The residential sector did the heavy lifting to pull Australia out of recession. But fresh research from the Property Council has found almost 70 per cent of voters believe the great Australian dream of home ownership is now out of reach for most Australians. A panel of heavyweight housing experts sat down to unpack the obstacles and opportunities.
Setting the scene, JLL’s national director of research Leigh Warner noted that Australia’s residential supply is like a “big ocean liner” – it’s very hard to get moving and very hard to turn around. After delivering 20,000 apartments each year for the last six years, “we’ll be lucky to get to 10,000 a year in the next four,” he said.
Mirvac’s head of residential, Stuart Penklis, agreed. Back in December 2019 – with no sign of a pandemic in sight – Mirvac could see “the crunch was coming”. It was “the first time in 25 years that Mirvac didn’t have crane on a Sydney project”. The problem, Penklis said, was supply. Fast forward to 2024, and the industry will be delivering less than half the new supply it was in 2018. “We are heading into a perfect storm,” Penklis warned.
Jennifer Macquarie, director of Fountaindale Group, offered valuable regional perspectives, as the Covid-induced exodus to the regions sparked “extraordinary” property price growth that put pressure on local infrastructure and eroded housing affordability.
Build-to-rent was one positive solution, the panel agreed. Macquarie championed housing diversity that “is appropriate to the setting” rather than “imported” from capital cities. What could that look like? Housing typologies like “Fonzi flats” and smaller blocks, she said.
Penklis noted that Mirvac was seeing greater demand for larger apartments with more flexible floorplates. Record growth for detached housing had encouraged more people to consider apartment living, he said. Four years ago, the sale price of a three-bedroom apartment in Green Square cost was around 95 per cent of the value of a home in the surrounding market. This had fallen to 65 per cent today, he said.
Prefabrication was another solution. Mirvac is assembling homes in southern Sydney in just four days by leveraging digital engineering and prefabrication, Penklis said. He urged the industry to push prefabrication as a “major factor in cracking the code of affordability”.