Australia’s biggest developers have warned the housing crisis could last for close to a decade longer if state governments do not rein in their spending on infrastructure.
Mirvac chief executive Campbell Hanan said record infrastructure spending over the past few years had led to government mega projects beating housing projects in the race to secure builders. The problem had worsened with the recent growth in data centres development.
The consequence of housing projects not attracting enough builders was grim, Mr Hanan said. He noted rental vacancy was below 2 per cent, which meant that all homes were effectively taken because those remaining homes were probably places “where people don’t want to occupy”.
“There’s just not enough builders to build the homes because they’re busy with all the [government infrastructure work],” he told a Citi investment conference panel on Wednesday.
“So I think this is going to be a cycle that’s going to take a lot longer to fix – I think we’ll be talking about this in seven or eight years’ time.”
New data released on Wednesday by the Housing Industry Association shows the number of tradies nationally needs to grow by at least 30 per cent, or 83,000, to meet the federal cabinet’s housing accord target of building 1.2 million homes over the next five years.
At the same time, the Queensland government has increased its infrastructure spending substantially to cater for its burgeoning population, delivering a nominal record of $17.5 billion of infrastructure in 2024, according to S&P.
Peter Huddle, chief executive of listed shopping centre operator Vicinity Centres, said the crowding out effect of state governments’ infrastructure spending was affecting other property assets, such as malls, too.
“We’re not seeing that capacity at this point in time. The larger projects, particularly in Brisbane, are really competing against infrastructure projects,” he said.
“We will complete what we’re doing at the moment. Everything cycles, and hopefully in the next two to three years we will see more capability and more certainty to come back into construction.”
The blunt comments from the leaders of two of the country’s largest property owners follow the NSW Productivity Commission analysis that governments “diverting resources from home building to public infrastructure projects” was a major reason why there were so few new homes being built.
Fewer big tunnels, more schools in NSW
NSW Treasurer Daniel Mookhey, who also appeared at the Citi conference, acknowledged that big infrastructure projects were sucking in labour supply needed for housing construction. That meant the government needed to pare back its infrastructure spending, he said.
NSW Treasurer Daniel Mookhey says future infrastructure spending will focus more on schools rather than mega projects. Steven Siewert
He cited the NSW government’s previous commitment to reduce its infrastructure spending from historic highs of almost 3 per cent of gross state product to be 2 per cent, which is closer to the historical average.
Mr Mookhey said this would mean fewer mega projects, but more spending directed towards schools and hospitals.
“We’re comfortable with that as a broad setting,” he said. “To put this really simply, building a tunnel is very different to building a school, and that is where our infrastructure program is going. It is much more towards schools and hospitals than necessarily the mega projects.”
AcademicMaybe8775 on
im sorry mirvac but these state infrastructure projects are fucking NEEDED and your shitty developments will be in the 3rd world if these projects arent brought online to get us back into where we should have been 20 years ago.
And they are not the reason you suck at developing.
A proper argument could be planning laws are still stupid in a lot of cases (thanks liberals) and densification needs to be happening near transport hubs, but thats not the argument you are making, so piss off
Exotic-Knowledge-451 on
The Australian dream is no more. People can’t find or afford a home, and won’t be able to for at least 8 more years.
But hey, at least Albo can afford and acquire a $4.3 million dollar OCEAN VIEW mansion.
Climate change must be so real and deadly and gunna kill us all in the very near future for Albo to buy a million dollar mansion right on the coast that will supposedly be under water from climate change in just a few short years.
It’s all a lie. It’s all a con. The rich get richer while the poor get poorer.
GuyFromYr2095 on
In the mean time, the government continues to wave through 500,000 new immigrants every year, knowing full well that the housing crisis won’t be resolved overnight.
This government is a joke.
Finally, albeit belatedly, the electorate has woken up and is reflected in the latest polls.
Archy99 on
It’ll run forever, if we let it.
pennyfred on
I admire his optimism, up there with the 1.2 million houses in 5 years.
Top_Tumbleweed on
It’s crazy to put an end point on it when we haven’t achieved any part of solving it
7 Comments
**PAYWALL:**
Australia’s biggest developers have warned the housing crisis could last for close to a decade longer if state governments do not rein in their spending on infrastructure.
Mirvac chief executive Campbell Hanan said record infrastructure spending over the past few years had led to government mega projects beating housing projects in the race to secure builders. The problem had worsened with the recent growth in data centres development.
The consequence of housing projects not attracting enough builders was grim, Mr Hanan said. He noted rental vacancy was below 2 per cent, which meant that all homes were effectively taken because those remaining homes were probably places “where people don’t want to occupy”.
“There’s just not enough builders to build the homes because they’re busy with all the [government infrastructure work],” he told a Citi investment conference panel on Wednesday.
“So I think this is going to be a cycle that’s going to take a lot longer to fix – I think we’ll be talking about this in seven or eight years’ time.”
New data released on Wednesday by the Housing Industry Association shows the number of tradies nationally needs to grow by at least 30 per cent, or 83,000, to meet the federal cabinet’s housing accord target of building 1.2 million homes over the next five years.
At the same time, the Queensland government has increased its infrastructure spending substantially to cater for its burgeoning population, delivering a nominal record of $17.5 billion of infrastructure in 2024, according to S&P.
Peter Huddle, chief executive of listed shopping centre operator Vicinity Centres, said the crowding out effect of state governments’ infrastructure spending was affecting other property assets, such as malls, too.
“We’re not seeing that capacity at this point in time. The larger projects, particularly in Brisbane, are really competing against infrastructure projects,” he said.
“We will complete what we’re doing at the moment. Everything cycles, and hopefully in the next two to three years we will see more capability and more certainty to come back into construction.”
The blunt comments from the leaders of two of the country’s largest property owners follow the NSW Productivity Commission analysis that governments “diverting resources from home building to public infrastructure projects” was a major reason why there were so few new homes being built.
Fewer big tunnels, more schools in NSW
NSW Treasurer Daniel Mookhey, who also appeared at the Citi conference, acknowledged that big infrastructure projects were sucking in labour supply needed for housing construction. That meant the government needed to pare back its infrastructure spending, he said.
NSW Treasurer Daniel Mookhey says future infrastructure spending will focus more on schools rather than mega projects. Steven Siewert
He cited the NSW government’s previous commitment to reduce its infrastructure spending from historic highs of almost 3 per cent of gross state product to be 2 per cent, which is closer to the historical average.
Mr Mookhey said this would mean fewer mega projects, but more spending directed towards schools and hospitals.
“We’re comfortable with that as a broad setting,” he said. “To put this really simply, building a tunnel is very different to building a school, and that is where our infrastructure program is going. It is much more towards schools and hospitals than necessarily the mega projects.”
im sorry mirvac but these state infrastructure projects are fucking NEEDED and your shitty developments will be in the 3rd world if these projects arent brought online to get us back into where we should have been 20 years ago.
And they are not the reason you suck at developing.
A proper argument could be planning laws are still stupid in a lot of cases (thanks liberals) and densification needs to be happening near transport hubs, but thats not the argument you are making, so piss off
The Australian dream is no more. People can’t find or afford a home, and won’t be able to for at least 8 more years.
But hey, at least Albo can afford and acquire a $4.3 million dollar OCEAN VIEW mansion.
Climate change must be so real and deadly and gunna kill us all in the very near future for Albo to buy a million dollar mansion right on the coast that will supposedly be under water from climate change in just a few short years.
It’s all a lie. It’s all a con. The rich get richer while the poor get poorer.
In the mean time, the government continues to wave through 500,000 new immigrants every year, knowing full well that the housing crisis won’t be resolved overnight.
This government is a joke.
Finally, albeit belatedly, the electorate has woken up and is reflected in the latest polls.
It’ll run forever, if we let it.
I admire his optimism, up there with the 1.2 million houses in 5 years.
It’s crazy to put an end point on it when we haven’t achieved any part of solving it