28 May 2024

Cutting migration won't solve housing crisis, says Geocon boss

| Ian Bushnell
Join the conversation
man standing on a patio

Geocon founder and Managing Director Nick Georgalis at the new WOVA development in Woden. Labour shortages are here to stay, he says. Photo: Ian Bushnell.

The ACT’s biggest developer and builder has come out against cutting migration in response to the housing crisis.

Opposition Leader Peter Dutton has been outspoken about the need to cut back on the number of migrants Australia has been taking to help ease pressure on housing, but the Federal Government is also trimming immigration after the post-pandemic spike.

However, Geocon Managing Director Nick Georgalis said the building industry was beset by challenges, including labour shortages.

“We’ve probably found the new norm today where the labour shortages that we have aren’t going to get resolved, particularly when you see the Federal Government talking about cutting migration,” he said.

“That’s not the solution to the housing crisis.”

READ ALSO Steel’s missing-middle muddle: Get on with it, say builders

It was Mr Georgalis who warned in 2021 when breaking ground on the just-completed massive four-building WOVA apartment and hotel development in Woden that the ACT faced a housing crisis.

Mr Georgalis said his prediction was taken as something that a property developer would say, but he was right.

“We saw the writing on the wall four years ago when we said there’s a housing crisis, and everyone said that we had a vested interest in that, but it was very clear and evident to us that the housing crisis was coming,” he said.

“It was actually 2019 that we came out initially and saw it, and all that happened was COVID multiplied that.”

Mr Georgalis said he did not see a solution to the housing crisis in the next 10 years.

“Not in the current climate,” he said.

Mr Georgalis said that commencements in the ACT had fallen away and there were very few new projects this year.

Although he didn’t want to criticise governments, Mr Georgalis believed they could do more to release land, reduce planning complexities and speed up approvals.

He also believed that licensing would only add to the risk developers bear and deter some from taking on developments.

While licensing would not impact Geocon as much as other businesses because it was an integrated developer/builder, others would have to weigh several commercial factors.

“If anything, I certainly think it’s going to put more pressure on the housing market because it will certainly have an impact on people’s decision-making,” Mr Georgalis said.

He added that it was a very challenging time for the industry, and not all companies had the scale to survive the COVID shutdowns, delays, shortages and increased costs.

He said that meant a smaller market, fewer companies and fewer resources to deliver more housing.

Those that had survived would be the stronger for it, and consumers would benefit.

READ ALSO Home lenders make life difficult for struggling customers who ask for help

Mr Georgalis said Geocon had spent years refining its processes, systems and training to deal with what had happened in the market in recent times.

“We’ve absorbed the cost increases, but I think the important thing to note is that we stick by a brand and certainly make sure that when someone does purchase a property off us, they do get handed over that property,” he said.

Mr Georgalis hoped that the industry was at the tail end of the shake-out that had resulted in the demise of respected and reputable companies.

“But I really don’t know. We’re very focused internally on what we do and how we deliver things,” he said.

“We know what we have for the next few years and we’ll keep growing that pipeline and keep focusing on our consumers.”

Join the conversation

All Comments
  • All Comments
  • Website Comments

lets be honest…this guy is set to profit from immigration. Everyone knows to whom he markets property to…… I’d say a vast majority of there developments are sold to new Australians. Not saying it’s good or bad…just that there is certainly a bias here and he may not be the best to comment.

Nick Georgalis nails it here. Bureaucratic red tape, land supply restrictions, investor incentives etc. are raising prices way more than immigration.

HiddenDragon8:18 pm 29 May 24

“Mr Georgalis said that commencements in the ACT had fallen away and there were very few new projects this year.”

So it’s just as well that both major parties have finally responded to what many polls have shown to be the preference of a majority of voters – i.e. a reduction in the rate of immigration-driven population growth and consequent housing demand.

If high rates of immigration were the answer to skills shortages (which we have heard about endlessly for many years), we should have solved that problem by now – putting more effort into developing the skills of the people already here (as is now happening) might prove to be more effective.

Julie Lindner2:35 pm 29 May 24

No wonder he doesn’t want to halt migration when he sells units off the plan to residents of China!

Lefty Boomer9:50 am 29 May 24

Since the 1980s , social housing numbers have dropped by 200,000 houses forcing lower socioeconomic-economic house seekers to find housing elsewhere in the open market.
Successive governments of all colours have not replaced this type of housing as it was sold to owner-occupiers and if that 200,000 houses were still available this crisis would not be facing us.

Wow, a property developer that financially benefits from exacerbating the housing shortage due to massively increasing demand for his product is all for increasing demand for his product… you don’t say.

You have a labor shortage, you don’t bring in even more people that will also require housing, and put further pressure on the highly limited supply, you incentivise more people to go into the trades. Throw public money into subsidising apprenticeships, put advertising on TV and into schools to convince young people how much money there is to be made and they WILL follow the money.

Go to university and leave with a $50-100k debt or go into an apprenticeship and make a bunch of money and walk straight into a highly paid career afterwards. For a lot of young people, it will be a no-brainer.

You’re dead right Bob. A good tradie is worth a hell of a lot more than a bureaucrat with a degree in hamster rearing, and it’s cheaper too.

I highly value my fully-qualified and certified hamster rearing; thank you .

Stephen Saunders8:02 pm 28 May 24

Yeah right, 1m migrants in 24m wouldn’t affect the rental and housing crisis.

As Georgalis says, some will think he’s just talking his book. Include me.

Keyboard Warrior7:18 pm 28 May 24

Importantly Mr Geocon said there was no solution to the current situation.
With that, it is a fair assessment that another half million migrants next year won’t help things any, yes some of them might be tradies but a greater number will settle and bring over mum and dad. I seldom agree with Dutton but migration is the leading cause of our current homelessness.

He said a lot of things as reported here, but none of his verbiage supported his assertion — that immigration and housing pressure are not linked — with any line of reasoning or evidence. So it just comes back to: yeah he *would* say that. It’s the old “experts say” trick, 99.

Capital Retro5:33 pm 28 May 24

I didn’t know Geocon were now into houses as well as home units.

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.