NAB boss rings alarm on housing crisis
By Millie Muroi
NAB chief executive Ross McEwan has warned Australia’s housing shortage could hamper economic growth and slow the inflow of migrants, calling it a “critical” issue in his final week at the helm of the country’s second-largest bank.
On Monday evening, in an address reflecting on his global career spanning 40 years – including five years at NAB – McEwan said a shortfall in housing was one of the biggest problems facing both Australia and New Zealand.
NAB chief executive Ross McEwan said fixing Australia’s housing shortage would support economic growth and productivity.Credit: Louie Douvis
“We just don’t have enough of it,” he said. “That will slow down the growth of this economy because if you don’t have houses for migrants to come in to, we’ll soon be cutting off the migration levels coming into the country.”
Migration added a record net annual increase of nearly 550,000 people to the country’s population in September 2023, following a period of low migration due to border closures during the COVID-19 pandemic.
Despite the Australian economy slowing under sharply higher interest rates, house prices have continued to climb, with McEwan in December warning that there had been a sharp reduction in housing affordability.
Since then, Australia’s rental vacancy rate hit a record low of 0.7 per cent in February, according to Domain. And Australian home prices have continued to rise, increasing by 1.3 per cent in the March quarter, and 8 per cent over the year, bringing prices to a record high, according to Fitch Ratings.
McEwan said fixing Australia’s housing shortage would help to support productivity growth, which has also been a key condition for the Reserve Bank to begin easing interest rates.
“If we can solve [the housing issue], we can keep this economy growing at a good pace and keep productivity lifting in the Australian marketplace, which will make us better as we export overseas as well,” he said. “If we don’t, well, I think Australia will slow down accordingly.”
The comments come as housing moves to the forefront of political debate, and as the construction industry warns that the supply of new homes would crash to the lowest level in more than a decade by 2026, leaving the federal government well short of its target to build 1.2 million houses by mid-2029.
McEwan, who joined NAB in 2019 in the aftermath of the 2019 financial services royal commission, is widely credited with turning around the company following two decades marred by mistakes, scandal and underperformance.
McEwan said it was important for banks to stay relevant to customers and remain strongly aligned with the purpose of banking: to help customers with their financial needs.
“I think the biggest challenge going forward is holding on to the great work that’s been done since the royal commission, the refocusing of all of our colleagues on to doing good things for customers...[to] stay on course and stay on target for looking after customers,” he said.
McEwan will step down from the chief executive role on April 2, with the group’s head of business and private banking, Andrew Irvine, to take over following a transition period, and McEwan to retire on July 1.
Despite the challenges facing Australia’s economy and its banking landscape, McEwan said he remained optimistic. “We’ve got so much going on for this country and people want to come to this country,” he said. “So, I think this is a place to be very optimistic about, and the same for my own country of New Zealand.“
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