Mirvac boss warns of ‘dire’ housing supply as collapses bite

A ‘dire’ shortage of housing supply could worsen over the next five years as cash-strapped builders struggle to survive, Mirvac’s new CEO warns.

Campbell Hanan, CEO, Mirvac. Picture: Supplied

Mirvac’s new chief executive Campbell Hanan has revealed concerns about insolvencies in the construction sector amid a poor outlook for housing supply and as costs in the sector continue to rise.

On his first day as CEO, he warned the outlook for housing supply over the next four or five years is “dire”.

“That’s a product of a host of things,” he said. “The most obvious is we’re not building enough, and now we have the added pressure (in the) construction sector and subcontractor markets where the cost of doing business has increased. Often those contractors and builders have set prices in a historic framework, which they’re struggling to meet.

“Then you have wet weather making it very difficult for people to deliver projects on time, but carrying the cost of staff for another 30 per cent of the project’s life because of delays. All of those things put immense pressure on the supply side from a construction perspective.

He said recent reports of insolvencies in the construction and subcontractor markets were “the canary in the coalmine”.

“The focus historically has been on stimulating demand, and successive governments have been really great at focusing on the demand side but the challenge now is protecting the participants on the supply side because that’s where the stress is going to be next three years”.

Wednesday was a double celebration for the successor to long-term CEO Susan Lloyd-Hurwitz: the firm has just been named for the second consecutive year as the world’s most gender equitable company, beating off 4000 companies which employ 102 million people in 23 countries to top the global list compiled by Equileap.

Mr Hanan wanted to make a statement about the gender balance that has just won global recognition for the firm, taking 18 of his most senior women executives to lunch.

“It’s my first official engagement and I wanted it to be the first thing I did,” Mr Hanan said. “Diversity is part of our cultural DNA.”

Mr Hanan, who has worked at Mirvac since 2016, believes the firm’s culture is fundamental to the success of the property group.

Susan Lloyd-Hurwitz

For Ms Lloyd-Hurwitz, the Equileap win is the icing on the cake after a decade as CEO, a period where she led significant change around inclusion of women.

On Wednesday she recalled that when she began in 2012, she was often the only woman in meetings.

“I think one of the defining moments was when another executive … said to a very large assembled group of Mirvac people, ‘we’ll see how long this girl lasts’,” she said.

“It feels like a completely different place on so many fronts now. People say to me all the time, ‘this is the first place that I felt that I can bring my whole self to work. Mirvac is genuinely a place where people feel they can be authentically human.”

Ms Lloyd-Hurwitz, who is president of advocacy group Chief Executive Women, said of gender balance: “If I put my CEW hat on (I’d say) what’s good for women is good for all. It’s not a binary – good for women equals bad for men. It’s actually the single most powerful economic level we have as a country – to increase female participation in the workforce to the same level as men.

“We’ve got a long way to go. One of the most startling facts is that 30 per cent of Australian men believe gender inequality does not exist in this country. That is the highest number in the world apart from Saudi Arabia.”

Mirvac’s gender equity programs include flexible work, ongoing investment in women’s mentoring programs and close attention to gender pay parity, where it has maintained a zero pay gap for like-for-like roles for the past seven years. Then there’s Mirvac’s standard 20 weeks paid parental leave and four weeks paid partner leave. The company pays superannuation on periods of unpaid leave. The Equileap list looks at gender balance across the workforce, the gender pay gap, paid parental leave, non-discriminatory hiring and promotion, and supply chain safety.