HA Housing Insights: A builder perspective on the housing crisis
“The stamp duty savings and interest rate drop will help, but they are only one piece of the puzzle”
In this HA Housing Insights series, our social and affordable housing team speak with key industry experts – including developers, builders, community housing providers and property and tax specialists – to gain a well-rounded perspective on the challenges faced in delivering housing outcomes and potential solutions.
In our previous snapshots, we gained some valuable insights from Michael Myers, Chair of Housing All Australians, and Jesse Radisich, Director of the Victorian JLL Capital Markets – Development Team.
In this instalment, we speak with Jessica Jones from Balmain and Co to gain insight from the builder perspective on the affordable housing crisis. Jess is the Head of Strategy and Business Development and has been with Balmain and Co since 2015 when it was a small business of about 5 people. Balmain and Co now have 100 staff across Brisbane and Melbourne and have completed projects in many sectors, with residential apartments being their bread and butter.
Jessica Jones
Head of Strategy & Business Development
Balmain & Co
balmainandco.com.au
Q. Talk us through a recent affordable housing project you have been involved in. How did you get involved in this project and what key insights were gained throughout the process?
A. Our first key appointment in the affordable housing space was with Launch Housing on a project in Bellfield. We were the successful tenderer which was completed by an external project management company. Our experience in multi-level residential housing along with our design expertise allowed us to find an innovative solution to a hybrid timber structure on the project, which was a key factor for the project. After this, we then won the tender for a much larger, multi staged mixed use development site which was a public-private partnership between government surplus land and a private institution in MAB Corporation.
This project valued at over $100m gave us an opportunity to work with Homes Victoria, Housing First and Nightingale Housing which has now set us up as a leader in the social and affordable housing space.
Given the scale of this project, the key challenges came from delivering through the post-Covid era through subcontractor liquidations and construction cost escalations. We were able to work with these organisations to complete the project ahead of schedule despite these challenges.
Q. From the builder perspective, what are the biggest obstacles to increasing housing supply right now in Victoria and do you see any potential solutions to overcoming these obstacles?
A. Unfortunately, Melbourne is struggling to compete with our east coast competitors in Sydney and Brisbane who are achieving much higher sales rates, resulting in projects being unreadable with the costs of construction, land and finance. The stamp duty savings and interest rate drop will help, but they are only one piece of the puzzle.
Planning is becoming increasingly difficult, so planning schemes to assist projects getting additional levels as well as fast tracking developments to assist in reducing holding costs will also benefit the housing crisis.
On government projects, fast tracking these through planning with additional levels and government funding will assist in these projects getting off the ground much quicker than what’s currently happening. Streamlining designs with value management incorporated from the beginning will also assist greatly.
Q. Are there any incentives or housing policies that could be implemented by the government to support builders in delivering more housing?
A. Planning changes to assist in additional levels and fast-tracking developments as well as more streamlined designs to help with construction costs would assist in delivering more housing.
Q. In recent years you made the strategic move to expand your operations to Queensland. What drove that decision and are there more opportunities for builders in Queensland?
A. We saw the opportunities with the Brisbane market both in a shortage of builders and projects commencing much quicker than in Melbourne. We were also afforded some great opportunities with existing clients which gave us the confidence to expand the Queensland operations organically.
Working through an extensive early-contractor involvement period there also allowed us to build relationships with subcontractors which was one of our key concerns moving into a new market.
The information provided in this article is for general informational and conversational purposes only. While we strive to ensure the accuracy and relevance of all content, we make no guarantees about the completeness, reliability, or suitability of the information for any particular purpose. The views and opinions expressed in this article or associated materials are those of the respective contributors and do not necessarily reflect the views of Harwood Andrews or any of its affiliates.
This article is the third in a series of Housing Insights. Follow us to be notified when the next instalments are released.
1st instalment: HA Housing Insights: A Policy Perspective - Q&A with Mike Myers, QLD Chair of Housing All Australians
2nd instalment: HA Housing Insights: Housing market overview with - Q&A with Jesse Radisich, JLL
Continue reading:
4th instalment: HA Housing Insights: A lender’s perspective on the housing crisis - Q&A with Bruce Wan, MaxCap Group
5th instalment: Brian HA Housing Insights: Tax Considerations for tackling the housing crisis - Q&A with Brian Farrelly, Pitcher Partners
6th instalment: HA Housing Insights: A developer’s perspective on housing solutions - Q&A with Tim Copley, McNab
For more information or to be featured in our HA Housing Insights series please contact:
Briget O’Callaghan
Principal Lawyer
0457 117 925
bocallaghan@ha.legal
Evelyn Zeglinas
Associate
03 5225 5245
ezeglinas@ha.legal
