Event: Interview with Matt Shirvington, Sunrise
Date: Thursday, 17 August 2023, 7.14am AEST
Speakers: Matt Shirvington, host Sunrise; Denita Wawn, CEO Master Builders Australia; Nerida Conisbee, chief economist Ray White
Topics: National Cabinet, housing supply
Matt Shirvington, host Sunrise: Well experts in the home building and property prices are divided this morning on the impact of a National Cabinet fix for Australia’s housing supply crisis. The country’s leaders agreed to a plan at yesterday’s meeting which includes a $3 billion new home bonus – incentives for the states to ease planning restrictions and the release of land to build a new target of 1.2 million homes over five years.
Anthony Albanese, Prime Minister: In short, upfront money to get housing moving quickly.
Matt: The agreed package includes improved renters’ rights and working towards a limit of one rent increase per year. Joining me now is Denita Wawn from Master Builders Association and the chief economist at Ray White Real Estate Nerida Conisbee. Good morning to you guys. Denita, I’ll start with you first off. Many in the industry weren’t convinced when the government announced a million new homes would be built. What about 1.2 million? Can that target be met within five years? It seems so quick.
Denita Wawn, chief executive Master Builders of Australia: It does Shirvo, but yes, we do think it can be achieved. The industry has the capacity but more importantly, it has to be achieved. We have a housing crisis in this country. We’ve got a massive shortage of all types of homes, and we need a game-changer and certainly, yesterday has set the pathway to seeking that change that we desperately need.
Matt: Nerida, nothing has worked to put a dent in property prices, and rents are now equally, 1.2 million new homes though? Would that affect property prices and rents?
Nerida Conisbee, chief economist Ray White: Yeah, look we know that the best solution to affordability is housing supply. If you get enough homes in the places where people want to live, then that does impact both prices and rent. So, the more we build, it is an uplift of what we typically build. Typically we see around 180,000-200,000 homes per annum coming in. So, it is around the 15-20 per cent boost on that. So, it will have an impact but very difficult to implement obviously.
Matt: Yeah, to be delivered. Denita, and just on that, there are so many stories of lack of tradies, of construction materials, where are we at with that? And the cost of building too plus on top of… it’s one thing to release land and build homes but then you need the critical infrastructure around it as well. Within five years it seems completely unimaginable.
Denita: Yeah, it’s a big task, but the industry is up for it. We’ve obviously seen a massive demand through covid for new homes, but that is dissipating pretty quickly. We’ve had a decline in building approvals over the last six months, and people do not have much work in their forward books. So, the capacity is just at the right time in terms of switching everything back on. But this can’t be seen in isolation. We’ve also got to make sure that we bring inflation down, building costs have skyrocketed by 20 to 30 per cent so we desperately need to get that down so we can get best bang for our buck. And then of course the other issue has been the increasing interest rates has meant that the private market has been weary in investing in homes. So, there are a number of components to this but the big game-changer has been on those supply constraints, and certainly, it’s been great to finally see all levels of government getting together and saying enough we need to do something and need to do something significant to move the dial.
Matt: Yeah, it’s that old saying, isn’t it? What is the new normal? We still haven’t quite found it yet. Denita, thank you. Nerida, thanks for your time.
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