With growing attention on Sydney’s housing crisis, Natalie De Silver spoke with property specialist Gianni Musumeci on ‘The Morning Mix‘ about the impact of government policy on the property market. 

Musumeci is a property advisor as well as the director and founder of Leverage Property Advisors, a company that assists investors, first-home buyers, wealth accumulators, and retirees in finding investment properties aligned with their financial goals. 

“We are in a period of diminishing supply and increasing demand,” Musumeci said, explaining that the housing crisis has been driven by several factors, including immigration, rising construction costs, a shortage of tradespeople, and lengthy development completion times. 

Many groups have argued that reducing the number of investment properties would create more affordable housing opportunities for Australians looking to enter the market. However, Musameci warned that policies such as rent freezes could have detrimental consequences. 

Commenting on the issue, Musumeci said rising rents are not simply the result of landlord greed, but rather a reflection of increasing ownership costs. 

“If rents do go up, it’s more of a reflection of the underlying expenses behind the ownership of that property,” he said.  

“Where it no longer becomes viable, then the landlord is going to make a decision; ‘well I’m actually making a financial loss’ or ‘I’m at a detriment as a result of owning this property, therefore I’m going to let it go’.” 

Musumeci also pointed to development delays as a major contributor to the housing shortage. 

“One of the issues causing the expensive cost of developing new property is the delays — the red-tape delays,” he said.  

“There are some reports that it can take 12 to 18 months to get a DA approved in some cases to build an actual property.” 

Additionally, Australia is currently facing a shortage of tradespeople, rising construction material costs, and inflationary pressures linked to global conflicts and disruptions to shipping routes, including the Strait of Hormuz.

Have a listen to the whole interview below: