Mirvac CEO Campbell Hanan: Get tax right to fix housing affordability

Campbell Hanan says policy to address a chronic undersupply of housing in Australia is critical to set right affordability challenges.

Mirvac CEO Campbell Hanan. Picture: NCA NewsWire / Nikki Short

CEO SURVEY 2025: FULL COVERAGE

Economy

How would you rate the momentum of the Australian economy as we head into 2025? Official forecasts have Australia trimming interest rates from the first half of calendar 2025, is that consistent with your view? What are you seeing around inflation in your own business?

We are cautiously optimistic that the market is starting to turn for the better, and we support the view that Australia will join the global easing cycle and that we’ll see rate cuts around the middle of next year. In saying that, employment remains quite tight and core inflationary remains sticky.

Within our own business, we’ve seen construction cost inflation start to stabilise, but costs remain elevated – particularly for apartments and commercial assets. This is largely due to a shortage of skilled labour, which has been the biggest contributor of cost escalation and loss in productivity, coupled with a record number of subcontractor insolvencies throughout the year. The benefit of our integrated model – where we have the design, development, and construction capability in-house – means we can fast-track designs and align procurement programs across multiple projects, and we have excellent pipeline visibility, allowing for critical decisions to be made early in a project’s lifecycle.

Outlook

What excites you heading into 2025? Are you likely to increase, hold steady, or trim your investment spend?

It’s been pleasing to see green shoots emerging in the economy, and with interest rates set to fall mid next year, we’re setting our business up for the next cycle. I’m excited about the projects that we’re delivering – across both residential and commercial – and seeing them come to life, particularly our new iconic projects in Sydney at 55 Pitt Street and Harbourside. We remain disciplined in our investment spend and manage our balance sheet prudently; we will look to do more capital partnering across our projects to improve the velocity of our capital and unlock value.

Reform

As we move into an election year, in your mind, what’s the single biggest lever that can/should be used to lift Australia’s competitiveness or productivity? This could be across any area from labour market, tax reform, training or other areas to encourage investment.

There are two significant levers that could be used to lift productivity in our industry: increased skilled migration, and reforms to planning systems and tax settings that improve the supply and diversity of housing in Australia and help to make Australia more attractive to global investment. There is a chronic undersupply of housing in Australia and policy that helps to enable new supply will be a critical part of addressing Australia’s affordability challenges.

Geopolitics

Will a Donald Trump presidency have a potential impact on your business or sector (tariffs or streamlined regulation)? Does geopolitics drive a bigger part of your decision-making?

While we don’t have any exposure outside of Australia we will be watching closely to see if new policy from any government has an impact on supply chains or global inflation, with the latter having a flow on effect to interest rates, our customers, our cost to build, and our cost of debt.

The biggest geopolitical risks to our business are supply chain issues and higher interest rates, and so we remain focused on driving down costs and improving efficiency across our business. We actively manage our balance sheet to provide protection from unforeseen events, as well as the flexibility to take advantage of opportunities in the future.

People

Has your organisation’s approach to flexible working – including working from home – evolved during the year. Is this likely to change further into 2025?

We had a strong culture of flexibility pre-pandemic, and post-pandemic we’ve established a good rhythm around flexibility and hybrid working – our employees are in the office about three days a week on average. Our diverse workforce also means flexibility looks different for different people (for example, for those who work in our retail centres or on our construction sites). We encourage all of our employees to achieve an appropriate work life balance in a way that works for our customers, for the business, and for their colleagues. It has also been encouraging to see office markets beginning to normalise, with strong tenant demand for Premium-grade, core CBD assets.

Technology

Where is your organisation along the AI journey – is it in the developmental stage, or are you now using the technology at scale across your business? If so, are benefits matching the promise?

We have an internal generative AI platform that is used by over one-third of the organisation daily, assisting with everything from creating marketing material to prompting for likely Q&A in managerial meetings. We also have a HR chatbot that helps answer commonly asked HR-related questions. We also see technology playing an important role in enhancing efficiency across our design and construction operations, while driving improved safety and sustainability outcomes across the business.