‘Stupid’: Blunt warning amid RBA rate cut frenzy

An expert who has bought, sold and developed more than 2,000 properties warns the real fix to Australia’s housing crisis is being ignored amid the RBA rate cut borrowing frenzy.

JLF Group managing director James Fitzgerald, fears the real solution to Australia’s rampaging housing problem is being lost, amid more focus on driving up housing demand and prices.

Mr Fitzgerald, whose uncle John Fitzgerald built the JLF multimillion-dollar real estate empire after hitchhiking from Melbourne to the Gold Coast at 17 with $200 in his pocket, is among those calling for urgent focus on supply to fix the most critical issue facing Aussies.

He warned “it’s supply, stupid: fix supply, fix the crisis”, calling for more homes per kilometre of new infrastructure as a starting point.

He details below why the issue is causing him to lose his cool.

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JLF Group MD James Fitzgerald fears the housing crisis solution is being lost amid more focus on driving up demand and prices.

James Fitzgerald:

In 1992, Bill Clinton’s political adviser made famous the phrase: “it’s the economy, stupid”. The idea was simple: if you improve people’s standard of living, they’ll vote for you. If you don’t, they won’t.

When it comes to housing in Australia today, we need to adapt James Carville’s line: “it’s supply, stupid”.

It didn’t matter who you voted for in May’s election, Australia’s population is growing and that growth demands 240,000 new homes every year. At best, we’re managing 160,000. That’s an annual shortfall the size of the city of Wollongong.

It’s not hard to see why housing is becoming unaffordable. If we don’t fix supply, we don’t fix the crisis. Full stop.

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Mr Fitzgerald said the “demand distraction” was not helping fix supply.

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The demand distraction: A lot of the election coverage focused on first-home buyer incentives, as if handing someone a deposit magically creates a house for them to buy.

Truth be told, it doesn’t. Boosting demand without increasing supply just pushes the prices higher.

It’s like inviting more people to a dinner party without cooking more food — it just means someone’s going home hungry.

Who’s actually on the field? In its defence, the federal government isn’t the one kicking the ball. They can design policies and throw money at the problem (and they are), but when it comes to getting homes built, that job belongs to state governments and local councils.

Think of the federal government as the coach – they can yell from the sidelines, but they’re not the ones running plays on the field.

Local councils’ approvals bottlenecks were impacting housing supply.

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Follow the money (and the roads): To be fair, the Labor Government is throwing serious money around. The real headlines of the election shouldn’t have been first-home buyer schemes – but rather infrastructure investment.

The newly elected Labor government will be investing a massive $5 billion into funding roads, sewers, water and electricity networks that make housing projects viable.

Even better, it plans to reward states that hit housing targets, funnelling $3b of their commitment directly to those who do.

That’s smart. Without infrastructure, land is just dirt. With it, it’s a development site.

The approvals bottleneck: Even if we had the infrastructure tomorrow, we couldn’t build 240,000 homes because we aren’t even approving that many.

Housing approvals have been in steady decline since 2014, the last time we even approved 240,000 homes. Last year, we approved just 170,000 homes. That’s not enough runway for the construction we desperately need.

Only 170k homes were approved last year, compared to a need for 240k annually.

Why the shortfall? Let me explain that – there are two reasons: Red tape – state and local governments aren’t aligned; and lack of urgency – approvals don’t seem to be a performance metric for local councils.

You have to wonder: does anyone at council knock off on Friday and ask, “How many homes did we approve this week?”

Progress, not perfection. Here’s the silver lining: we’re moving – slowly – in the right direction. In 2024, we built 168,049 homes. That’s up 2 per cent year-on-year. Still well below the target, but a step forward, nonetheless.

And with billions of dollars now earmarked for unlocking land, improving infrastructure, and rewarding states that hit building targets, we’re finally seeing the political will to match the scale of the problem.

Density and infrastructure need to go hand-in-hand Mr Fitzgerald said.

The real fix? Density and infrastructure. Eventually, governments will realise the solution isn’t just more houses — it’s more homes per kilometre of infrastructure.

We need denser development near existing roads, pipes, and power. We need denser development around the expensive new roads, pipes and power that we do build.

New South Wales is leading the charge on this front, taking back the planning powers from some local councils who couldn’t approve enough housing in and around key transport infrastructure.

It’s not radical. It’s not ideological. It’s just economics, stupid.

* James Fitzgerald is a respected Australian property expert with more than a decade of experience in residential and commercial real estate. He is the managing director of JLF Group.

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