Brickworks boss says housing shortage is worse than expected

afr.com:

The shortage of new housing is worse than forecast, but a backlog of construction work will support a rebound in profits at bricks and roofing producer Brickworks, says managing director Lindsay Partridge.

The building materials group posted a 54 per cent drop in net profit after tax to $395 million, even after a 7.8 per cent rise in revenues to $1.18 billion for 2022-23. But that was outpaced by expenses, with energy costs up 28 per cent at the company’s key Austral Bricks division while labour costs rose 13 per cent.

The Albanese government has set a target for 1.2 million new homes over the next five years to ease a shortage in supply which is driving up prices. But the most recent data shows residential construction in the 12 months to June 30 weakened to the lowest level in eight years at $73.4 billion.

“Work in the pipeline”: Brickworks expects a downturn in building will be short and shallow. Dan Peled

Oxford Economics, a forecaster, estimates there is already a 70,000 home shortfall, a figure which Mr Partridge said was “probably at the lighter end”.

“The deepening housing crisis is only going to get worse, with housing approvals currently at 10-year lows and population growth at a record high,” he said. “There remain fundamental issues that act as a handbrake on new home construction, such as a lack of trades, excessive taxes and a dysfunctional planning and approvals system.

“We continually hear about new home grants and subsidies, but the irony is that there are very few things in our economy that are more heavily taxed than newly constructed homes.

“If we want to deliver more homes, we need to stop the excessive taxes on them.”

Despite falling home construction approvals and the expectation that interest