What's the housing market, the residential housing market telling you right now?

Yeah, I think for that, um, I'll, I'll take you back to the first half of, uh, last year, so FY26 first half.

We were really getting into a very strong market.

We had interest rates declining, obviously under supply of housing, and our, our sales were ramping up, you know, very, very strongly.

Uh, but then we had the big turn in November with inflation print.

RBA, you know, started to raise rates, three rate rises.

And what we normally see is when the rate rises start to come through, it's about a six to nine-month lag before we see that translating to sales.

[laughs]

From your perspective, what's actually stopping supply from reaching the market faster?

I'm glad you've asked the fundamental question, Sean, that is at the heart of our issues in the housing market, which is really three things.

It's supply, which is planning and production related.

It's construction workers, not enough workers to build those homes.

And then the third one is just general productivity, not just of labor force, but just the productivity decline that we've seen in building homes.

So let me talk to each.

Clearly, on supply at the moment, Australia is undersupplied right on a spot basis by about 250,000 homes.

I mean, firstly, is that right? But why is that doing so well?

Do you believe the federal budget has affected confidence among some property investors? Negative gearing obviously being removed, and changes to capital gains tax as well.

well.Yeah, I think, uh, in our part of the business, um, you know, we do master plan communities where about 70, 80% of our buyers are first home buyers or upgraders.

And what we've observed, uh, as I said, it's early days, it's the last sort of two, three months, when we look at, uh, our first home buyer percentage, it's about 40% of buyers are first home buyers.

That's pretty steady.

Um, upgraders are about 30%, and investors are 30%.

So that mix hasn't really changed quarter on quarter or quarter, this quarter compared to last year.

So it's, uh, it's still pretty early days in terms of seeing any i- impact on mix.

I mean, are you experiencing big increases in construction costs right now as well?

Do you believe the federal budget has affected confidence among some property investors? Negative gearing obviously being removed, and changes to capital gains tax as well.

well.Yeah, I think, uh, in our part of the business, um, you know, we do master plan communities where about 70, 80% of our buyers are first home buyers or upgraders.

And what we've observed, uh, as I said, it's early days, it's the last sort of two, three months.

When we look at, uh, our first home buyer percentage, it's about 40% of buyers are first home buyers.

That's pretty steady.

Um, upgraders are about 30% and investors are 30%.

So that mix hasn't really changed quarter on quarter or quarter, this quarter compared to last year.

I mean, are you experiencing big increases in construction costs right now as well?