Event: Interview with Thomas Oriti, ABC NewsRadio
Date: Thursday, 17 August 2023, 8.30am AEST
Speakers: Thomas Oriti, host ABC NewsRadio; Denita Wawn, CEO Master Builders Australia
Topics: National Cabinet, housing supply
Thomas Oriti, host ABC NewsRadio: Good morning. Housing first this half hour. Australia is set to build 1.2 million new homes in the space of five years as part of a new plan aimed at tackling the nation’s housing crisis. It’s a goal that was agreed to at that National Cabinet meeting between the Prime Minister and state and territory leaders yesterday. They also agreed to move towards national consistency when it comes to limiting rent increases to once per year and requiring reasonable grounds for evictions. Joining us now for her thoughts is Denita Wawn the CEO of Master Builders Australia. Good morning Denita.
Denita Wawn, chief executive Master Builders of Australia: Good morning.
Thomas: Is it possible then? We’ve got that goal now. Worth noting just to put it into perspective, I think that’s an increase of 200,000. 1.2 million new homes in the space of five years now. Is it possible to build that many homes in five years?
Denita: Well, we think so and more importantly we have to. We have a housing crisis in this country at the moment and if we don’t hit 200,000 homes each year for the next five years, we will still be in significant problem territory. The fact that it has been boosted up to another 200,000 we think is a significant game-changer. This now provides the incentive that we’ve been seeking from the federal government to put significant pressure on the state and territory governments to get their houses in order, excuse the pun, around planning and developer charges and so forth that has been restricting housing supply.
Thomas: I will ask you about that in a moment but yeah if we can, you say it’s possible, 1.2 million in five years. If we can build that many houses, has the horse bolted here or will it be enough to ease the housing crisis? A lot of people might argue not even that’s enough.
Denita: Well we’ve got to be cognisant of the fact that we’ve got a significant migration boost and population boost overall over the next five years. That figure includes the migration numbers that we were expecting and it’s good to see an additional announcement yesterday that identifies the importance of tracking housing and migration. But the simple fact is that we’ve left the issue around supply for too long. We have been advocating for well over five years now that supply constraints have to be tackled, that the Federal Government had to lean in, and we’re now seeing the Albanese government do as we have been recommending for over five years; that simply the federal government needed to step in, provide some incentives and really hold the state and territory governments to account in getting these changes through once and for all.
Thomas: You mentioned issues a moment ago around planning and that sort of thing so let me ask you about that. I mean, how in your view did we get into this position of having such a massive undersupply of homes?
Denita: Well the simple fact has been that we’ve had significant supply constraints. They each have been recognised as far back as the Henry Tax Review in the 2000s that we needed to fix the supply problems which are all about planning, restrictions, and looking at going up as well as going out. Significant delays in building approvals at the moment. The delays have nearly doubled if not tripled over the last few years that curtail investment. And likewise, we’ve seen a significant increase in developer charges that in many instances just simply make investment inviable. So, it’s a situation on which we need to resolve those issues, encourage more investors into the market and ensure that when investment is made then those approvals are dealt with as quickly as possible. So, some simple stuff but things that have been building up for the last 10 years and now we hope that they are going to be resolved.
Thomas: Yeah, encouraging more investors into the market. I want to pick up on that because we had Max Chandler-Mather from the Greens on about an hour ago on the program and there’s this ongoing talk about rent, caps on rent, rent freezes, that sort of thing and that really has become part of, I guess, politics around this with the Government trying to pass this Bill. Do you have a view on that idea from the Greens? Would that have an impact on supply as some people are suggesting?
Denita: Absolutely. A cap on rents simply means that investors, whether they are mum and dad investors right through to institutional investors, will not invest. It just does not enable them to factor in accounts in terms of the cost of investing and it would actually result in a further undersupply rather than resolving the short fix now. So we think that the balance of yesterday was right. Increases just once a year and that enables certainty for renters but at the same time certainty for investors as well.
Thomas: Yeah, Max Chandler-Mather quick to point out that the once a year is the case in a significant part of the country already. So he’s wanting to point out the fact that hang on it’s not as rosy at it seems. But just looking at your data it shows that during the June quarter new home building approvals, 15.5 per cent down in the year earlier, higher density home building approvals sunk 14.4 per cent. I mean, are we going in the wrong direction here?
Denita: Yes we are. We’ve been going in the wrong direction now on building approvals now for the last six months. That’s why we have been significantly concerned and continued our lobbying of governments at all levels that they needed to get their act together on supply issues. But equally, part of the reason that we are seeing the decline is elevated prices so inflation has meant that building costs have gone up 20 to 30 per cent and of course, ongoing interest rate increases also curtail investment into the property market. So, this is not just about yesterday’s announcement, it’s actually stabilising the economy as well to incentivise investment into the building industry. And it’s not just about houses but it’s all the infrastructure around those homes as well.
Thomas: We’re almost out of time, Denita Wawn, but I just want to ask what sorts of houses do we need to build; higher density or that sort of thing and do you want to see mandated quotas for affordable and social housing? What should this look like in the years ahead?
Denita: Well, it’s important that we consider up as well as out. We’re simply not utilising land effectively enough, particularly in our cities and our towns. So, we need to see greater flexibility of higher density. That is critical but equally, where we can go further out in terms of city and town spread then we’ve got to do that as quickly as possible at the cheapest cost as possible. And we need houses throughout the entire housing spectrum. We know we’ve got a shortage of social housing, community housing, rental accommodation and also affordable housing for owner-occupiers. So, we need housing across the full spectrum. It’s critical and we’ve got to be smart on how we use our land.
Thomas: Denita, thank you very much for joining us. Appreciate your time.
National Director, Media & Public Affairs
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