Why does big business want Australia to spend billions on not building houses?

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Housing developers have a keen financial interest in drip-feeding new homes into the market to maximise their returns

‘We always forget one hugely important policy setting in the country that is right now designed to get fewer homes built, not more.’‘We always forget one hugely important policy setting in the country that is right now designed to get fewer homes built, not more.’Like we do every economic cycle, we misinterpret a short-term asset-pricing cycle for a long-term trend and shortage of physical homes. After all, the widely claimed shortage is global and suddenly emerged as prices boomed post-Covid.

Like many proposals before it, the BCA focuses on things like removing taxes from property owners. One proposed tax change is to reduce withholding taxes on foreign investors for build-to-rent projects, which is a puzzle if ever I’ve seen one. Why exactly do we need tax breaks for foreigners when they have demonstrated they are happily already investing in these projects?

Meanwhile, it’s basic arithmetic that workers and their families entering the country to help build homes need more housing than they can build with their own labour time. A cynic might suggest that the BCA proposal to import more trade workers is designed to reduce the bargaining power that construction workers have at this high demand point in the property cycle.

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