This episode was recorded on the land of the Wurundjeri people of the Kulin Nation. We pay our respects to their elders past, present and future.
Richard: Hello, and welcome to another episode of Precisely Property. I’m your host, Richard Temlett. I’m excited to have you with us today.
If you’re here for the first time, thank you for joining us. I encourage you to listen to our previous episodes where we discuss all things property, with a focus on dynamic discussions with industry leaders. In this episode, we’ll be talking about the housing crisis in Australia and how to resolve it with Mark Dawson of Urbis. So, sit back, relax, and let’s get started.
The huge challenge of our time is to inspire a new liveable future for all Australians. As national housing lead at Urbis, Mark connects you to the urban advisory team to shape your part to that vision. Backed by 20 years as a public and private sector consulting, Mark is valued across the system for his thinking throughout the full housing and precincts life cycle. Welcome, Mark.
Mark: Thanks, Richard.
Richard: Mark, in today’s episode, we’re going to talk about the major housing crisis we have in Australia. We’re going to talk about what’s caused it and also what needs to be done to actually resolve it. Given the work we’re both doing in this space, I thought you’re the ideal person to come on the show and to have a debate about the issues as we see them. An unbiased debate where we can certainly play devil’s advocate and look at the pros and the cons on the different tools and levers that can be pulled as an education piece to help move the industry forward to resolve what I think is a generational issue and one of the biggest challenges that Australians are going to continue to face until we find solutions. Before we get into the session, which I can’t wait to do, I do have an icebreaker question for you, and the question is as follows. If you could live in any city in the world for a year, no work, just soaking it all in, where would you go and why?
Mark: Thanks, Richard. This question’s quite funny. It reminds me of the one where they say, “if you could invite anyone to dinner, who would it be?” And as an adult, usually go for something exciting and inspiring and say, well, it’ll be Rosa Parks or it’ll be Elvis Presley or your favorite musician of the time. And then your daughter or your kid will say, actually, I’d really like mom, dad, no, no, granddad, and my cousins. And, of course, they’re right. We often jump to the big shiny thing, but it’s really the fundamental simple things that make life stack up. And so, I think seeing as I love what I do, taking the work away for a year and thinking about where I want to be, really, it’s with my family and friends. Whether that’s in Australia or in Melbourne or London or Paris where my collective family are based, it’s going to really be about that.
I think, essentially, you do think for a minute, well, I would love the fantastical atmosphere of Rio De Janeiro or Buenos Aires or something completely different. But I think it’s about learning, giving yourself the best blend of where to spend time and be a better dad, partner, family member, and learning at the same time. Melbourne’s got some great things going on, so that’s a really solid place to start. But I think I’d probably take the time to go back into Europe and maybe work on my French a bit in France but be close enough to my family in the UK.
Richard: That’s a brilliant answer. I love that. And to be honest with you, I share a lot of your morals and your views. Thank you for sharing that with us, it ties into my next question. Are you able to please tell us a little bit about your background and your experience in the industry for people that don’t know you but also wanted to learn more about you and perhaps want to even follow in your footsteps in your career?
Mark: Yeah. Thanks, Richard. As many of you will pick up from my mongrel accent, there’s a good stint in Australia now. I’ve been here for 13 years, moved out in 2012. Before that, I grew up in England. Small town, probably the first bit of countryside you get to outside of London to the East. An Essex boy. Not of the fame of the super TV shows about Essex, but I grew up in England. I had a great family upbringing, a son of a valuer. So, the property interest was fostered pretty quickly to work out what things are worth and what sits behind that.
Through my studies, as I progressed, I got interested in French language at school. And going to university, I got interested in more of the international elements. So, I started looking at international economics, politics, as well as language and human geography because I think what really interested me throughout my educational upbringing was people, of course. What drives them to live in certain places and make their decisions, and how do places evolve with property around them? And so, it’s really a logical place for me to end up here. I think at the start of my career, I started out in London working for one of the big agencies. They just bought a fairly boutique and technical consultancy. I was exposed to this really interesting blend of your policy advisory work, making government funding go further and get great outcomes. But with the real estate agency lens to say, what’s big investment doing? And what does that mean when a Middle Eastern investor wants to buy a big property in London or developing a mixed-use resort in the Middle East or Europe, for instance? So that was a fascinating broadening of horizons for me career wise bringing together my interests, my education, and then in meeting my partner who is French but also a citizen of the world having lived in the States, Canada, the UK and France.
We set about saying there’s got to be more out there. Where are some places where my partner in international development and aid at the time and myself in more of the real estate and the economics advisory world, where can we both have a different life, but both have a solid career? And we narrowed it down as many people do across the world to say, okay, Australia’s got a lot going for it. I think the big cities in Australia really got a compelling proposition. Canada was on the list, of course. And then there are a few cities in Asia where we thought, yeah, actually, that could make sense. And in the work I was doing in the Middle East at the time, I met up with a colleague of mine from a former role and just started talking. And she said “Actually we’re moving back to Melbourne. Urbis has got this role going. I think you’d be great at it.” After a long period of time on Skype calls at strange hours from overseas, things moved pretty quickly, and I was very fortunate to be given the chance by Urbis to come here and start more of an economics in housing business.
So, I moved to Melbourne and I found a really welcoming place. I was worried about first, I realised how little I knew coming to a new market. You’ve got this level of assumed knowledge when you build up a bit of time somewhere. When I moved here, I was like, I don’t know anyone. I don’t know the geography. I don’t know the data, and yet people heard me out and welcomed me as an opportunity to think differently. And I really value that about Melbourne as a place. And since then, I think that full circle of focus is going back from more of a market led economics in housing lens to there’s a greater complexity in the system here, which is drawing upon some of the earlier policy work. It’s great to be able to see the layers of your life come together to where you’re going next, and that’s a really rewarding thing to reflect on. So, thank you.
Richard: Oh, fantastic. And then to bring it up to speed, obviously, you’ve been at Urbis since you’ve been in Australia, and you now have a national role as we were talking about offline, specialising in the housing market. Is that correct?
Mark: Yeah. That’s right. At Urbis, probably like yourself here, we’ve realised that this is such a significant challenge, and there’s such a broad and diverse ecosystem that sits behind housing that this is where we should be playing. This is where we should be focusing our effort. And so in our organisation, I’ve taken that role to bring the best of our multidisciplinary firm and say, let’s go and tackle that. Let’s go and take the best of our brains, put them together in one place, and tackle it.
Richard: Great. I hope now the listeners are listening to what you’ve said. They can hear, obviously, your experience and your background, but also the reason why I invited you on the show today because we have a major housing crisis. I don’t think that there’s any easy answers or quick solutions, but I’ve been growing increasingly frustrated with the level of analysis, which is lack of action that needs to be done to resolve the housing crisis.
We act in a very similar space, and we’re on various industry panels. And, yes, we both specialise in the housing market. And I thought there’s no better person to come on the show to talk about some of the causes of the housing crisis, but more importantly, some of the solutions that might work, that might move the dial to resolve the housing crisis. And what we’ve agreed to do before we started the session today is to basically just have a discussion rather than a more formal interview where you can ask me questions, I can ask you questions. We’re going to play devil’s advocate on some of these issues.
Unfortunately, we’ve just come off the back of a federal election, and we heard both sides of politics or all sides of politics had to say. And I must admit, I was rather underwhelmed with the full understanding of the housing crisis and some of their policies. And I think that it’s going to take outside of the box thinking to resolve the housing crisis. So having you and I on the show, we’re both independent. We’re both specialising in this segment of the sector. We live and breathe it. We are retained by both public and private clients, big and small, and we’ve gone through a number of market cycles together. I’m keen to start fleshing out what’s happening here. Perhaps we can even talk about some of the things that are going on overseas to inform what the solutions might be. So, let’s kick that off then.
There’ll be two parts of the session. The first one’s the problem of the housing crisis, and the next one, and the most important part of it, is the solution. So, in terms of the housing crisis, let’s start really broadly. What are the causes of the housing crisis in Australia?
Mark: Yeah. It’s a juicy one, isn’t it? I sometimes think that we forget because we’re stuck in a conversation that repeats itself and is one of narrower aired frustrations in many respects. I find it useful to think about – what would a good housing system look like? If you bring it back to basics, what are some of the things that you’re looking for in that, we’ll probably come up with slightly different things, but that overlap. But at a really basic level, you’re looking for a system where all of the players in it are getting what they need out of it. So, if you are producing housing, you can do it viably. You can get paid. You have a predictable pipeline. You know how long things will take. You know what things will cost on your input side. And you have a customer on the other side of that, there’s something for everyone. You might all have different budgets or different affordability, but there’s something for each of you that you can access and afford. And the system itself enables that, and it puts it in places where it’s not going to cost the government too much money to fix things that are already broken. And it should keep pace as much as reasonably possible with the infrastructure pipeline that makes places livable, whether social or physical infrastructure.
But what actually happens is no one single entity has any major control over the whole system. Everybody’s seeing their little patch. It’s like a jigsaw puzzle that’s spread out on the floor at times. And you see your own interests, and you don’t necessarily see how you can be part of a broader solution because it’s hard. It’s a global thing. If you think about how we’re putting Australia up against that preferred system at the moment, we’ve got a few crazy things going on to the inputs, haven’t we? If we come back to that predictable supply pattern, that’s had a pause for a long period of time now because a load of the inputs or the demand on those inputs is being pulled in different directions. We’ve got big infrastructure projects that are pulling out materials and labour. We’ve got everybody in the system with a form of affordability problem whether you’re a customer who’s struggling to pay rent or you’re not able to borrow the amount of money that you want to be able to access a home. There’s risk in the system for builders who are operating on a different set of assumptions than they have in previous years. And it’s all moved quite quickly in different directions, and everybody has had a bit of a panic.
And that’s leading to less happening, it costing more to deliver, and, of course, costing more to consume. So, you’ve got this delta emerging between – if housings meant to be an enabler of interaction with the economy and society generally, you’ve got this delta emerging between the haves and the have nots. And that’s happening globally. Australia in the past has been a really good example overall for a society that’s driven on equality and opportunity for all. And it’s increasingly challenging that notion at the moment because this emotional reliance on housing as well as the sort of industrial lens of housing is all getting quite complex.
Richard: Thank you for that explanation to set the scene. As you were talking, I made a note on the notepad in front of me. There’s a book I recently read called The Silo Mentality. I’m not sure if you’ve read it but, basically, you’re describing certainly what happens across a number of industries where people have their patches they focus on, and they don’t look up above what else is going on and try to connect the dots. And, unfortunately, that’s one of the major issues we have with the housing system right now where we’ve got different stakeholders at different levels of government or in the private or in the public sector that have a different view of the world, and they’re focusing on what they need to get right.
But no one’s really taking a step back, or certainly in my view, taking a step back and going, how can everything be put together like those pieces of a puzzle on the floor? What are the outcomes that we’re trying to achieve? You made a comment about it, and I will fill in some of the gaps. About 20 years ago, it did look like we were building enough housing based on population growth and the supply of dwellings. But since then, so really over the last two decades, we’ve had an explosion in demand mainly from overseas migration, but not the commensurate response from supply.
Let’s start with demand. Let’s start with population growth. What are your views on that? Is it good for the country? Is it driving demand? Is it a major issue that we need to be aware of? What do you think?
Mark: Yeah. Great question, Richard. It’s a very popular one. Any surge in demand is going to have an impact on the system, isn’t it? The growth in population itself isn’t necessarily a bad thing in my view. In many respects, the Australian economy is relying on it. So, if you think about quality of life for Australia as measured by GDP or GSP or any of those economic measures at a national state level, we’re relying on people to bring in activity. We’re taking skilled migration, and we’re enriching our society with new people. We don’t have a massive population in global terms, and we have a rich and diverse economy that is able to absorb them and relies upon that migration. I don’t see that as a problem. I think the reality is that we’re in a winners and losers environment in housing at the moment, which accentuates the feeling of loss that people that are challenged in the system can feel when they see others taking opportunity in the country. You see it happen around the world. There’s a need for it, but it adds pressure to certain people in the system.
So, I get people’s concern over it. But I think if we come back to what is actually the opportunity to respond to that, it’s how well can we keep pace with that demand in supply. And I think that’s where there’s been a few studies. I think AHURI has done some studies looking at when the underlying demand continues, where does the purchase demand come from, and how quickly does that stimulate a supply response. There’s a decent enough relationship in the work that they’ve done to talk to how price growth from demand growth leads to supply growth and keeps pace in a measured fashion.
But probably not quite at the speed that’s needed to keep things on an even keel for all segments of society. So, what that suggests to me, and others will have made this observation too, is that you need to have a couple of different dimensions to how we’re dealing with supply here. Going back to what we said earlier about meeting the needs of the diverse population, what are we providing at the social and affordable housing end in a predictable and reliable manner where the broader market can engage with a predictable funding environment? What are we doing to prop that up at the same time as dealing with a wider range of opportunities for the mainstream market?
If we do that successfully, we take away some of that sentiment and pressure because much of this in my view is about not just the system itself, but how we engage people, whether that’s stakeholders in local government, whether that’s residents that are opposing growth in their backyard. Much of what we’re trying to do here is change people’s view about what the Australian dream is for a wider range of people and what role they can play in facilitating that and benefiting from that.
Richard: Great. Again, another note I made as you were talking, I’ve noticed a big distinction between going back to The Silo Mentality, you’ve got the political side of things where basically the politicians at whatever level, they’re in power for a certain period of time, and they, unfortunately, are driven by staying in power and being popular, if I’m being a bit cynical, but also being honest. And then you’ve got the property side of things, which typically takes a lot longer than an election cycle to be developed, whether it’s planning and the implementation of planning or the construction of infrastructure or even apartment or house and land projects that take more than an election cycle to be delivered.
What are your views on removing the politics from all of this and getting more bipartisan support given we’re in a housing crisis right now to either facilitate additional levels of supply. But what are your thoughts there with politics versus property?
Mark: Yeah. It’s a great question because there are merits, aren’t there, on either side of this ledger where the table tennis of politics keeps a middle ground and it’s not perfect, but it’s accountable to an electorate at the end of the day. Go to the other end to an autocratic regime, you can try anything you like. You can deliver things at speed, and you can totally push the boundaries as to what future ways of doing things can be. And what I think we have addressed in this conversation already is that there is a real investment mindset that’s needed for housing. Whether you are funding it or delivering it, you’ve got a certain time frame that is just a reality. You have to take time and judge those cycles as best you can from a market perspective, as well as a funding perspective, as well as a politics perspective.
If you can introduce any form of stability into that system so that, as we were discussing before, the community housing sector or capital partners and developers in that space can rely on a predictable, repeatable scheme to fund and deliver housing, that’s useful. If you have a joined-up focus on how to deliver housing, how to incentivise delivery of housing throughout the layers of government, whether that’s state and local, so that the opposition is chipped away to say, what am I getting out of playing my role here? You’re getting something useful. As opposed to it always appearing like you’ve achieved something in life and you bring up the door behind you because you’re like, I feel safe now. I’ve arrived in the life I want, the electorate I want, or whatever it is, and now I need to look after my castle.
I understand people’s fear about change, especially having worked hard to achieve that. And we’ve got to remember there’s so much invested in people’s motivations, their wealth, their social network, and where they live. When you throw in uncertainty and growth and change to that, they can be spooked. And so, we’ve got to change the conversation to some degree. I’m wandering away from your question, so I’ll come back eventually.
I think we’ve got to change the conversation a bit to say, well, look, if you don’t do this, why are you choosing to exclude people, and what are the consequences of that? Some of the consequences of that might be quite economically striking. You might not realise it, but they are. And then I think coming back to your question about the political stability here, I think there are some core elements as with long-term infrastructure projects. If you bring that mindset back to housing, I think that is a useful way to approach this.
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Richard: Look, before we get onto some of the solutions, I wanted to talk to you…we both know that there’s a fundamental mismatch between the demand for dwellings and the supply of dwellings. You made the comment that living preferences are starting to change. I’m interested in your views on The Great Australian Dream in terms of owning a quarter acre block of land that was obviously ingrained, it looks like, in the middle of last century, perhaps a little bit before that, but that’s when homeownership rates really kicked up. Is that dead? Is it evolving? What are you seeing on the ground with respect to The Great Australian Dream?
Mark: It’s a good one. My view here is that we’re a little bit stuck by talking about it as a single dream. And I think if you go and talk to a few different groups of people at different life stages, they will all be different.
You’d say, what’s the Australian dream of an international student moving to Melbourne for the first time? What do they want their life to look like, and how does housing potentially in PBSA (Purpose Built Student Accommodation) or a rental BTR (Build to Rent) or any other sort of private rental opportunity. What does that look like for them? And that will look quite different to the young professional that’s starting out and maybe renting for longer than they did in the past because we live differently. Then there’s the first home buyer. There’s the right sizer. There’s the families, the upgraders, and their dreams are all going to look different. The reality is that many people will absolutely love to have a detached family home that’s looking beautiful, and it’s got a nice garden that’s easy to maintain. Of course, they will absolutely love that at some stage in their life. But when you weigh up where you want to be for a period of time, there are going to be a lot of other reality points on that spectrum on the way before and after that or maybe even forever.
Richard: Look, I agree with you. I think that Great Australian Dream, it needs to be viewed much more broadly because we’ve both done different studies of the market, and there needs to be different types of dwellings delivered to meet different people as they go through different phases of their lives. And perhaps that Great Australian Dream is a little bit one dimensional compared to where we are now, especially with the levels of overseas migration at different age groups. And so, I think that’s an incredibly well-made point, and I hope all our government listeners are reminded that it’s not all about either house and land or apartments or townhouses or Build to Rent.
I feel that there’s different types of dwellings that meet different people’s needs throughout their life cycles. And the best housing markets that I’ve studied have that diversity of stock of different age, of different dwelling type, of different price point or rent. It allows different people to come in and out of the suburb, and that’s absolutely critical. And I have very real concerns when you look at some of these beautiful areas of Australia right now. They are very one dimensional. They’re overweight with detached houses. And your point about people 20 years ago having worked very hard to get into the housing market to pay off their detached house, that’s all well and good for them. But I suppose the question that I’d also ask them to consider is where are their kids? Where are their grandkids going to live? Are they or their kids or grandkids being afforded the same opportunities that they once were?
It’s a vexed question. It’s very difficult to answer, but I think where we are now, and I see it playing out in politics with voting at the most recent election, the federal election. You can see there’s different segments of the market that have different views of the world and are frustrated for various reasons. And I do believe that we need a housing market that can respond to the variety or the diversity of needs that are out there at present.
Mark: It’s fascinating, isn’t it? Because on the one hand, we are looking for diversity from a customer perspective, wanting different things and being able to respond to people’s reality. We touched on everybody having an affordability problem in their system to a degree, but there’s also an affordability preferences issue. At different points on that life cycle that we all take, and there will be different, we will choose between a series of trade offs, won’t we? We’ll say I want a bigger house. I want a lower mortgage. I want to be close to where I work, and therefore, I’m happy to pay more rent, and I want the bells and whistles with it versus I really just need a roof over my head so that I can get my stuff together and get a job. There’s all those different circumstances and decision-making pathways that we’ll make on the journey based on the cards we played at different times.
Richard: Let’s shift gears and talk about the solutions. In terms of the problems we’ve established, and our listeners would well know that the market is unbalanced. In many respects, it’s arguably broken. Right now, there are a number of structural changes, whether it’s tax or planning or labour, that need to occur, in my mind anyway, so that we can have a housing market that’s fit for the next 50 years. And so that’s what I’m keen to talk to you a little bit more about today because coming off the back of the election and seeing some of the ideas that the government from both sides of politics proposed, it seems to have been the same stuff that’s been rehashed over the past 20 years.
I’m going to kick off this part, and I’m keen to get your thoughts on it. I don’t know if you are, I’m sure you are aware, but back in 2009, Ken Henry put together a report looking at our tax system. And it didn’t just relate to housing, of course, but it’s one of the most amazing reports I found where he basically went through different areas and looked at what was working, what was not working as it applied to tax. But one of the main findings back then was that he identified stamp duty as being a huge hindrance on people moving and locking people up in certain markets because of that significant upfront impost.
His recommendation was to replace stamp duty with a broad-based annual land tax. And he pointed to the ACT, which have started to do that, phasing it in. It’s taking one to two decades to do, and that’s perfectly reasonable. Because we’re recording here in Melbourne, and we’ve got such a major issue with stamp duty in addition to other tax and charges that are preventing people from moving or making housing unviable. What are your views on his ideas there, particularly with land tax replacing stamp duty?
Mark: I think it’s a very interesting idea. And given what’s happening in the world at the moment, it prompted this comparison, and I won’t be the first to do this, but I was like, it’s a bit like putting a tariff in the way of trade, isn’t it? You’re putting a high cost on somebody that makes them think twice about doing something. So, if we are looking to compete with global destinations for investment, for talent, for industry, for activity and growth in all these things, we want to reduce people’s hurdles to be mobile in that system. If we are throwing on a $100,000 charge to someone just for the courtesy of moving, that’s not really doing that in my view.
I looked at this recently. I’m happy where we live. Every so often you look at the glossy brochures that come across your desk and you say, oh, that looks very nice. And you say, okay. What could we do? Alright, if we stop eating meat and vegetables and don’t go on holiday ever again, perhaps we could afford that place. And then you say, oh, no. I forgot because you’ve got this huge tax on top of it, where does that come from? So, for someone in my position with all the privilege that comes with being in a professional job, dual income household, to choose not to release my home and move into a different one because of the barriers of tax more so than finance or security or anything else, I think that’s really instructive.
Take that across the rest of the market and say, to what extent is that affecting other people’s mobility and investment decisions? And you’d have to say, absolutely. And you and I have both done pieces of work on this as we’ve seen it in the inner-city apartment markets, for instance. You’ve done some great work layering out the different costs, not only of development, but also in tax, and our team at Urbis has done as well. And when you look at things, you ask yourself, if volumes are getting so low on transactions and completions of units, would we be better off increasing the volume at a lower rate here or having a more predictable pipeline of revenue for the government and a more accessible hurdle to the market? I can see the logic in that.
Richard: Yep. It goes back to your point about win wins for everyone in an ideal. And I don’t even think, I wouldn’t say it is a utopian view of the housing market. I think in a balanced housing market, there really should be, everyone can win. There can’t be winners and losers. That’s just unacceptable. And especially in a country like Australia, we can get it right, having such bad losers. And I’m not really seeing a lot, I suppose I am seeing some of the winners with people that are obviously making a lot of money on their detached dwellings, but I’m convinced that we need tax reforms to be fit for purpose. And probably there was a period a number of decades ago where those settings were perhaps correct, but I feel that they’re very out of touch as to where we are now.
The other thing I was keen to talk about before, obviously, we can jump into some of your views of the world, is I sent you an article as we were preparing for this session. And I’m always fascinated that coming out of World War Two, we had a housing deficit that’s probably higher than we have today in terms of where population growth is and demand versus supply. And it’s fascinating to know that the steps taken by both sides of government, this is labour and liberals, with creating various commissions or authorities, creating accessible finance and research bodies, and coordinating federal and state and even local government actions allowed us to build unprecedented levels, particularly of public housing, which rebalanced housing tenure and put a lot more people into homeownership. And why I’m always inspired about this is if we can all just imagine, because most of us wouldn’t have lived through this, but if you can imagine back then coming back from war and how badly distorted the markets would have been, it’s arguably much worse than where we are now. But Australia came together. Politicians and politics came together. They set dwelling targets. They recognised housing and particularly social and affordable housing as essential infrastructure, and they invested in it and built it out through different political cycles, which met the housing market property cycles. And that’s why we keep getting quoted about how high rates of homeownership were back in the ‘60s and the ‘70s, which was a legacy of decisions made 10-20 years before that. And, obviously, other decisions have been made since then, and that’s the reason why we’ve had falling levels of homeownership.
So, I’m interested in your views. If you’ve done any work in this space, if you’ve spoken to anyone else, are there lessons that we can and probably should be learning and replicating given we’ve done this in Australia before?
Mark: Yeah. It’s always great to be able to point at something and say there’s a point of proof here. It’s been done. And what strikes me is that what’s needed at the moment is two speeds of change. There’s the things that can be done here and now to make a difference and get the ball rolling. And at the same time, we need that bigger structural impetus to change how we do things. Because if we sit here and only look at what the ideal scenario will look like, we’ll find it hard to build the bridges between here and there. So, we need to, at the same time, develop that bold vision of what we want the housing system to look like and what it would take to get there.
At the same time, I was working on the things that are going to get homes built in the in the next two to three years. It’s that two speed lens that we need. What I like about the last couple of years is amid all the challenge, you’re starting to see the layering converge in terms of federal government funding, state government targets, attempting to lever that down into local authority targets to a degree in Victoria and New South Wales and so on. It’s not quite coming into line, but you can see that there is the prospect that it could. I think what we’ve talked about consistently is to achieve that bold vision, you need not one person doing something, not one intervention, but you need all of the settings working in partnership with one another. You need the tax, you need the planning, you need the productivity and construction, you need the labour and materials, you need a bit of financial stability from the market funding side, but also the government funding side. If those are combined into one string that’s pulling us closer to that bold vision as opposed to the multi direction tugs of dental floss that we’ve got at the moment, it’s a far more rewarding set of outcomes that we’re going to get. So, I absolutely think we need a national bipartisan or whatever you call it, independent agency that is entirely focused on delivering housing and pegging that to the infrastructure that is being delivered.
Richard: Yep. What are your thoughts, modern methods of construction, prefab, modular, or what other work are you doing that you would like our listeners to be aware of that could address the housing crisis?
Mark: Yeah. That’s a good one, Richard. People have spoken about prefab and modular modern methods of construction for a long time. I was thinking about this. Someone gave me another analogy, that if we were not making houses, but we were making biscuits, how would this look? And you say, at the moment, the food standards are different in every suburb, essentially.
Richard: I love this analogy.
Mark: Not at state level. The food standards are different. You don’t know what size of biscuit you can produce or what can go in it in different jurisdictions. We’re not really running a central factory here, are we? We’re turning up with a bunch of ingredients and putting them together per biscuit, not by package. And if someone’s building a giant cake down the road, all the butter and sugar’s going over there, your costs have gone up, and it’s all going a bit weird. To me, it’s a reminder that whilst you’ve got to have some quality and inspiration in the homes that we’re building, we’re not anywhere near a cookie cutter approach to housing. We talk about that in terms of houses looking the same and being the same design to a degree, but not really in the production sense.
If we are really struggling from a pull away from the housing system for labour and for materials, what are the things that can be done to bring that efficiency into that system? So, yeah, more prefabricated and modern methods of construction, whether that’s holistic or the kit of parts approach that the CRC 4.0 crew talk very eloquently about. That’s a big part of this. But there’s also the inputs on the labour side as well to say, what are we doing on training? What are we doing on migration to funnel the skills we need in the short term for delivery, but also for the innovation and change that comes with the modern methods movement.
Richard: Great. Look, Mark, we have got through a lot today. I know we could speak for the next five hours about all these issues. Is there anything else you wanted to leave our listeners with, in terms of ideas outside of the box thinking to start to address the housing crisis?
Mark: The biggest thing for me is for all of us to think through why are we choosing to leave people out and what are the consequences of that. And to say this is really about creating the future society that we want in Australia. It has got so much going for it. Nobody has nailed this in the world that I can tell. You can take bits and pieces that people do well, but nobody has really nailed this issue in my opinion. So, we’ve an opportunity to think through what do we want our housing market to look like? What’s the role that we can each play in moving us closer to the ideal?
Richard: Great. I’ll loop in and also say I’ve done a lot of studies overseas to understand what’s happening overseas with different housing markets and who’s doing the best or the worst in terms of addressing it. And you’re right. It has not been resolved, and I suppose we do need to keep that in the back of our minds because perhaps we do get wrapped up in Australia or in Melbourne or New South Wales or wherever people live about what’s happening on the ground there. But more broadly, this is a global phenomenon. I do a lot of work and speak with people in London, for example, and there’s a huge housing crisis there. It is certainly coming together and learning from one another, data and information sharing, and that’s, I suppose, the theme of today’s podcast is that sharing and that knowledge education. I’ll close off today’s session by reminding everyone that it is an incredibly difficult and complicated problem, but I don’t believe that we need to be and I’m not saying that we are, but we must not be shying away from the problem.
Your point about the haves and the have nots and why we are potentially excluding some people, perhaps people might turn and go, well, we didn’t think of it that way, and they probably didn’t in their defense. But the reality is that’s what’s happening. Maybe if we have that mindset change and we go, how can we be more inclusive to get a roof over everyone’s head? Because, fundamentally, that is what a lot of this is about. We need to think about it differently and perhaps even draw in ideas and inspiration from other industries that have perhaps addressed similar sort of crises.
But, anyway, look, I’ll leave it for today. I’ll put Mark’s details in the show notes. Please do reach out to him if you’re not already aware of who he is. You often do see him in the paper, or you see him doing some great work for some of the industry bodies. And, certainly, I’m a massive fan, and I read as much of it as I can because I learn a significant amount. So, thank you again for coming on, Mark.
Mark: And thank you very much. It’s a real pleasure to join you and swap ideas, it’s brilliant to do that with someone like yourself. Thanks so much.
Richard: Thank you very much.
Hi, everyone. I hope that you enjoyed the discussion between Mark and myself on the housing crisis and how to start to address the root causes of the housing crisis. The three key takeouts that I’d like everyone to take away from today and think about in their daily lives are as follows.
The first one is there are no easy wins. If we are living in a society under assumptions that there’s going to be easy wins and that the housing crisis is going to be resolved overnight, I think that we’re going to be very, very sorely disappointed. It’s going to take a number of years and even market cycles, 10-15 years, to resolve the housing crisis. And that’s assuming that we can start doing or carrying out significant reforms to tax or to housing or to labour, and then also with various incentives in the market. That’s just the nature of how our housing market works. I would encourage everyone to have that longer term view, and it needs to be a view that transcends politics, transcends political cycles, but also even transcends across more than one housing market cycle. I think that’s absolutely critical to think about it in that way.
I loved Mark’s question. That certainly challenged me, and I think it should challenge everyone about what a good housing system should look like. It’s very clear to me that there’s a number of stakeholders in the industry that work in silos. They’re incentivised to work in silos. It’s not their fault. But there needs to be more cross-pollination of ideas, and we need to take a much more holistic view of the housing market. And that’s not just at a state level, it’s at an Australia level. And again, we have to remove the politics out of all of this to achieve the goal of what a good housing system ought to look like.
The final point that I thought I’d make, and whilst it is a bit controversial for certain people in the industry, I thought Mark articulated it very well. And that applies to the Great Australian Dream. I think that his points about there being more than one Great Australian Dream is absolutely brilliant. If we think about it, everyone through their lives has lived in different forms of housing with different bedroom types, and they’ve rented or they’ve owned, and then they’ve aged through different dwelling types as their family circumstances change. They either have families and they have kids. Perhaps then kids move out of home. Maybe, unfortunately or sadly, one of the partners dies. Different household types need different types of dwellings. And I think we’re being a little bit too one dimensional now to say that there’s a single Great Australian Dream. I think a better way and a more fit for purpose and a more 2025 view of things is to go, there is more than one Great Australian Dream. And that ties into the logic and the narrative of having additional and diverse forms of dwellings. And people can rent, or they can own. They can live in different types of dwellings in different locations and still live the Great Australian Dream. I think that’s really critical. That also needs to then tie back into Mark’s challenge to us all about what a good housing system will look like. Anyway, I’ll leave it there. I hope that you certainly got a lot out of this episode.
Please reach out to either myself or Mark, if you’d like to discuss anything further. Thank you very much.
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