The outgoing chief executive of Australia’s second-largest bank has warned the country’s housing crisis could cripple the economy.
National Australia Bank chief executive Ross McEwan issued the stark warning in the final week of his five-year tenure at the national bank.
McEwan warned that Australia’s “critical” housing shortage would slow economic growth and the influx of new immigrants.
A record 548,742 migrants moved to Australia in the year to September, pushing population growth to its highest level since 1952, 2.5 per cent.
NAB chief executive Ross McEwan has issued a stark warning about Australia’s housing crisis ahead of his imminent retirement.
McEwan will leave his position on April 2 and plans to retire on July 1.
“We just don’t have enough (housing),” he said.
“That will slow the growth of this economy because if there are no houses for immigrants to come into, we will soon be cutting off the levels of immigration coming into the country.”
McEwan said tackling Australia’s housing crisis would improve productivity levels and in turn support the Reserve Bank’s efforts to ease interest rates.
“If we can solve (the housing problem), we can keep this economy growing at a good pace and continue to increase productivity in the market, which will make us better as we export abroad as well,” he said.
“If we don’t, well, I think Australia will slow down accordingly.”
McEwan will step down from his role on April 2 and NAB’s head of corporate and private banking, Andrew Irvine, will take over after a transition period.
Earlier this week, barefoot investor Scott Pape questioned why Australia was welcoming record income amid a crippling housing crisis.
He wrote: ‘A decent question for our politicians would be: “Why are we currently bringing in 2,000 new immigrants a day (659,800 in the last year) when the rental market is in crisis?”
The financial expert told his readers he was “not anti-immigration” or “xenophobic”, but added that the continued influx of foreign workers to boost economic growth would surely put even more pressure on property markets.
‘Our politicians like to boast that we are the lucky country that has not suffered a recession for 34 years, a record.
‘However, we have largely achieved this by bringing more people into our paddock.
‘Yes, there is more to solving the real estate crisis than immigration: there are tax exemptions that favor investors, a real lack of supply and more social housing to build.
“However, the fact is that, as things stand, overseas arrivals are outpacing new housing construction by almost four to one.”
It comes as worrying data from major construction industry groups revealed Australia will need 90,000 more businesses in the next 90 days to meet the Albanian government’s new target of building 1.2 million new homes in five years.
His comments come as worrying data from major construction industry groups revealed Australia will need 90,000 more businesses in the next 90 days to meet the Albanian government’s new target of building 1.2 million new homes in five years. .
Industry groups called the federal government’s plan, which would see the country building 60,000 new homes each quarter starting July 1, unrealistic.
One solution would be for Australia to boost immigration and accelerate the hiring of skilled tradespeople, Master Builders Australia chief executive Denita Wawn suggested.
Ms Wawn also said recognizing professional qualifications from other countries should be easier and cheaper, describing the current process as “cumbersome”.
“There’s no way… we can get 90,000 (workers) in three months unless we have a radical change in the way we view our immigration system,” he said.
“We are really focusing on the school levers, but also those who want a career change into trade,” Ms Wawn said.
“Third, as an industry, we must preserve current sectors and bring back those that have decided enough is enough.”