Housing Crisis to Take a Generation to Fix, NAB Warns

Australia's housing affordability crisis is unlikely to be resolved for decades, according to a stark assessment from one of the country's biggest banks. NAB's chief economist has warned the crisis will take "the better part of a generation" to fix — a prediction that drew sharp political debate on Thursday morning.

Shadow treasurer Tim Wilson and independent MP Dai Le joined the discussion as pressure mounts on governments at both levels to act. The conversation came as the Batler Group, a major residential builder, met with creditors on Thursday, leaving around 2,000 homes in limbo and a further 11,000 in the pipeline at risk of never being completed.

"These are people who have put deposits into off-the-plan purchases," Le said, describing the impact she witnessed during recent door-knocking in her electorate, where 45 per cent of residents are renters. "The cost of housing is what people are telling me about at the door."

Both politicians pointed to government taxes as a key driver of unaffordability, with figures suggesting levies — federal and state combined — can account for up to 48 per cent of the cost of building a new home. Le argued that meaningfully reducing those taxes would be one of the most direct levers available to bring prices down.

Wilson was direct in his criticism of Labor's approach, accusing the government of proposing higher taxes on small construction businesses at the very moment more supply is needed. "If you add higher taxes onto building companies, it doesn't increase the chance they go and build more houses," he said. He noted that recent house price falls had been concentrated at the top end of the market, with entry-level and first-home-buyer stock still beyond reach for many.

On skilled labour — widely seen as a critical bottleneck — Wilson said a coalition government would refocus the migration program on the trades Australia needs for its national interest, though specific numbers are yet to be finalised. "The balance is out of whack right now," he said.

Le agreed more tradespeople were urgently needed but stressed that supply-side fixes alone would not ease the pain for renters and buyers already stretched. With another interest rate rise now flagged as a possibility, she said the compounding pressures on households were severe.

Separately, the pair clashed over the coalition's proposal to reduce tobacco excise as a way to undercut the illicit tobacco market. The Australian Medical Association labelled the plan reckless, warning that cheaper cigarettes could push smoking rates higher. Wilson rejected that framing, arguing that cigarettes are already affordable on the black market — they just generate no tax revenue and are sold by criminal networks firebombing small businesses across Melbourne and Sydney.

"The government handed the trade to organised crime gangs," Wilson said. "They're not paying any tax and they're not worried about the health of Australians." Le acknowledged the crime problem was serious in her south-west Sydney electorate, where an illegal shop near her office sells packets for $10, but said the health trade-off needed to be weighed carefully alongside the law enforcement response.

With builder insolvencies rising, taxes eating into construction margins, and interest rate relief still uncertain, housing analysts and politicians alike appear to agree on one uncomfortable truth: there is no quick fix in sight.