February 12, 2025 • 16 mins
Australian property is some of the least affordable in the world, putting the dream of home ownership out of reach of many residents. In this week’s episode, host Rebecca Jones and Bloomberg government reporter Ben Westcott take a look at the country’s housing crisis, and how politicians plan to fix it, ahead of the looming Federal election.
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Speaker 1 (00:01):
This housey anxiety has turned the Great Australian Dream into
the Great Australian nightmare.
Speaker 2 (00:06):
Government has withdrawn so far from housing as a policy priority,
and therefore from the human right to housing, that the
system has failed due to under investment, undercare.
Speaker 3 (00:20):
Well, Australia's construction sector has worn Ambitious housing targets won't
be achieved unless there's a massive increase in tradees and
key services like roads and power.
Speaker 4 (00:32):
Hello, I'm Rebecca Jones. Welcome to the Bloomberg Australia Podcast.
This week on the show, we ask are we about
to have an election that's decided on housing, or maybe,
more accurately, a shortage of it. Housing in Australia is
among the costliest in the world, especially in Sydney, where
the average home costs more than thirteen times and your
(00:53):
disposable income. I don't need to tell the renters listening
too that those costs have been soaring. Scott is a
reporter who writes about politics for Bloomberg. He's based in
Canberra and he joins me today. Ben. Great to have
you on the podcast.
Speaker 5 (01:08):
Thank you for having me.
Speaker 4 (01:09):
It does seem like our current cost of living crisis
isn't great timing for Prime Minister Anthony Albanezi and his
reelection prospects. Before we get into why housing is such
a critical issue ahead of the election, Ben, can you
lay out some cold hard stats for us.
Speaker 5 (01:27):
Well, you hear on it right there in your introduction
where you said that there was a thirteen times that
the current housing price is thirteen times the average income.
And I don't know if your average sort of listener
has any idea about how that compares. So let me
tell you back in the day fifty years ago, that
was closer to four times to seven times your average income.
(01:48):
That meant that, you know, for the average person, it
would only take up to seven years to pay off
their home, whereas now it's fourteen years, if not longer,
depending on where you buy. And I think that doubling
in the amount of time it takes to pay off
or the expense of a home has meant that many
young people nowadays feel that it's completely outside their reach
(02:09):
any sort of housing long term security, and that creates
economic uncertainty, it creates dissatisfaction among voters, and it does
leave parents frustrated for their children as well. So I
think that really is a great example of what is
behind this housing crisis. But it's not alone. I mean,
if you look at the matter highest prices have gone
(02:31):
up just in the short period of time over the
past year. We're talking sixteen percent in Perth, sixteen percent
over one year increase in house prices, twelve percent in Adelaide,
ten percent in Brisbane, And although they've come off a
little bit in the past year or so in major
cities like Melbourne, it's still up about thirty percent at
(02:52):
least on how it was before the pandemic. That's enormous
increases in a short period of time. And there's anyone
who lives in Australia will happily tell you that their
wages have not gone up thirty percent since the start
of the pandemic. So given that and the fact that
rents are also going up at the same speed. During
the pandemic, we saw a jump in RNTs that now
(03:13):
are going up by something like seven percent every single year.
Before the pandemic they were going up by something like
zero point four percent. So all these things have come
together to create a housing crisis in Australia that is
starting to really begin to rankle voters.
Speaker 4 (03:29):
So, Ben, you've been doing some investigation into how housing
will parlay into an election result whenever that is. We
don't know when the election is going to be. All
that we do know is that it's going to be
sometime before May seventeen. What can you tell me and
what do we know so far about how both of
the major parties are thinking about fixing the housing troubles
(03:52):
if they do get in come election day. Let's start
with the Dutton and the Coalition. What's his plan?
Speaker 5 (04:00):
So there are two major housing policies that have been
announced by the Coalition so far. There may be more
before election day, but they focus primarily on getting people
into homes and in homes in outer greenfield sites, that's
new homes on the outskirts of cities, out of suburban areas. Now,
the two policies, one of them is that Australians will
(04:20):
be allowed to take fifty thousand dollars out of their
super to buy their first home and then they'll have
to pay it back eventually when they sell the home.
But the view of the Coalition is that there is
more economic security for Australians by allowing them to take
fifty thousand dollars out of their super and buy a
home than by just having a larger superannuation account.
Speaker 4 (04:43):
Wait, so they have to pay it back to themselves
when they sell the house. Is that how it essentially
would work?
Speaker 5 (04:49):
Or yeah, exactly right. Yeah, so they after they sell
the property fifty thousand and that goes back into their superannuation,
but they will have lost that accrude interest in the meantime.
Speaker 4 (05:00):
Fifty thousand dollars I mean the median house price at
least in Melbourne, where I am is nearing a million bucks. Like,
what's fifty thousand going to do? What's the thinking there?
Is it implied that young people trying to get people
trying to get their foot onto the property ladder are
going to have some sort of substantial savings. Surely it
(05:21):
can't be just all hinged on that because it's quite
a low amount, isn't it.
Speaker 5 (05:26):
Well, fifty thousand would be a ten percent deposit on
a five hundred thousand dollar house. But I mean, as
you point out in place many places in Australia, five
hundred thousand dollar houses are not something that's readily access
units right, well, exactly, So the idea is that they
would have to be it would have to be added
to a deposit. But something that a lot of people
who are critics of this policy say is that many Australians,
(05:46):
picularly young Australians, don't have fifty thousand dollars in their
superannuation account to take out, particularly ones who had to
drain their super during the pandemic to pay for everyday
things that they needed. So there are definitely of that
particular policy. The other Dutton opposition policy has been that
they will put five billion dollars into allowing into building
(06:10):
out infrastructure to our the city greenfield sites that will
allow builders to construct with security new suburbs without having
to worry about the great expenses of building roads out there,
building sewerage, power lines, things like that that would be
taken care of by the federal government through that five
billion facility.
Speaker 4 (06:29):
Interesting, let's have a look at Prime Minister Anthony Albanizi
and his Labor Party. They're keen on the build to
rent model and other solutions as well, right like things
like modular housing. Can you step me through some of
the plans and the key plan if he has one
that we know of so far to fix this crisis.
Speaker 5 (06:50):
Yeah, Look, there's no doubt that the Labor Party's policy
is far more holistic. They want to see housing wherever
they can get it. They want to see more high density,
they want to see more green fields, but they just
want to see more houses in general for people. And
one of the options they've turned to is build to rent.
Build to rent is a system where Australians would pay
a corporate landlord rather than a mum and dad investor
(07:11):
to live in a apartment block. Now, this is something
that is not uncommon in other countries, but it really
hasn't been very much explored in Australia, partly through a
dislike of apartment living, particularly in Australian cities. But it's
now really taken the country by storm. You've got huge
build to rent tower blocks going up in major cities
(07:34):
like Melbourne, Sydney and Brisbane and all these are seen
as really important ways to find housing for people who
want to live close to services but may not be
able to actually afford a full house on their own.
In addition to that, the government's also grown in a
bunch of other policies and they have a large number
(07:55):
of sort of policies to address different things, all aimed
at an overall housing goal of one point two million
new homes by twenty twenty nine. Now, developers I speak
to say that they're a bit doubtful of that. It
will be a very difficult target to meet, but they're
also encouraged by the fact that there is a target
at all, and they say, even if you don't hit
one point two million, one million new homes, one point
(08:17):
one million new homes is a really good target and
something that's worth aiming for now. The other things they're
putting in place are the Housing Australia Future Fund, which
is a facility that would allow for investment in small
numbers of houses around the country, sort of like an
investment fund. And then things like the Housing Compact with
the States, where essentially if states beat their own housing
(08:39):
construction goals, they get a bonus for a good performance
from the federal government. So there's a lot of little
bitty policies that the government has put in place to
solve the housing crisis.
Speaker 4 (08:49):
And is there any sense that either of these two
parties policies are popular with voters? Is what is the
polling telling us?
Speaker 5 (08:58):
The one thing the polling does tell us is that
Australians are frustrated with the Albanese government and don't see
it having taken enough action to combat the housing crisis.
And I think there is the other thing that there's
no doubt of is that Australians don't think that this
suddenly appeared in May twenty twenty two. That you know,
they remember that housing prices started to skyrocke it in
the pandemic and that they've been unaffordable for a long time.
(09:22):
I think essentially voters blame both parties for this, but
as the current government is the Abenezi government, they want
to see solutions from it and they don't necessarily think
they've seen that.
Speaker 4 (09:32):
Let's keep our finger on the pulse of voter sentiment.
Both Dutton and Albanesi own property, as do many politicians.
Ben does this make them less relatable to the average
person who's struggling to simply get a rental or do
we just not care?
Speaker 5 (09:48):
It was a fascinating moment on another podcast recently that
Peter Dutton listened, Sorry that Peter spoke on, where he
talked eloquently about the procedures of selling blocks, splitting blocks,
you know, operating inside the housing market. He has a
real long history of being a developer of owning businesses
(10:11):
and land. I mentioned this because I think there is
a real ambition in among Australians to also have a
property portfolio. I think that's why when Anthony Albernese's four
point three million dollar holiday house at Copa Cabana was
revealed in October last year, while the press gallery in
Canberra went into paroxysms over it and were dominated the
(10:32):
news cycle for weeks, average Australians I think, you know,
some I'm sure were furious, but others kind of looked
at it and thought, well, you know, I'd like to
own a four point three million dollar holiday house on
the Central coast one day. And I think there was
a real aspirational quality to it which they quite liked,
particularly knowing Abernesi's backstory as a working class you know,
(10:53):
public housing kid. So I think that although both Dunton
and Alberanzi are properly developed, are property owners and landlords,
and that's something that the Greens political party have picked
up on a lot. The fact is that many Australians
look at that and they think I want to be there,
Help me get there, Rather than how dare.
Speaker 4 (11:13):
You hard scrabble upbringing aside? Who wouldn't want to live
in a place called copa Cabana? Pretty cool?
Speaker 5 (11:20):
Might just take the four point three million dollars to
be honest.
Speaker 4 (11:24):
After the break, we'll have a look at how record
immigration has exacerbated the housing shortage. This is the Bloomberg
Australia Podcast.
Speaker 1 (11:36):
There's obviously more to the housing problem than population growth,
and cutting immigration alone won't solve it. For example, there's
the lowest housing approvals in a decade, nimbiaism, the absence
of social housing, tax breaks for investors, easy loans sold
on commission, Airbnb robbing the long term rental market. You've
(11:56):
got to tackle them all.
Speaker 4 (12:00):
Back to the Bloomberg Australia Podcast. You're with me Rebecca
Jones and Ben Westcott Bloomberg's Man in the Press gallery
in Canberra. Today we're talking all things housing. We just
heard there from ABC business commentator Alan Kohler.
Speaker 5 (12:13):
Ben.
Speaker 4 (12:13):
When we talk about the housing market, there are a
myriad of factors that decide what that market looks like,
immigration being one. Another massive one, of course is the
interest rate. And while we're waiting to see what the
RBA is going to do there. I want to ask
you about your reporting in the field. You've talked to
a lot of developers and those in the construction industry.
(12:34):
What is their read on tweaking immigration policy to address
this housing shortage.
Speaker 5 (12:41):
So, just for people who aren't aware, there's been a
big boom in post COVID migration to Australia and net
migration peaked at about five hundred and fifty five thousand
people in the September quarter of twenty twenty three. Now
that's been blamed by the opposition for worsening the housing
shortage and number of other things around Australia, the cost
(13:01):
of living crisis. But when you talk to developers, what
they say is that they want more migration and not
necessarily people just to live here, but they want more
skills in the economy. They want more bricklayers, they want
more construction workers, they need electricians, basically every type of skill,
because one thing you hear from everyone is that they're
(13:22):
incredibly busy. There's never an end to the work, but
they could always do with more hands on those sites.
And I think that given the Australia is in the
middle of both trying to solve a housing shortage and
construct massive infrastructure projects in all capital cities. I think
no matter where you live in Australia, you will have
a giant patch of cranes and corkboards in the middle
(13:45):
of your city looking as you look at every day.
There needs to be more workers for that, and I
think that's something that developers talk about. A lot is
needed to solve a skills shortage rather than a migration crisis.
Speaker 4 (13:57):
So we've got Peter Dutton on one side with his
cashing out super idea better infrastructure planned for the outer berbs,
holding onto the Australian dream that way, Anthony Elbinezi on
the other side, build to rent. That's a complicated idea,
it is one that we do see gaining traction, at
least on the East Coast of Australia. Migration whichever way
(14:19):
you fall on that one, skill shortage is an enduring
issue that both sides better who gets in are going
to have to deal with. Before I let you go, Ben,
how has housing and affordable issues impacted on other elections
around the world in the past year. Can you reassure
me or at least give me some kind of hope.
Speaker 5 (14:40):
I think a great example is the US elation that's
just wrapped up in America, and that saw housing a
major issue on the agenda. We heard Democratic candidate Kamala
Harris pledging to introduce so sort of John Howard's style
first home Buyers grant that obviously she wasn't. But we've
(15:00):
also heard since his election, President Donald Trump talking about
need to restore the great American dream of home ownership.
So this is clearly becoming a major issue in America,
and it's been an issue in the UK as well,
which saw a change of government there. Now does that
mean we'll see a change of government in Australia. Not necessarily,
although there is something that would be worrying Premierustrength in Albernezi.
(15:21):
The fact is that Australians are a lot more vulnerable
to these interest rate rises because Australians have a lot
less likely to have a fixed term mortgage. In the US,
some fixed term mortgages can run for decades, whereas in
Australia it's much much shorter than that. In fact, we
often have this term the mortgage cliff, when all of
a sudden, a bunch of Australians fall off fixed term
(15:43):
mortgages and at the mercy of the interest rates. The
Reserve Bank's interest rates, and as we've seen over the
past year, we've had those at are thirteen year high,
which has made Australians feel more poor and more angry
about their situation. So when the Reserve Bank makes its
decision in February about what it's going to do with
(16:05):
interest rates, it won't just be homeowners and mortgage holders
across the country looking closely to see what happens. The
government will certainly be keeping everything cross that Michelle Borg
announces a cut to help its own election prospects.
Speaker 4 (16:21):
Paul and Angry. Let's hope that not too much more
of that in our stars. Great to have you with me, Ben,
thanks for having me, and thank you for listening to
the Bloomberg Australia podcast. I'm Rebecca Jones. This episode was
recorded on the traditional lands of the Wurundery and Nullable People.
It was produced by Paul Allen and edited by Chris
(16:42):
Burke and Ainsley Chandler. Don't forget to follow and a
review the show. Wherever you get your podcasts and sign
up for Bloomberg's free daily newsletter, Australia Briefing. Go to
Bloomberg dot com to subscribe.
This housey anxiety has turned the Great Australian Dream into
the Great Australian nightmare.
Speaker 2 (00:06):
Government has withdrawn so far from housing as a policy priority,
and therefore from the human right to housing, that the
system has failed due to under investment, undercare.
Speaker 3 (00:20):
Well, Australia's construction sector has worn Ambitious housing targets won't
be achieved unless there's a massive increase in tradees and
key services like roads and power.
Speaker 4 (00:32):
Hello, I'm Rebecca Jones. Welcome to the Bloomberg Australia Podcast.
This week on the show, we ask are we about
to have an election that's decided on housing, or maybe,
more accurately, a shortage of it. Housing in Australia is
among the costliest in the world, especially in Sydney, where
the average home costs more than thirteen times and your
(00:53):
disposable income. I don't need to tell the renters listening
too that those costs have been soaring. Scott is a
reporter who writes about politics for Bloomberg. He's based in
Canberra and he joins me today. Ben. Great to have
you on the podcast.
Speaker 5 (01:08):
Thank you for having me.
Speaker 4 (01:09):
It does seem like our current cost of living crisis
isn't great timing for Prime Minister Anthony Albanezi and his
reelection prospects. Before we get into why housing is such
a critical issue ahead of the election, Ben, can you
lay out some cold hard stats for us.
Speaker 5 (01:27):
Well, you hear on it right there in your introduction
where you said that there was a thirteen times that
the current housing price is thirteen times the average income.
And I don't know if your average sort of listener
has any idea about how that compares. So let me
tell you back in the day fifty years ago, that
was closer to four times to seven times your average income.
(01:48):
That meant that, you know, for the average person, it
would only take up to seven years to pay off
their home, whereas now it's fourteen years, if not longer,
depending on where you buy. And I think that doubling
in the amount of time it takes to pay off
or the expense of a home has meant that many
young people nowadays feel that it's completely outside their reach
(02:09):
any sort of housing long term security, and that creates
economic uncertainty, it creates dissatisfaction among voters, and it does
leave parents frustrated for their children as well. So I
think that really is a great example of what is
behind this housing crisis. But it's not alone. I mean,
if you look at the matter highest prices have gone
(02:31):
up just in the short period of time over the
past year. We're talking sixteen percent in Perth, sixteen percent
over one year increase in house prices, twelve percent in Adelaide,
ten percent in Brisbane, And although they've come off a
little bit in the past year or so in major
cities like Melbourne, it's still up about thirty percent at
(02:52):
least on how it was before the pandemic. That's enormous
increases in a short period of time. And there's anyone
who lives in Australia will happily tell you that their
wages have not gone up thirty percent since the start
of the pandemic. So given that and the fact that
rents are also going up at the same speed. During
the pandemic, we saw a jump in RNTs that now
(03:13):
are going up by something like seven percent every single year.
Before the pandemic they were going up by something like
zero point four percent. So all these things have come
together to create a housing crisis in Australia that is
starting to really begin to rankle voters.
Speaker 4 (03:29):
So, Ben, you've been doing some investigation into how housing
will parlay into an election result whenever that is. We
don't know when the election is going to be. All
that we do know is that it's going to be
sometime before May seventeen. What can you tell me and
what do we know so far about how both of
the major parties are thinking about fixing the housing troubles
(03:52):
if they do get in come election day. Let's start
with the Dutton and the Coalition. What's his plan?
Speaker 5 (04:00):
So there are two major housing policies that have been
announced by the Coalition so far. There may be more
before election day, but they focus primarily on getting people
into homes and in homes in outer greenfield sites, that's
new homes on the outskirts of cities, out of suburban areas. Now,
the two policies, one of them is that Australians will
(04:20):
be allowed to take fifty thousand dollars out of their
super to buy their first home and then they'll have
to pay it back eventually when they sell the home.
But the view of the Coalition is that there is
more economic security for Australians by allowing them to take
fifty thousand dollars out of their super and buy a
home than by just having a larger superannuation account.
Speaker 4 (04:43):
Wait, so they have to pay it back to themselves
when they sell the house. Is that how it essentially
would work?
Speaker 5 (04:49):
Or yeah, exactly right. Yeah, so they after they sell
the property fifty thousand and that goes back into their superannuation,
but they will have lost that accrude interest in the meantime.
Speaker 4 (05:00):
Fifty thousand dollars I mean the median house price at
least in Melbourne, where I am is nearing a million bucks. Like,
what's fifty thousand going to do? What's the thinking there?
Is it implied that young people trying to get people
trying to get their foot onto the property ladder are
going to have some sort of substantial savings. Surely it
(05:21):
can't be just all hinged on that because it's quite
a low amount, isn't it.
Speaker 5 (05:26):
Well, fifty thousand would be a ten percent deposit on
a five hundred thousand dollar house. But I mean, as
you point out in place many places in Australia, five
hundred thousand dollar houses are not something that's readily access
units right, well, exactly, So the idea is that they
would have to be it would have to be added
to a deposit. But something that a lot of people
who are critics of this policy say is that many Australians,
(05:46):
picularly young Australians, don't have fifty thousand dollars in their
superannuation account to take out, particularly ones who had to
drain their super during the pandemic to pay for everyday
things that they needed. So there are definitely of that
particular policy. The other Dutton opposition policy has been that
they will put five billion dollars into allowing into building
(06:10):
out infrastructure to our the city greenfield sites that will
allow builders to construct with security new suburbs without having
to worry about the great expenses of building roads out there,
building sewerage, power lines, things like that that would be
taken care of by the federal government through that five
billion facility.
Speaker 4 (06:29):
Interesting, let's have a look at Prime Minister Anthony Albanizi
and his Labor Party. They're keen on the build to
rent model and other solutions as well, right like things
like modular housing. Can you step me through some of
the plans and the key plan if he has one
that we know of so far to fix this crisis.
Speaker 5 (06:50):
Yeah, Look, there's no doubt that the Labor Party's policy
is far more holistic. They want to see housing wherever
they can get it. They want to see more high density,
they want to see more green fields, but they just
want to see more houses in general for people. And
one of the options they've turned to is build to rent.
Build to rent is a system where Australians would pay
a corporate landlord rather than a mum and dad investor
(07:11):
to live in a apartment block. Now, this is something
that is not uncommon in other countries, but it really
hasn't been very much explored in Australia, partly through a
dislike of apartment living, particularly in Australian cities. But it's
now really taken the country by storm. You've got huge
build to rent tower blocks going up in major cities
(07:34):
like Melbourne, Sydney and Brisbane and all these are seen
as really important ways to find housing for people who
want to live close to services but may not be
able to actually afford a full house on their own.
In addition to that, the government's also grown in a
bunch of other policies and they have a large number
(07:55):
of sort of policies to address different things, all aimed
at an overall housing goal of one point two million
new homes by twenty twenty nine. Now, developers I speak
to say that they're a bit doubtful of that. It
will be a very difficult target to meet, but they're
also encouraged by the fact that there is a target
at all, and they say, even if you don't hit
one point two million, one million new homes, one point
(08:17):
one million new homes is a really good target and
something that's worth aiming for now. The other things they're
putting in place are the Housing Australia Future Fund, which
is a facility that would allow for investment in small
numbers of houses around the country, sort of like an
investment fund. And then things like the Housing Compact with
the States, where essentially if states beat their own housing
(08:39):
construction goals, they get a bonus for a good performance
from the federal government. So there's a lot of little
bitty policies that the government has put in place to
solve the housing crisis.
Speaker 4 (08:49):
And is there any sense that either of these two
parties policies are popular with voters? Is what is the
polling telling us?
Speaker 5 (08:58):
The one thing the polling does tell us is that
Australians are frustrated with the Albanese government and don't see
it having taken enough action to combat the housing crisis.
And I think there is the other thing that there's
no doubt of is that Australians don't think that this
suddenly appeared in May twenty twenty two. That you know,
they remember that housing prices started to skyrocke it in
the pandemic and that they've been unaffordable for a long time.
(09:22):
I think essentially voters blame both parties for this, but
as the current government is the Abenezi government, they want
to see solutions from it and they don't necessarily think
they've seen that.
Speaker 4 (09:32):
Let's keep our finger on the pulse of voter sentiment.
Both Dutton and Albanesi own property, as do many politicians.
Ben does this make them less relatable to the average
person who's struggling to simply get a rental or do
we just not care?
Speaker 5 (09:48):
It was a fascinating moment on another podcast recently that
Peter Dutton listened, Sorry that Peter spoke on, where he
talked eloquently about the procedures of selling blocks, splitting blocks,
you know, operating inside the housing market. He has a
real long history of being a developer of owning businesses
(10:11):
and land. I mentioned this because I think there is
a real ambition in among Australians to also have a
property portfolio. I think that's why when Anthony Albernese's four
point three million dollar holiday house at Copa Cabana was
revealed in October last year, while the press gallery in
Canberra went into paroxysms over it and were dominated the
(10:32):
news cycle for weeks, average Australians I think, you know,
some I'm sure were furious, but others kind of looked
at it and thought, well, you know, I'd like to
own a four point three million dollar holiday house on
the Central coast one day. And I think there was
a real aspirational quality to it which they quite liked,
particularly knowing Abernesi's backstory as a working class you know,
(10:53):
public housing kid. So I think that although both Dunton
and Alberanzi are properly developed, are property owners and landlords,
and that's something that the Greens political party have picked
up on a lot. The fact is that many Australians
look at that and they think I want to be there,
Help me get there, Rather than how dare.
Speaker 4 (11:13):
You hard scrabble upbringing aside? Who wouldn't want to live
in a place called copa Cabana? Pretty cool?
Speaker 5 (11:20):
Might just take the four point three million dollars to
be honest.
Speaker 4 (11:24):
After the break, we'll have a look at how record
immigration has exacerbated the housing shortage. This is the Bloomberg
Australia Podcast.
Speaker 1 (11:36):
There's obviously more to the housing problem than population growth,
and cutting immigration alone won't solve it. For example, there's
the lowest housing approvals in a decade, nimbiaism, the absence
of social housing, tax breaks for investors, easy loans sold
on commission, Airbnb robbing the long term rental market. You've
(11:56):
got to tackle them all.
Speaker 4 (12:00):
Back to the Bloomberg Australia Podcast. You're with me Rebecca
Jones and Ben Westcott Bloomberg's Man in the Press gallery
in Canberra. Today we're talking all things housing. We just
heard there from ABC business commentator Alan Kohler.
Speaker 5 (12:13):
Ben.
Speaker 4 (12:13):
When we talk about the housing market, there are a
myriad of factors that decide what that market looks like,
immigration being one. Another massive one, of course is the
interest rate. And while we're waiting to see what the
RBA is going to do there. I want to ask
you about your reporting in the field. You've talked to
a lot of developers and those in the construction industry.
(12:34):
What is their read on tweaking immigration policy to address
this housing shortage.
Speaker 5 (12:41):
So, just for people who aren't aware, there's been a
big boom in post COVID migration to Australia and net
migration peaked at about five hundred and fifty five thousand
people in the September quarter of twenty twenty three. Now
that's been blamed by the opposition for worsening the housing
shortage and number of other things around Australia, the cost
(13:01):
of living crisis. But when you talk to developers, what
they say is that they want more migration and not
necessarily people just to live here, but they want more
skills in the economy. They want more bricklayers, they want
more construction workers, they need electricians, basically every type of skill,
because one thing you hear from everyone is that they're
(13:22):
incredibly busy. There's never an end to the work, but
they could always do with more hands on those sites.
And I think that given the Australia is in the
middle of both trying to solve a housing shortage and
construct massive infrastructure projects in all capital cities. I think
no matter where you live in Australia, you will have
a giant patch of cranes and corkboards in the middle
(13:45):
of your city looking as you look at every day.
There needs to be more workers for that, and I
think that's something that developers talk about. A lot is
needed to solve a skills shortage rather than a migration crisis.
Speaker 4 (13:57):
So we've got Peter Dutton on one side with his
cashing out super idea better infrastructure planned for the outer berbs,
holding onto the Australian dream that way, Anthony Elbinezi on
the other side, build to rent. That's a complicated idea,
it is one that we do see gaining traction, at
least on the East Coast of Australia. Migration whichever way
(14:19):
you fall on that one, skill shortage is an enduring
issue that both sides better who gets in are going
to have to deal with. Before I let you go, Ben,
how has housing and affordable issues impacted on other elections
around the world in the past year. Can you reassure
me or at least give me some kind of hope.
Speaker 5 (14:40):
I think a great example is the US elation that's
just wrapped up in America, and that saw housing a
major issue on the agenda. We heard Democratic candidate Kamala
Harris pledging to introduce so sort of John Howard's style
first home Buyers grant that obviously she wasn't. But we've
(15:00):
also heard since his election, President Donald Trump talking about
need to restore the great American dream of home ownership.
So this is clearly becoming a major issue in America,
and it's been an issue in the UK as well,
which saw a change of government there. Now does that
mean we'll see a change of government in Australia. Not necessarily,
although there is something that would be worrying Premierustrength in Albernezi.
(15:21):
The fact is that Australians are a lot more vulnerable
to these interest rate rises because Australians have a lot
less likely to have a fixed term mortgage. In the US,
some fixed term mortgages can run for decades, whereas in
Australia it's much much shorter than that. In fact, we
often have this term the mortgage cliff, when all of
a sudden, a bunch of Australians fall off fixed term
(15:43):
mortgages and at the mercy of the interest rates. The
Reserve Bank's interest rates, and as we've seen over the
past year, we've had those at are thirteen year high,
which has made Australians feel more poor and more angry
about their situation. So when the Reserve Bank makes its
decision in February about what it's going to do with
(16:05):
interest rates, it won't just be homeowners and mortgage holders
across the country looking closely to see what happens. The
government will certainly be keeping everything cross that Michelle Borg
announces a cut to help its own election prospects.
Speaker 4 (16:21):
Paul and Angry. Let's hope that not too much more
of that in our stars. Great to have you with me, Ben,
thanks for having me, and thank you for listening to
the Bloomberg Australia podcast. I'm Rebecca Jones. This episode was
recorded on the traditional lands of the Wurundery and Nullable People.
It was produced by Paul Allen and edited by Chris
(16:42):
Burke and Ainsley Chandler. Don't forget to follow and a
review the show. Wherever you get your podcasts and sign
up for Bloomberg's free daily newsletter, Australia Briefing. Go to
Bloomberg dot com to subscribe.
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