The good news is that property prices have fallen across all major Australian capital cities, providing sweet relief to young first home buyers clamouring for a lifetime of mortgage slavery.
The bad news is that property prices have fallen across all major Australian capital cities, bringing crippling anxiety to newer home owners facing negative equity risks and threatening to put a dampener on economic activity.
Such is the double bind Australia faces. Around 68 per cent of our net household wealth is held in real estate, a figure that dwarfs the numbers in comparable Anglosphere countries. The two-thirds of Australian households that own homes don’t mind too much if the value of what is usually their primary asset increases. And yet, house prices have risen an extraordinary 400 per cent since the turn of the millennium, leaving a generation feeling that the ladder is forever beyond reach.
The best way out of our double bind, however, is to increase supply, a key target of both state and federal governments. We should all want to be YIMBYs to aid that cause.
Unfortunately, the people we have entrusted to “build, baby, build” have hardly showered themselves in glory of late. Last week, Bathla Group, the biggest builder of affordable housing in NSW, went into administration, owing debts of $3.3 billion. It looks destined to be liquidated altogether.
The group had built a private-credit fuelled residential property empire targeting lower-income, aspirational families across Sydney’s outer suburban fringe. Its collapse threatens to leave hundreds of buyers who purchased off-plan units in the lurch, uncertain if their homes will ever be built, while also heaping more pressure on Premier Chris Minns’ housing agenda.
NSW is expected to miss its housing target of 75,000 new dwellings by 40 per cent. Bathla’s collapse, which will affect around 5 per cent of properties anticipated to be built in the state this year, will only make this harder.
Victoria is building more, but apartment construction is well short of what the Andrews Labor government foresaw in 2023 when it announced a target to build 800,000 homes by 2034.
And yet, Bathla Group is hardly the only developer bringing bad press to the sector. For weeks now, the Independent Commission Against Corruption’s Operation Rosny has picked over alleged illegal donations from fugitive property developer Jean Nassif to branch-stacking Liberal Party apparatchiks.
Nassif, who once called himself the “number-one developer builder on the face of the Earth”, and first garnered infamy for buying his wife a bright yellow Lamborghini, has been hiding out in the mountains of Northern Lebanon since 2022, fleeing an arrest warrant on allegations of serious fraud. His Toplace property empire collapsed in 2023, owing over $1 billion.
Property developers make for easy scapegoats. In reality, given the supply crisis, there has never been a more important time for the good kind of developers. Whoever they may be.
Nor should developers be singled out, when the entire property sector is rife with rubbish no matter which way you look at it. An investigation by this masthead last year found that almost half of all property sales at auction go for 10 per cent above the guide, thanks to an epidemic of duplicitous underquoting by real estate agents. Sydney’s highest earning agent was recently slapped with a 10-year ban over systemic unlawful, improper and dishonest conduct. The all-powerful construction union had been infiltrated by organised crime in several states, as this masthead revealed.
This is all particularly galling given that the housing market has become such an all-encompassing, unhealthy obsession. A 2019 report found that Australians spent twice as long – 2.5 hours a week on average – researching property than we did at the gym. A new marketing campaign for REA Group, the real estate advertising platform owned by Delaware-based News Corp, called real estate fixation “more Australian than chicken salt and public holidays”. They’re probably right.
But this fixation has put us at the mercy of people who have let us down time and time again. We have been let down by governments who have bumbled their way into an affordability crisis. By developers up to their eyeballs in debt. By NIMBY councils who have fought tooth and nail to stop much-needed development. By strata managers who have overcharged apartment owners with the left hand while pocketing generous kickbacks with the right.
Australians have placed so much of their everything in the property sector. What a shame that it is so full of rot.
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Kishor Napier-Raman is a senior business writer for The Sydney Morning Herald and The Age. Previously he worked as a CBD columnist and reporter in the federal parliamentary press gallery.Connect via X or email.From our partners
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