Chief executives of listed Australian companies are a fairly grey bunch these days – in the main, they are pretty cautious about what they say and always concerned about how their public comments will go down with investors, regulators and governments.
Which is why comments by Stockland chief executive Matthew Quinn about the state of the Australian property market have stood out so sharply.
In a speech to the Australian Israel Chamber of Commerce Lunch in Sydney yesterday, Quinn warned of a “timebomb” ticking in Australian society on the issue of housing affordability.
”There’s a faint ticking that I can hear and it’s getting louder,” he said in a speech yesterday.
”The fuse is burning, and current metropolitan planning strategies are inadequate for our growing and ageing population.”
Quinn’s argument is that Australia’s planning strategies are all wrong. Planning processes take too long, houses are too big (that is, not enough medium and high density housing is being built to accommodate the rising population) and governments aren’t doing enough in terms of planning and infrastructure.
The result is that house prices have shot up to levels beyond the reach of many Australians.
”The average first home buyer today cannot afford to pay the median house price – not even close,” Quinn said, using an average median house price of $485,000 as his benchmark.
Quinn’s comments bear some serious thought by entrepreneurs, who we know spend plenty of time watching the property market (mainly because homes are often used as security for business loans).
So while we’re all happy to see property price rises, there is something of a dark side to this boom.
As Quinn warns, we’re facing a situation where huge numbers of young people are unable to even get close to a being able to afford to buy a house, or are forced to go into massive debt to do so. And while he’s calling for action, I’m not sure it’s going to come very quickly.
How will an affordability crisis change Australian society, which has traditionally had high proportions of home ownership?
What impact will this have on your employees? How will their personal circumstances change and how could that affect your business?
Will this affordability crisis affect debt levels carried by Australian households? And how will that flow through to consumer spending?
These are just some of the questions the affordability issue raises for me. There are clearly challenges for Australian society and business from this problem, but there are probably opportunities too for entrepreneurs who can deliver smart accommodation solutions.
Are you worried about the affordability issue? Can you see any problems for your business on the horizon? Comment below and share your thoughts with the SmartCompany community.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
