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Housing and rental inflation continues to spark concern

Master Builders Australia Media Release

Today’s monthly consumer price index figures from the ABS confirm housing and rental inflation trends are out of step with the rest of the economy, said Master Builders Australia Deputy CEO Shaun Schmitke.

“Australia’s annual inflation rate dropped to +4.3 per cent during November, the lowest since the start of 2022.

“Across most categories of goods and services, there was a reduction in inflationary pressures with the exception of rents, where annual inflation accelerated to 7.1 per cent in November compared with 6.6 per cent in October.

“New dwelling costs have also intensified, having risen by 5.5 per cent over the past year.

“A lack of enough new housing supply continues to impede our battle against inflation.

“Inflation is a productivity killer. There is clearly a need for renewed urgency to tackle high costs and labour shortages in the building and construction industry.

“Master Builders strongly opposes the ‘Closing Loopholes’ workplace reforms impacting independent contractors.

“Complicating contractor engagement and making it harder for trades to move between projects ultimately drives up construction costs,” Mr Schmitke said.

In more positive news, the ABS also released engineering and construction activity for the September 2023 quarter which racked up its sixth consequence quarter of growth.

Mr Schmitke added: “the total volume of work done was up by 1.9 per cent compared with the previous quarter and is now 14.3 per cent higher than a year earlier.

“Public sector projects continue to be the major driver of activity.

“During the September 2023 quarter, the volume of construction activity done for the public sector surged by 5.0 per cent.

“However, there was a slight reduction in private sector work (-0.6 per cent) over the same period.

“With our economy facing such a formidable productivity challenge, the steady accumulation of more public infrastructure will eventually lead to productivity improvements,” Mr Schmitke said.

 

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6 comments

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  1. Clakka

    A pile of utter gobbledygook from Master Builders Australia.

    Nothing can be constructed or deconstructed from the chain of broken links and hyprebole. Except as quotes maybe by some lazy amanuneses or neophyte reporters from the mainstream media.

    Simplistic trash in = simplistic trash out.

  2. Roswell

    Clakka, we just get sent the media releases from dozens of organisations.

    We publish most of them unless, regardless of our views.

  3. GL

    A great big steaming crock of crap that says eff all about adressing the, dare I say, crisis in the rental market. Most of the problems come the greedy (not all but a fair percentage) bastard real estate agencies and the even more greed driven property speculators and the political parties, not mentioning the L…cough…N…cough…P, that helped them out.

    Which reminds me of Trembles Turdball and his “hilarious joke” that parents should buy their kids houses. Oh, Trembles, be thankful that you were a politician because you would have starved to death in a very short span of time as a comedian.

  4. andyfiftysix

    I agree, a pile of nothing.
    Building a house has to be one of the most abused parts of our economy for a whole host of reasons.
    It’s ripe for disruption and I would say it’s about time.
    The only idea going is that you buy a block of land in shit creek. Build anything you can afford and nothing else matters.
    Governments on all levels want a cut. Developers make an even bigger cut. Farmland bought for a pittance is sold at astronomically inflated prices.
    Banks are slave masters changing requirements at will.
    House designs are getting worse and worse. Standard features are pretty much on the exotic side.
    Dog boxes never had so much bling.
    Banning gas is a good start in Victoria. Banning storage water heating would be a great step towards efficiency. Heating water where it’s needed only when it’s needed would save a hell of a lot of electricity.
    And that’s just the low hanging fruit.
    Insurance is another crazy issue that’s been ignored. You pay to ensure the builders liabilities are payed, not so you get a job done.
    I get it that builders are making something worth while, a roof over somebody’s head. But the direction it’s travelling in does not instill confidence in my mind. Oh by the way, your a business so the government can just add more and more layers of paper work and costs. Mind you, anyone seen to be making more money than average joe is ripe for exploitation by governments eager to raise money. I have seen first hand how much money use to changes hands in this industry.
    In summary, everyone takes a cut. You are sold a dream that in reality is slavery. The master builders are not going to rock the boat, are they.

  5. Terence Mills

    In the USA housing finance for owner occupiers can be locked in to fixed interest rates for the term of the loan or for a period of up to thirty years : this article in the SMH explains how the system works https://www.smh.com.au/business/the-economy/australians-don-t-do-30-year-fixed-home-loans-but-that-s-not-all-bad-20240108-p5evs4.html

    At the present time the Australian banks have the whip hand and are reluctant to see fixed rate loans (beyond three to five years) come into Australia. The Banks are quite happy to see the RBA adjust interest rates upwards once a month (13 interest rate rises in 18 months to November 2023) as it goes straight to their bottom line.

    If you were in the US you wouldn’t need to anxiously wait for the RBA decision on the first Tuesday of each month as any increases wouldn’t impact your repayments on an existing mortgage as you would be on a government backed fixed interest loan for up to thirty years.

    Whilst the banking lobby – and it’s a big one – would fight tooth and nail to avoid such a scheme in Australia, it is the only way that we can stimulate our building industry and ensure that all first home buyers (and others) have access to the market.

    Odd that the Master Builders didn’t mention this but I suppose they are pushing another barrow. One of the dangers of accepting industry sponsored articles on AIMN.

  6. Caz

    Dog boxes never had so much bling Priceless.

    Our first home was a tiny weekender. Priir to that, we had five moves in two years due to the shortage of rental accommodation in 1960s.

    Can’t do that these days. Someone will buy it for a fortune, demolish it and build a soulless dog box.

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