Stockland exec: More cuts are needed to boost demand
High prices and limited housing supply continue to challenge home buyers, even as demand begins to recover, according to the head of Australian property developer Stockland.
“First home buyers want to enter the market — 45% want to buy, but only 32% can afford to,” said Tarun Gupta (pictured above), chief executive officer at Stockland, during an interview with Bloomberg TV on Wednesday.
Gupta’s comments follow the Reserve Bank of Australia’s (RBA) first interest rate cut in more than four years. The central bank lowered the cash rate by 25 basis points to 4.1%, raising hopes of a housing market rebound. However, the RBA warned that further cuts are unlikely in the near term.
Welcoming the rate reduction, Gupta stressed that it would take time to impact the market and that additional cuts might be needed to boost demand.
“I think more cuts would be required to see an upswing in cyclical demand,” he said. “We are still somewhere near the bottom, cyclically.”
The head of Australian property developer Stockland Corp. said elevated prices and limited supply remain significant hurdles to home buyers even as demand shows signs of picking up. https://t.co/3ivvNefUOG
— Bloomberg (@business) February 19, 2025
Australian property values surged in the wake of the pandemic, driven by record-low interest rates and a rise in immigration. However, as the RBA tightened monetary policy, affordability declined. In Sydney, the average home now costs nearly 14 times the annual disposable income.
Gupta noted that Sydney and Melbourne, which together account for 70% of Australia’s housing market, remain significantly under-supplied.
He remained cautiously optimistic about improvements in affordability as wage growth picks up, inflation slows, and rate reductions take effect. Still, he warned that supply issues would be harder to resolve due to persistent labour shortages and slow planning approvals.
“We would really like to see a further easing of supply restrictions and fast tracking of supply of housing,” Gupta said. “But we need local governments to unlock housing supply and fast-track development.”
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