Metricon Homes CEO Brad Duggan warns that Australia cannot house its growing population, and believes the federal government must adopt a “wartime response” to the housing crisis.
Based on current construction rates, Duggan adds that the government’s target of building 1.2 million homes in the five years from mid-2024 will likely fall about 300,000 short.
“The future of our country in terms of our economics is based upon whether we can house a growing population and we can’t”, he said.
“I think we need a wartime response. When we look back over the last three years of this government we’ve not had a wartime response”.
“The customer needs to have confidence on their financing costs, confidence in the build journey and they need the tax environment that inspires them to invest and build rather than destroy that confidence”.
Duggan also claimed that it was vital to address lending restrictions, including the Australian Prudential Regulation Authority’s financing buffer, to increase borrowing capacity and tax reforms to “inspire” the building of homes.
Frasers Property Australia CEO Cameron Leggatt also believes that addressing the housing crisis requires a “continuing, concerted and co-ordinated” effort from all levels of government and the right policy settings.
Leggatt emphasises the need to reduce red and green tape in planning to meet the government’s housing targets.
“If we are going to call it a crisis, we must treat it like one. This includes addressing the solutions which are immediately available, such as blockages in the planning process”, he said.
“We have got to boost supply. We need a diversity of housing on the ground soon, otherwise more social issues will be created 10 and 20 years down the track”.
“Increasing supply means addressing deficits in market capacity, labour and planning systems – the red tape and green tape”, Leggatt argued.
Stockland managing director and chief executive Tarun Gupta also said that while the focus is on increasing the housing supply with the proper infrastructure, lending restrictions also need to be eased.
“These are critical to an efficient housing system and the quickest way to deliver affordable homes”, he said.
“There are several key factors in affordability – monetary easing, land supply and a first-home buyer’s ability to service their loan under the current regulatory settings. More monetary easing in the 50 to 100 basis point range is one part of improving relative affordability”.
“What’s also required is the regulatory easing of mortgage serviceability ratios, bringing them back within sustainable levels for first-home buyers”, Gupta argued.
As usual, these housing chiefs ignored the primary driver of Australia’s housing shortage and the obvious solution.
Australia’s population has expanded by 8.5 million this century via a massive increase in net overseas migration since the mid-2000s.
This jump in immigration created the structural shortage of housing and infrastructure, which could not keep pace with the deluge of people.
Treasury’s Centre for Population projected that Australia’s population will expand by 4.1 million over the coming decade, with most of this growth landing in the major cities.
Melbourne is projected to grow by one million people over the next decade, while Sydney will gain 900,000 and Brisbane and Perth will add 500,000 each.
Most buyers of homes in new housing estates are new migrants, especially Indians.
The longer-term projections are even worse.
The latest Intergenerational Report projects that Australia’s population will balloon by around 13 million people (circa 50%) in 38 years, driven by permanently high net overseas migration.
Such a population expansion will require the construction of around 6 million dwellings, accounting for demolitions and holiday homes.
How will Australia’s housing and infrastructure shortages ever be rectified when the government continues to firehose demand via unsustainable levels of net overseas migration?
Excessive immigration is the primary cause of Australia’s housing shortage.
Slashing immigration to a level commensurate with the nation’s capacity to build housing and infrastructure is, therefore, the primary solution.
