Interest Rates Remain on Hold, But Housing Crisis Doesn’t

Not surprisingly, the Reserve Bank of Australia has kept interest rates on hold. Most of the banks and economists had already predicted there would be no movement, so today’s decision came as little surprise.

But while keeping rates unchanged may have been the expected decision, I can’t help thinking what a difference ever a small reduction could have made to the property market and, more importantly, Australians trying to buy a home.

I understand that RBA Governor Michele Bullock is cautious. But inflation is not out of control, and at a time when Australians are struggling with housing affordability, I believe we need to be looking at every possible way of helping people get into their own homes.

I know I sound like a broken record, but nothing is being done to genuinely ease the housing crisis.

We are not building enough homes. Developers are finding it increasingly difficult to get finance from the banks, while construction costs are overwhelming. Governments continue to make promises about housing supply, but the reality on the ground is very different.

I have been in this industry since the 1960s and I have seen these problems before – but not to this extent.

When I first started developing, banks would not lend money to single women. It was ridiculous. So, I borrowed money from the bank and then lent it to women who wanted to buy their own homes.

And you know what? They were some of the best borrowers I ever had.

Many of these women never imagined they would own a home, so when they finally had the opportunity, they treated it seriously. They budgeted down to the last cent. They were organised, responsible and determined to make sure they could keep their homes.

Today, I see something very similar happening with young Australians.

There are young people who want to buy a home and, in many cases, have the means to do it, but they are frightened. They don’t know what is going to happen next. They don’t know whether the banks will support them, whether government policies will change again or whether the cost of building will make housing even more expensive.

I can still lend money to help people buy, but I believe the banks should be doing more.

The banks have scared buyers away, with applications reportedly down 20 per cent since the tax changes announced in the Budget. Meanwhile, the fighting between banks and government is achieving very little.

We need stability. We need confidence. Most importantly, we need homes.

There is no point announcing ambitious housing targets if developers cannot obtain the finance to build and construction costs make projects increasingly difficult to complete.

Many developers will start a build, but the real question is whether they will be able to finish it.

I have spent more than 60 years building homes and I know what is possible when the conditions are right.

I have built 80,000 apartments. But could have built another 80,000.

Imagine if those additional homes had been built. Imagine how much difference that extra supply could have made to today’s housing crisis.

That is what frustrates me most.

Politicians talk about housing, but many of them know very little about development. They talk about timeframes and targets without understanding what it takes to actually get a project out of the ground, finance it, build it and deliver homes to Australians.

Construction costs are too high. Finance is too difficult. Buyers are nervous. Developers are being squeezed.

And yet we continue to talk about solving the housing crisis without properly addressing the reason we are not building enough homes.

We have serious problems and it will take serious people to fix them.