Immigration not to blame for the housing crisis in Australia. Who, or what, is?

Harry Triguboff, the founder of the largest property development company in Australia, Meriton, thinks it’s a bit of a cop out that immigration is being blamed for the current housing crisis.

“The government tells our people that by reducing immigration numbers it creates more opportunity for Australians in regards housing.

“We have a massive underlying housing issue and it has little to do with immigration.

“Immigration has been very good for the Australian economy, and more importantly, these people come and support our flailing health, building, hospitality, transport and infrastructure sectors.  People who are happy to do the jobs our people choose not to do.

“The government needs to address the underlying causes for our lack of housing.

“Property developers are tied up in so much red tape, government costs and delays, they can no longer afford to build,” he says.

Mr Triguboff referred to a recent story that was in The Australian Financial Review about “migrant surge to persist as graduates bring in families.” He says it is a very good thing that “a glut of Indian and Nepalese foreign student graduates are likely to bring tens of thousands of family members to Australia to accompany them while they work on post-study visas.”

The 485 visa, also known as post-study work rights, was introduced as a way of attracting and keeping more international students.

“I believe this particular visa will not be affected by the promised immigration cuts by Labor and the Coalition and these people will be eligible to enter the country,” Mr Triguboff says.

“That is very good news.

“Twenty-five years ago, when all the economic doomsayers were screaming, “over-supply,” I could never understand it.

“I could see where we were headed. It fell on deaf ears back then, and it still does today.

“I was the first to embrace the design competitions in NSW but we don’t need them anymore. I think we can all agree that our buildings are now some of the best in the world. We certainly have awards and accolades to prove that is the case, so now all the design competitions do is add additional costs and delays we can’t afford.

“Scrapping them immediately would be a good start to taking some of the pressure off. This has also been supported by the Premier, Chris Minns, and NSW Productivity Commissioner, Peter Achterstraat,” he says.

According to Mr Triguboff, the major problem is that approvals are taking two years instead of six months and the holding costs are crippling.

“Whether it is Labor or the Coalition, the government has a lot of work to do in regards to the housing crisis. Reducing immigration numbers is not going to cut it,” he says.

Mr Triguboff shared some of the costs, many of those that could be wound back immediately.

“Per unit costs for the design competition total $34,000. Approval delays add another $30,000 per unit.  Add the latest update to the National Construction Code costs and government fees, the total is $118,766.50 per unit. This cost is either borne by the developer or added to the final sale price, both of which are deterring production” Mr Triguboff says.

“Furthermore, the estimated taxes that Government charges on a $1.1 million apartment for stamp duty, GST, income tax, land tax, rates, developer contributions equate to $386,786 per unit in NSW which is the highest in the country.

“That’s without the excessive affordable housing requirements being imposed on all new projects in NSW which are only applied because of the years of neglect on housing supply by both sides of politics.

“This is not sustainable for me as the largest property developer in Australia nor the buyers. Smaller developers will not be able to survive, if they haven’t already been sent to the wall.

“These costs make it impossible for builders to make any profit at all. Builders are pushed out of the building industry because they cannot meet the extortionate construction demands placed on them by the government.

“And while we sit idle and can’t build, the government expects us to make up the shortfall by paying them more money again per unit. If we were building more, the way we should be, the government’s costs would be less but they would make more because of the volume. It’s false economy.

“Over the past 60 years Meriton has diversified within our property portfolio so we can weather the storm and remain profitable.  Very few builders can do that.

“If we had kept up with the demand over the past 25 years, we would not be in the situation we are today.

“I have offered a number of suggestions to relieve the problem, one by way of manufactured housing estates (mobile homes). Unfortunately, the current planning provisions to enable manufactured housing estates do not apply within the Sydney Region.

“The NSW Government is currently reviewing the provisions around manufactured housing estates but it would be a very good way to relieve the housing pressure and provide affordable living options.

“The NSW Government talks about quicker approvals and more vertical housing but again, it’s all talk,” he says.

And now, there is even a greater deterrent for builders in the form of Owners Corporations and defect claims.

“Now we have to suffer ridiculous claims being pulled out of the air by ambulance-driving strata lawyers trying to make a name for themselves for securing, “the biggest claim ever,” Mr Triguboff says.

“It is sensationalism at its most destructive and of course I will fight it until the bitter end.”

Fortunately, there is movement on that front. Rectification systems for residential apartment buildings will require mandatory dispute resolution through a government body before litigation can commence.  The NSW Building Minister, the Hon Anoulack Chanthivong, has agreed to this approach by drafting respective legislation, which is already adopted in Queensland via the Queensland Building and Construction Commission.

“So many of our current buyers are returning customers with their own Meriton portfolios and/or who are living with family and friends who have bought in the same development.  It is all white noise to them.

“I will continue to fight and cut through the red tape but unless the government, whichever one that may be, takes the problem seriously, it is going to be an uphill battle moving forward,” he says.