An expert who has bought, sold and developed more than 2,000 properties warns that the true solution to Australia’s housing crisis is being ignored in the middle of the frenzy of loans.
The managing director of JFL Group, James Fitzgerald, fears that the true solution to the problem of the housing of Australia’s fuss is being lost, in the midst of more focus on increasing demand and housing prices.
Fitzgerald, whose uncle John Fitzgerald built the multimillion -dollar JFL real estate after Melbourne’s horsetop to Gold Coast to 17 with $ 200 in his pocket, among those citrus fruits they focus to fix.
Hello, he warned “It is supply, stupid: fix the supply, fix the crisis”, ask for more houses per kilometer or new infrastructure as a starting point.
The details below why the problem is causing it to lose calm.
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JFL Group MD James Fitzgerald fears that the housing crisis solution is being lost in the midst of more focus on increasing demand and prices.
James Fitzgerald:
In 1992, Bill Clinton’s political advisor made the phrase famous: “It is the economy, stupid.” The idea was simple: if it improves the standard of living of people, they will vote for you. If you don’t, they won.
When it comes to housing in Australia today, we need to adapt the line of James Carville: “It’s supply, stupid.”
It did not matter who voted in the May elections, the population of Australia is growing and that growth demands 240,000 new homes every year. In the best case, we are managing 160,000. That is an annual deficit of the size of the city of Wollongong.
It is not difficult to see why housing is becoming unaffordable. If we do not solve the supply, we do not solve the crisis. Full stop.
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Fitzgerald said the “demand distraction” was not helping to fix the offer.
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The distraction of the demand: much of the electoral coverage focused on the incentives of the buyers of the first house, as if delivering someone a deposit magically creates a house to buy.
To tell the truth, it is not so. The increase in demand without increasing supply only raises prices.
It’s like inviting more people to a dinner without cooking more food, it just means that someone is going home hungry.
Who is real in the field? In his defense, the federal government is not the one who kicks the ball. They can design policies and throw money into the problem (and they are), but when it comes to building houses, that work belongs to state governments and local advice.
Think of the federal government as the coach: they can shout from the side, but they are not the ones who run playing in the field.
The bottlenecks of the approvals of the local councils affected the supply of housing.
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Follow the money (and roads): to be fair, the Labor Government is throwing serious money. The real holders of the elections should not have been the schemes of the first -home buyers, but rather the infrastructure investment.
The newly chosen labor government will invest $ 5 billion on financing roads, sewers, water and electricity networks that make housing projects viable.
Even better, plan to reward states that reach housing objectives, channeling $ 3B or their commitment directly to those who do.
That is intelligent. Without infrastructure, the earth is just land. With him, it is a development site.
The bottleneck of the approvals: even if we had the infrastructure tomorrow, we could not build 240,000 homes because we are a good approach.
Housing approvals have been constantly decreasing since 2014, the last time we have just approved 240,000 homes. Last year, we approve only 170,000 houses. That is not enough for the construction that we need desperately.
Only 170k Casas were approved last year, compared to the need for 240k annually.
Why the deficit? Let me explain that there are two reasons: bureaucracy, state and local governments are not aligned; And the lack of urgency: approvals do not seem to be a performance metric for local advice.
You have to ask yourself: Does anyone at the advice draw on Friday and ask: “How many houses we approached this week?”
Progress, no perfection. Here is the silver lining: we are slowly moving in the right direction. In 2024, we built 168,049 houses. That is 2 percent year -on -year. It is still well below the goal, but one step forward, anyway.
And with billions of dollars now destined to unlock land, improve infrastructure and gratifying states that reach the construction objectives, we are finally seeing the political will to match the scale of the problem.
Density and infrastructure must go hand in hand, said Fitzgerald.
The real arrangement? Density and infrastructure. Potthastly, governments will realize that the solution is not just houses: they are more houses per kilometer of infrastructure.
We need a densest development near roads, pipes and energy. We need a densest development around the new roads, pipes and exhaustive energy that we build.
Nueva Gales del Sur is leading the position on this front, recovering the planning powers of some local councils that could not approve enough homes in the key transport infrastructure and its surroundings.
It is not radical. It is not ideological. It’s just economy, stupid.
* James Fitzgerald is a respected Australian property expert with more than a decade of experience in residential and commercial real estate. He is the managing director of the JLF Group.
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