Cracking the code: Mathew Tiller on breaking down the Budget, solving the housing crisis, and what today’s market means for agents tomorrow

This year’s Federal Budget might contain plenty of promise and big dollar signs, but it only provides half the blueprint for solving the housing crisis.

According to LJ Hooker Head of Research, Mathew Tiller, the missing part of the solution is a finite plan on how and where to build new homes and boost housing supply.

In this episode of the Elevate podcast, hosted by Kylie Dulhunty, Mathew offers unparalleled insights into the roots of the housing crisis, the impact of international migration, and pioneering solutions to clear construction backlogs.

He also reveals a trio of innovative approaches to lure private investors, enhance rental property availability, and secure housing for essential workers.

Mathew also advocates for bold stamp duty and superannuation reform, and how the humble granny flat could play a major role in the rental crisis.

He also takes a deep dive into current real estate market trends, prices, his forecast for interest rates and what agents need to do now to have a successful winter and spring.

“Until the government invests more into housing and providing the needed rental accommodation that those vulnerable households need, then it’s up to private investors, for the private market, to make up the shortfall and come to the party and provide the accommodation that’s needed. So if they tax investors out of the market, then there’s going to be a hole. It’s not going to solve the crisis, unless governments step up to the plate.” -Mathew Tiller

Kylie and Mathew also discuss:

• 2:05 – Dawn in Dubai: How Mathew launched his real estate career in the dynamic Dubai market, and the pivotal role Tim Lawless played in his journey.
• 5:12 – Decoding the housing crisis: The origins of the housing crisis, the impact of international migration, and innovative solutions to clear the construction backlog and boost housing supply.
• 11:20 – Federal Budget breakdown: Why the Federal Budget’s funding promises fall short without a clear plan on where and how to build homes where they’re needed most.
• 14:53 – Defence housing blueprint: Why the Federal Government should adopt a Defence Housing Australia-style model to attract private investors, boost rental property numbers, and ensure long-term security for essential workers.
• 18:53 – The right-sizing solution: Strategies to optimise our housing stock, including stamp duty reform and exempting sales proceeds from the pension asset test.
• 22:40 – Innovating secondary dwellings: How incentivising homeowners to build granny flats can significantly boost housing supply and use existing land resources for private rental market benefit.
• 24:28 – Landlord’s lament: Why all levels of government need to collaborate, not compete, why landlords are selling up and what it means for the rental market.
• 27:55 – Market update: Stay ahead with the latest trends in auctions and opens, high-demand buyer regions, and what current appraisal numbers mean for winter and spring.
• 29:50 – Western boom: Why Western Australia and South Australia are real estate hotspots, with rising prices and a market outpacing other states.
• 31:22 – Inflation and interest rates: Will the Federal Treasurer’s economic forecasts prove right? The impact of energy rebates and tax cuts on CPI, and the likelihood of an interest rate cut this year.

Links:

Detailed Episode Guide:

In recent years, turnover in existing homes has fallen to notably low levels, challenging the maintenance of a productive housing stock. Ensuring the housing cycle operates efficiently is crucial, and factors such as taxes, stamp duty, and government charges should not impede this process.

The Elevate Podcast: Industry Insights
Listeners are invited to tune into Elevate, the official podcast of Elite Agent, designed for real estate sales professionals, property managers, and leaders. In this episode, Kylie Dulhunty hosts Mathew Tiller, Head of Research at LJ Hooker, who shares market insights and data-driven analysis to guide agents and investors through the evolving property landscape.

From Dubai to Australia: Mathew Tiller’s Journey
Tiller began his career as a sales manager for Century 21 in Dubai during the early 2000s, a period marked by rapid construction and intense demand for off-plan housing. After three years, he returned to Australia, transitioning from sales to research under Tim Lawless’s mentorship, further solidifying his expertise.

Analysing the Housing Crisis
The current housing crisis stems from a demand-supply imbalance, where demand exceeds supply, driving up property and rental prices. Population growth, overseas and urban migration, household size reductions, and insufficient construction exacerbate the issue.

Budget Responses and Housing Solutions
Tiller examines recent budget measures addressing the housing crisis, including funding for social housing, crisis accommodation, and regional infrastructure. However, effective implementation at state and local levels remains a significant challenge.

Innovative Ideas to Boost Housing Supply
Tiller proposes several solutions to improve housing availability:

1. Defence Housing Model for Essential Workers: A scheme inspired by Defence Housing Australia could provide quality homes for essential workers, involving private investors and long-term leases.
2. Encouraging Downsizing: Reducing transactional costs and offering tax-free superannuation contributions for retirees downsizing could free up larger homes.
3. Secondary Dwellings Incentive: Promoting granny flats and backyard homes through incentives could increase rental stock in low-density areas.

The Importance of Government Collaboration
Solving the housing crisis requires collaboration across federal, state, and local governments, tailoring strategies to meet diverse regional needs.

Current Market Trends and Future Outlook
While market conditions vary, demand remains strong. In Victoria, higher listings align with slower price growth, while tight supply in Western Australia sustains price increases. Tiller predicts the first interest rate cut may come in early 2025, balancing inflation control with economic growth measures.

Advice for Real Estate Professionals
Agents are encouraged to leverage positive price growth to engage homeowners, maintaining a proactive approach as market dynamics evolve.

Summary
Addressing the housing crisis demands sustained construction, innovative solutions, and cross-government collaboration. These efforts are key to creating diverse, long-term housing solutions for Australia’s future.

FAQ on breaking down the Budget, solving the housing crisis, and what today’s market means for agents tomorrow with Mathew Tiller

1. What is the main focus of this episode?
This episode explores the current housing crisis in Australia, examining factors like demand-supply imbalances, rising prices, and innovative solutions for improving housing availability. Mathew Tiller, Head of Research at LJ Hooker, shares his insights and strategies for real estate professionals.

2. Who is Mathew Tiller?
Mathew Tiller is the Head of Research at LJ Hooker. With extensive experience in sales and property research, he offers data-driven market analysis that helps real estate agents and investors navigate complex housing market trends.

3. What key factors contribute to the housing crisis?
The housing crisis stems from:

• Population growth and increased migration (both international and urban).
• Insufficient housing construction to meet demand.
• Smaller household sizes creating higher demand.
• Challenges in translating federal funding into effective local action.

4. What solutions does Mathew Tiller propose to address housing challenges?

• Defence Housing Model for Essential Workers: A scheme inspired by Defence Housing Australia to provide secure, quality housing for essential workers.
• Facilitating Downsizing: Reducing transactional costs and providing tax incentives for retirees to downsize, freeing up larger homes.
• Secondary Dwellings Incentive: Promoting the construction of granny flats and backyard homes to boost rental stock in suburban areas.

5. How does the episode address government involvement in housing?
The discussion highlights the importance of collaboration across federal, state, and local governments. Tailoring solutions to regional markets and ensuring efficient use of federal funding are critical for tackling the housing crisis effectively.

6. What are the key trends in the current housing market?

• Strong demand across regions, despite varied conditions.
• Tight supply in Western Australia driving price increases.
• In Victoria, higher listing volumes correlate with slower price growth.
• Increased appraisal activity indicates potential growth in listings.

7. What does Mathew Tiller predict about interest rates?
Tiller anticipates the first interest rate cut may occur in early 2025, depending on inflation control and economic measures introduced in recent budgets.

8. What advice does the episode provide for real estate professionals?
Agents are encouraged to:

• Leverage positive price growth to engage with homeowners.
• Be proactive in maintaining strong client relationships as market conditions shift.