Labor failed to contact Australia’s largest property builder before setting its overly ambitious 1.2 million homes target, the company’s CEO revealed.
Australia is not set to meet its new homes target until mid-2030, according to the National Housing Supply and Affordability Council.
NSW runs about two years behind schedule while Tasmania and the Northern Territory run 4.25 and 5.5 years late respectively.
Brad Duggan, the CEO of Australia’s largest home builder Metricon, revealed this target was never discussed with the company before Labor announced it.
“I love the aspiration of setting a target, but no, they didn’t call us,” Mr Duggan told Business Weekend.
He said the government had engaged with the builder since announcing the target but stressed he would have called for sector-wide change if asked his opinion before the announcement.
“I would have said that it’s great to have a target and it’s great to have something to aspire to, but there’s a lot of structural change that needed to occur to make sure that was going to happen,” Mr Duggan said.
“It was almost setting something that was never going to be achieved because the underlying fundamentals of things had to be addressed to achieve that target.”
He argued that greater planning reform was needed to make the target viable.
“We are seeing some changes at the state level,” Mr Duggan said.
“The federal government is trying to make a change but they don’t have a lot of levers at their disposal to make those changes.”
The Metricon boss added that getting builders on site as quickly as possible was crucial to erecting homes at a pace that would meet the target.
“I built a home in 60 days,” he said.
“It takes a lot longer than that to get the planning approval ready to actually break ground.”
Dwelling completions across Australia in the March quarter fell 21,667 short of the pace needed to hit the 1.2 million homes target.
NSW completed just 8,883 new dwellings in the March quarter – the lowest total in 12 years.
The major state holds 31 per cent of Australia’s housing stock but delivered just 23 per cent of new completions in the first three months of this year.
Victoria was building at six per cent above its share of the national housing stock, while Western Australia was two per cent above and Queensland, South Australia and the ACT were each one per cent higher.
The housing market has been rattled by Labor’s recently announced negative gearing and capital gains tax changes.
Mr Duggan also said the government did not ask him about the changes before announcing them.
“No, I think it all happened very quickly in terms of responding to the changes and I think the government had to intervene because there’s all this unsatisfied demand that’s happening out there,” he said.
“I’m not quite sure whether the changes to negative gearing and capital gains tax was the right decision but it is a response to the fact that prices have been escalating very quickly and there was disjoint with wage increases over that period of time.”
Despite the lack of communication with the government before announcing the homes target or tax changes, Mr Duggan stressed he has frequent contact with Housing Minister Clare O’Neil.
“We have great engagement with the Housing Minister and I find her to be very interesting and spends a lot of time to understand what’s happening in the industry,” he said.
“Much more than we’ve seen in the past.”