry on cost of living. Housing will be the issue and we will continue ad nauseam to spread the message, governments have got to resolve these supply constraints. We can’t focus on demand. We’ve gotta focus on supply.

Laura: Also immigration. I mean, where do you sit? Where does Master Builders sit on immigration? Because obviously it needs to be limited so that there isn’t this massive pressure on the housing market, but we also need skilled migrants to help build the homes. So what’s the balance?

Denita: The balance is we need skilled people in the right jobs.

Laura: Is that happening?

Denita: No, it’s starting to. The government put in their skilled migration review at the end of last year. We’re starting to see some results. We thought that they missed the opportunity to really fast-track tradies into the country. We’re in ongoing discussions with them in that regard. But we’ve estimated we need nearly 500,000 new entrants into our sector over the next five years. And that is immigration but it’s also about apprenticeships. And apprentice numbers are declining, not increasing, and that’s not a good sign either.

Laura: No, missed opportunity. Very diplomatic of you. Look forward to hearing you at this inquiry in Gladstone today. Thanks so much.

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