Latest / 360 with Katie Woolf / Master Builders CEO Dave Malone on why new home builds are down in the Top End

Transcript

Master Builders CEO Dave Malone on why new home builds are down in the Top End · 360 with Katie Woolf

• 0:00
  Speaker 1: Now, we did speak a little bit earlier this morning
• 0:03
  Speaker 1: about the real estate market and how things are going
• 0:05
  Speaker 1: at the moment with the latest Core Logic figures coming out,
• 0:09
  Speaker 1: but joining us on the line to talk a little
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  Speaker 1: bit more about the new home starts or new home builds,
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  Speaker 1: I should say, from Master Builders it is Dave Malone.
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  Speaker 1: Good morning to you.
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  Speaker 2: Dave, Good morning Katie. How are you?
• 0:21
  Speaker 1: Yeah? Really well, always great to have you on the show. Now, Dave,
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  Speaker 1: I know that the Fidelity will those certificates, the new
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  Speaker 1: Fidelity certificates they come out, well, it sort of goes
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  Speaker 1: back a month or so, and those latest numbers show
• 0:36
  Speaker 1: that the reality is that there's just thirty three new
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  Speaker 1: Fidelity certificates for houses, units and extensions across in Northern
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  Speaker 1: Territory for the months of April. How does that compare
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  Speaker 1: to other years and other months, Well.
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  Speaker 2: Katie, certainly it's a long way down on what we
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  Speaker 2: would have seen twelve months earlier. The truth of the
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  Speaker 2: matter is the housing market has been pretty subducted, to
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  Speaker 2: be honest, for a while now. We've talked about it
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  Speaker 2: before government's removed the buyer incentives. There's been some challenges
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  Speaker 2: around land and some prices have gone up with materials,
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  Speaker 2: so the housing market's getting whacked a bit from all dimensions,
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  Speaker 2: and we're seeing it in the number of people signing
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  Speaker 2: up for new contracts and so, Dave, what.
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  Speaker 1: Does it mean, you know, when you look more broadly
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  Speaker 1: at the way that we're trying to grow the Northern
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  Speaker 1: Territory's economy, we're trying to grow the population. What do
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  Speaker 1: you think it means in that sense when we're not
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  Speaker 1: seeing these new home builds.
• 1:35
  Speaker 2: It's a real challenge, I think for us. The truth
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  Speaker 2: of the matter is home ownership is actually quite low
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  Speaker 2: in the territory in comparison to elsewhere in the country. So,
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  Speaker 2: you know, one of the first challenges when you want
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  Speaker 2: to grow an emerging economy like ours is you've got
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  Speaker 2: to convince people to put down routes, and the best
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  Speaker 2: way to do that is to get them to build
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  Speaker 2: their own home. So it's certainly a handbrakeer on development.
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  Speaker 2: We're certainly not building enough homes for what looks like
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  Speaker 2: coming out our way over the next few years as well.
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  Speaker 2: And you know, we chop and change in terms of
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  Speaker 2: the sort of policy that sits around new home ownership.
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  Speaker 2: You know, we very strongly believe we should have targets
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  Speaker 2: for home ownership in the NT and we should put
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  Speaker 2: all the you know, the various elements together to make
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  Speaker 2: sure we achieve it.
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  Speaker 1: So what would that look like, Dave, Well.
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  Speaker 2: We'd say, for example, we should set a target, like
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  Speaker 2: you know, at the moment, home ownership in the territories
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  Speaker 2: around fifty percent. Elsewhere in the country it's around seventy.
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  Speaker 2: So we should set some targets around saying we really
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  Speaker 2: want territories to put their roots down and start to
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  Speaker 2: put proactive policies in place. To do that, we've got
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  Speaker 2: to get land released out far more quickly, and the
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  Speaker 2: government did a review last year if that, though we
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  Speaker 2: don't know where that is right now, but it's so
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  Speaker 2: slow to get service land or titled land available that
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  Speaker 2: even if homeowners wanted to go out and buy a
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  Speaker 2: brock of land today it's a real struggle. So we've
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  Speaker 2: just you know, we've got a clunky system right now.
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  Speaker 2: We think there should be some focus targets and much
• 3:01
  Speaker 2: faster land release.
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  Speaker 1: Well, and it's something that land release, I know that
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  Speaker 1: it is something that well, the former Chief Minister Michael
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  Speaker 1: Gunner had flagged at I can't remember what speech it was,
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  Speaker 1: but it is something that he'd flagged earlier in the years,
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  Speaker 1: saying that they did want to get a number of
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  Speaker 1: those pieces of land wealth serviced and ready to go
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  Speaker 1: so that people could build on them. But how far
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  Speaker 1: off are we from some of that land actually becoming available?
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  Speaker 1: Do you reckon?
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  Speaker 2: Well, the land comes out and it's in trims and drabs,
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  Speaker 2: because the current arrangements require the developer to go through
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  Speaker 2: a very linear process, you know, the step by step
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  Speaker 2: by step. When Dick god was asked by the Chief
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  Speaker 2: Minister to look at land release, he made a series
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  Speaker 2: recommendations over twenty in fact, and you know, we saw
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  Speaker 2: that report that he put out last October and we
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  Speaker 2: wrote to the previous Chief Minister and said, gee, it's
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  Speaker 2: a good idea. Let's get stuck in. Yeah, but we
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  Speaker 2: haven't really heard too much more since then. We've got
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  Speaker 2: to be able to do You have to be able
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  Speaker 2: to go for a drive through a new subdivision, say
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  Speaker 2: I like that block of land and buy it, not
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  Speaker 2: wait a year or longer to get a title before
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  Speaker 2: you can start building.
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  Speaker 1: So what are some of the issues in our way
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  Speaker 1: at the moment when it comes to you know, when
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  Speaker 1: it comes to housing and building new homes, obviously that
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  Speaker 1: land release is an issue. Are things like supplies having
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  Speaker 1: an impact at the moment, by sure, And.
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  Speaker 2: Let's be honest, it's just a default problem from COVID.
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  Speaker 2: It's no one else's fault. We just had shortages of supply,
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  Speaker 2: and so builders who could normally knock a home out
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  Speaker 2: twenty weeks or so are taking much longer just simply
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  Speaker 2: because they can't get hold of the materials. But as
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  Speaker 2: things as we get further away from COVID, that is
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  Speaker 2: settling down. But it has definitely been an impact for
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  Speaker 2: builders for some time. And you know, that's just delayed
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  Speaker 2: everything for people, and it's put incredible pressure on the
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  Speaker 2: building and the homeowners as they've watched those prices escalate
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  Speaker 2: as well. I just had my fingers crossed. Now that
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  Speaker 2: you know things supply chains are starting to settle down,
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  Speaker 2: and you know what we've seen is, you know, in
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  Speaker 2: terms of price rises are the worst and it's behind
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  Speaker 2: us now.
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  Speaker 1: Well, and Dave just going back you know to the
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  Speaker 1: Fidelity Fund will to those certificates and the fact that
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  Speaker 1: it's thirteen less certificates or twenty eight percent down on
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  Speaker 1: the month before, So we're talking April twenty twenty two,
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  Speaker 1: So for March twenty twenty two, it's thirteen less than that.
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  Speaker 1: Then we also know that if you compare it to
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  Speaker 1: April twenty twenty one, it's nineteen less certificates or thirty
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  Speaker 1: six percent down on that same month the year before.
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  Speaker 1: You know, it doesn't sound like a huge number, but
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  Speaker 1: there is no doubt that that would be having a
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  Speaker 1: massive impact on the industry. I would suspect it.
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  Speaker 2: Does, and the volatilities is as Chow has anything else.
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  Speaker 2: To be honest, you know, if you're whether you're a
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  Speaker 2: contractor you know, like a subcontractor working on site or
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  Speaker 2: the home builder signing a contract with the homeowner, if
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  Speaker 2: you know, if it's up and then it's down, and
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  Speaker 2: particularly when it's really flat, that's really challenging for everybody.
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  Speaker 2: The housing market in the territory. We need to just
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  Speaker 2: take a fresh look at it and go, well, we
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  Speaker 2: need a certain number of homes going forward, and what
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  Speaker 2: can we do to put the right mechanisms and incentives
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  Speaker 2: in place. Otherwise you're going to keep seeing those reports
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  Speaker 2: say one month we jump up and next month it's down. Again,
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  Speaker 2: and you know that's not good for anyone.
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  Speaker 1: And when you talk again more broadly about the economy
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  Speaker 1: and growing the territory, you know how big an impact
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  Speaker 1: could this have?
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  Speaker 2: Huge, Codie, all the research says that if you want
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  Speaker 2: to get the economy kicking along, you put opportunity and
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  Speaker 2: incentives into the housing market, because that money spins through
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  Speaker 2: the economy faster than any other active We saw that
• 7:01
  Speaker 2: through COVID, didn't We remember the trading scheme and how
• 7:04
  Speaker 2: quickly that renovation works spun through the economy. It's exactly
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  Speaker 2: the same for house building, and it provides a lot
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  Speaker 2: of work for people in what's called the cottage industry.
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  Speaker 2: You know, those small one or two person businesses, Mum
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  Speaker 2: and dad or partners. That's how they eventually go into
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  Speaker 2: the really large companies that we see around town doing
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  Speaker 2: commercial work. They've all got to start somewhere, and the
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  Speaker 2: residential sectors where many of them start, Dave.
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  Speaker 1: What could some of those incentives be, What could some
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  Speaker 1: of those things be that we could look at reintroducing
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  Speaker 1: to the Northern territory or news schemes.
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  Speaker 2: I think you've heard me bang on before, Cadie about
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  Speaker 2: how hard homeowners get taxed. The homeowners get taxed. You know,
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  Speaker 2: the average home has a GST build of around fifty
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  Speaker 2: thousand dollars on it. They've got stamp duty bills of
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  Speaker 2: another twenty thousand or so. Government takes a clip on
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  Speaker 2: a lot of the land because it owns the land.
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  Speaker 2: So people are playing a lot of money, you know,
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  Speaker 2: seventy eighty ninety thousand dollars in taxes of one shape
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  Speaker 2: or form or another. And my view is we're all
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  Speaker 2: going to be better off if we just turn a
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  Speaker 2: bit of that tax back into supporting the homeowners to
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  Speaker 2: get started, to get their deposit together. So and I
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  Speaker 2: think build bonus that we had before was fantastic. The
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  Speaker 2: government dropped it. It should never have done that. That's
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  Speaker 2: probably the starting point for anything that we do now
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  Speaker 2: is give first home buyers in particular a leg up
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  Speaker 2: to get that deposit.
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  Speaker 1: Well, Dave Malone, the CEO of Master Builders here in
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  Speaker 1: the Northern Territory, it's always good to catch up with you.
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  Speaker 1: Thanks so much for your time this morning.
• 8:39
  Speaker 2: Thanks Katie, have a good day you too.