The National Housing Finance and Investment Corporation has hosted a webinar on Australia’s housing market in 2021-22 and beyond, with Boral’s Zlatko Todorcevski on the panel.
As chief executive and managing director of one of Australia’s leading construction materials suppliers, Todorcevski was a welcome voice in a lively discussion between some of the industry’s most knowledgeable voices.
When asked how he viewed the housing market over the coming 12 months, Todorcevski was mostly optimistic.
“We saw the spike off the back of the Home Builders scheme which of course wasn’t really sustainable, but we were all very grateful as an industry to see that level of support for construction during COVID,” he said.
“But to offset that decline in detached (housing), we are seeing early stages from a lot of our customers where there’s a lot more interest in multi-residential construction and in metropolitan areas.
“So, relative to where we’ve been over the last couple of years, I would see a fairly significant rebound in multi-residential in the next six to 12 months and then continuing on for the next couple of years.”
While the Australian Bureau of Statistics recently recorded the strongest ever annual growth in residential property prices over the past 12 months – up 23.7 per cent – the 54-year-old said this affordability was quite good compared to his own upbringing.
“On the issue of affordability though, I might have an unpopular view because I’m old enough to remember mortgage rates in the high-teens back in the late 80s,” Todorcevski said.
“So yes, we are probably going to see increases in interest rates and yes, it’s a completely different environment, but I still think housing in Australia is relatively affordable – particularly as people have rebuilt their personal balance sheets over last two years.
“And yes, we will see rising rates, but I still think we’re in a much better position than we were even two years ago and I’m quietly optimistic about what the forward pipeline looks like.”
To cater for an uptick in housing demand, the Boral boss hoped construction approvals could be hastened in the coming months and years.
Unless approval times for construction of new buildings and quarries are improved, housing affordability may only continue to decline, according to Todorcevski.
“When you see planning horizons taking between six to eight years to make land available that, frankly, in many cases should be made available – that’s not helpful,” he said.
“Victoria has not approved a new quarry for 22 years. So one of the areas I’d like to see improve, if I could wave a wand, is planning approvals generally to free up more land and ensure we’ve got the construction infrastructure to support that growth.”
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