What is the ‘Brisbane Construction Outlook Breakfast’?
Good Morning, Build-it readers; today, we are updating live from the HIA Brisbane Construction Outlook Breakfast, part of the HIA-Colorbond Steel Housing 100 launch week event series.
A whose-who of industry decision-makers, home building leaders and Australia’s leading construction news platform, Build-it, have come together for a morning of insight and up-to-date analysis of conditions in the residential and wider construction industry.
This morning’s event marks the 17th annual Brisbane Construction Outlook Breakfast – the state’s premier building and construction event.
Building on industry relationships
Renee Bellert, State Manager of Building Markets at BlueScope, began her speech by emphasizing the company’s strong partnership with the HIA.
She acknowledged that this collaboration has been economically beneficial for BlueScope, a leading global steel supplier in the building and construction industries.
Bellert expressed gratitude for the HIA’s ongoing commitment to the housing industry, recognizing the organization’s significant role in supporting growth and innovation within the sector.
George Yamashita, Regional Manager for ARC (Australian Reinforcing Company), followed with a message echoing similar appreciation for the company’s collaboration with the HIA.
He further discussed some of the innovative material products that ARC is bringing to the market, underscoring the company’s continued contribution to advancements in the construction industry.
Yamashita highlighted the importance of these new materials in reinforcing ARC’s position as a key player in supporting Australia’s building and infrastructure sectors.
Population growth to push government action
Hon Grace Grace MP, Queensland’s Minister for State Development and Infrastructure, took to the stage to discuss the state’s efforts in addressing the housing crisis.
She acknowledged that population growth, which surged by 134,000 in the past year, is placing pressure on housing availability.
To alleviate this, the government is planning unprecedented infrastructure development, especially in regional areas.
The Home for Queenslanders program will support renters, first homeowners, and vulnerable residents, while increasing social housing to ensure every Queenslander has a stable home.
Hon Grace Grace MP continued by outlining the Queensland government’s focus on Priority Development Areas (PDAs) across South East and Greater Queensland.
She detailed recent updates to these areas and emphasized the government’s significant investment aimed at meeting the rising housing demand.
These PDAs are intended to fast-track infrastructure and housing development, particularly in regions under pressure from rapid population growth. Grace highlighted that these initiatives are crucial in addressing both short-term and long-term housing and development needs across the state.
Westpac’s economic outlook
Matthew Hassan, Head of Australian Macro-Forecasting and Senior Economist at Westpac, delivered an economic outlook for Australia, emphasising ongoing global disinflation while noting that the Reserve Bank of Australia (RBA) remains cautious about the nation’s unique economic conditions.
He explained that while inflation has decreased, the RBA seeks further reductions before considering rate cuts, which he expects may happen by February next year.
Hassan also highlighted inflation and labour supply as two major challenges specific to Queensland that will require careful management in the coming years.
Matthew Hassan shared additional insights on Australia’s housing market during his economic outlook. He explained that the current population surge is driving rent growth as global migration rebounds from pandemic slowdowns. Despite this being a target area of government reduction, the effects of policy changes are yet to be felt.
The trend toward smaller household sizes in capital cities is also adding pressure to housing demand. Hassan noted that while house prices are rising in most capitals, Hobart remains stagnant due to less interest from overseas migration.
He also highlighted the backlog in home construction, which has escalated building costs, and urged for policy changes to simplify building codes and fast-track new projects.
Negative gearing reform could worsen crisis
HIA Chief Economist Tim Reardon recently addressed the proposal to reform negative gearing, reiterating that such changes won’t lead to more affordable housing.
He argued that taxing housing investors would further reduce the housing supply, worsening the nation’s crisis and driving up both rent and home prices.
Reardon also pointed out the challenges faced by first-home buyers, especially those under 35, citing macro-credential restrictions as a major barrier to entry despite Australia’s exceptionally low rate of mortgage arrears and first-home buyers having the lowest Arrears rate by risk factor of less than 5 per cent.
He criticised government restrictions on foreign investors, which have significantly slowed down construction in major cities, despite the benefits these homes could bring to overall supply.
Reardon also expressed scepticism about the possibility of achieving the 250,000 net population growth target in the next few years, warning that this shortfall would only intensify the pressure on the already strained housing market.
He called for policies that focus on increasing housing supply to tackle rising demand, as well as addressing the backlog of construction projects essential for new homes to meet population growth.
HIA-Colorbond steel Housing 100
Reardon recapped the HIA-colorbond steel Housing 100 report revealed yesterday at the Melbourne Construction Outlook event.
Award-winning new home builder Metricon Homes again picked up the top spot for the ninth consecutive year, retaining its title as Australia’s largest residential builder.
Metricon Homes reported 3,894 new home sales across four states during 2023/24 despite a market slowdown in demand due to the rise in interest rates.
In second, with just 13 fewer home sales, was ABN Group, assisted by strong market conditions in Western Australia and growth in Victoria, seeing ABN rise up the ranks with 3,881 homes.
Meriton Apartments finished off the top three with 3,291 starts shared across New South Wales and Queensland. This was a jump from fourth place last year.
This year’s results were the tightest in the report’s 35-year history, with HIA chief economist Tim Reardon anticipating more new homes would be built towards the latter end of this financial year.
“Market confidence is returning to the new home market as interest rates remained on hold for the tenth consecutive month. Low levels of unemployment and strong population growth have driven ongoing demand for new homes despite the increase in the cost of borrowing and a decline in household consumption,” he said.
