The type of housing cost that just soared 75 per cent in five years
The cost of land for housing development has skyrocketed by 75 per cent over the past five years, pushing homeownership further out of the hands of average potential buyers.
The median development site cost has risen from $4.8 million in 2020, to $8.5 million this year, Ray White analysis of Real Capital Analytics data shows.
It comes as construction costs remain elevated from their pre-COVID-19 levels, putting further pressure on affordability.
Ray White Group chief economist Nerida Conisbee said it would take considerable time before building costs fell enough to make new housing genuinely affordable for average buyers.
'Land costs haven't come back down and what's happening is developers want to build, but they can't do it affordably,' Conisbee said. 'We're not seeing the crashes in the market we previously saw so we're in a kind of holding pattern.'
In past economic downturns, rising interest rates would put pressure on some owners of development sites, forcing them into distressed sales at reduced prices. But this time was different, and Conisbee said many had built financial buffers while interest rates were at record lows, and developers have been in a better position to hold onto land.
They were also entering into joint ventures when finances were squeezed. Changes to how lenders operated were also helping developers hold on to their assets, banks were holding off on forced sales for struggling developers, and were more likely to offer relief measures.
It comes as the federal government aims to deliver 1.2 million homes in five years to address the housing affordability challenge.
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A 2021 global poll of 375 senior leaders found that in Australia, 91 per cent of respondents said they used monitoring software to keep tabs on employees working remotely. The poll commissioned by the law firm Herbert Smith Freehills found only 5 per cent of business leaders instead required employees to self-report. The reason employees can work from home – the laptop, the internet, mobile phones, Teams meetings – is also why they are so easily watched. Keyboard strokes, time in front of the computer, mouse movements, eye movements, and now, with the help of AI, even the tone of messages sent can be monitored. Kira Bomberg, marketing director for Mimecast Australia, said that before the pandemic lockdowns, her cybersecurity company looked for unusual email activity out of hours. This could be a potential sign of unauthorised access of information. Loading Three years since lockdowns ended, people have switched to hybrid work and their hours are adjusting, so looking for 'time-based' inconsistencies alone no longer captures cybersecurity risk, Bomberg says. Still, the company scans 98 million emails a day in Australia and New Zealand, and a full 1.1 billion a day globally. 'COVID saw the use of collaborative tools across businesses, the rise of Teams, Zoom, Slack,' she said. Those tools involve sharing documents and links, often with people outside the business. 'So the industry had to catch up with security on collaborative tools.' The company homes in on behavioural activities, looking for intruders who have harvested credentials, which is a very common activity. But the company also looks for 'disgruntled employee insiders'. The systems track movements of employee data and then, using a risk-scoring model looking for 'insider risk indicators', flag the employee's action for attention with the employer. Mimecast's Incydr product 'continuously' collects metadata as events are detected, the company's video says. 'Using artificial intelligence, we look for anomalies in speech patterns' of employees, Bomberg says. 'We ask: would a certain employee use this kind of language? Would he send questions to the finance team? Are these his normal greetings?' The monitoring means that every employee is subject to 24-seven surveillance – in their office and also, increasingly in the post-COVID era, in their home office, if they have one. Relying on AI to sift content can create 'false positives', Bomberg says – situations, events, exchanges are flagged as being suspicious when they are just outside normal patterns. Mimecast APAC field chief technology officer Ryan Economos says false positives aren't 'the most frequent result' and don't happen often. The company's 'focus is on identifying all forms of insider risk from employees, with the knowledge that most incidents are more often unintentional rather than stemming from disgruntled individuals', he says. While Mimecast is a human 'risk management platform' designed to provide cybersecurity, performance software does exist. In a separate, widely publicised case, Suzie Cheikho was fired from IAG insurance in February 2023 after 'the company's keystroke monitoring software detected low levels of activity while she was working remotely'. Draconian response A world of remote work has placed employers in a fog, which some have met with a Draconian response. In March, about 2000 staff at wealth management giant AMP were told to sign contracts that the finance union alleged would enable the company to carry out continuous video surveillance of them. After coming under fire for the clause, AMP eventually backtracked. 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One WA-based IT consultant related a story on Reddit that occurred at a small start-up: 'We literally had a client escalate a case to us ... where an employee joined a company all-hands meeting from her company Teams account, on her company-provided laptop, with her camera background set to the corporate branding of what turned out to be her new employer, who was a major competitor, and she was yet to even provide notice.' The legality and acceptance of employer surveillance of employees working from home is a matter of debate. Loading There is generally more public acceptance of monitoring of people in transportation, construction roles or jobs that could physically endanger people, says University of Technology Sydney labour lawyer and academic Dr Joellen Riley Munton. For that reason, the law generally accepts the employer monitoring of employees, but with limits. In NSW, workplace surveillance legislation basically 'says the employer just needs to notify people that it is, in fact, watching them and how it's watching them, and then it can do so', Munton says. Employers have always monitored employees People forget that employers have always monitored employees, she says, looking back at the industrial era, when workers toiled in factories under the gaze of bosses. 'They've always harnessed our energies, and they've controlled our time. To some extent, we've become freer of that level of monitoring by being able to earn an income without necessarily fronting up at the factory and being strapped to machines. 'But by the same token the understandable desire of employers to want to make sure you're actually earning your salary means that they're introducing surveillance means. And some of those surveillance means are more intrusive than they would have once been.' 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Writing in The Conversation, RMIT lecturer Melissa Wheeler describes a paradox between surveillance and performance. 'When surveillance is enforced, employers have greater control over the work that can be accomplished by employees. But it can also signal a lack of trust,' she said. 'By definition, seizing greater control is incompatible with communicating trust.' With so many employees working at distance, fostering and maintaining a level of trust is essential, she says. But trust, as well as commitment, may be in short supply as remote working becomes standard. Croft, the veteran executive, says that 'one of the byproducts of larger scale work from home is to prove the use-case that if things can be performed outside the office, they can be performed from anywhere'. There is no longer any 'real practical difference' between working from the suburbs of Sydney or working from the Philippines, Croft said. 'Potentially you're going to be competing with people who are based in some other part of the world for a role,' he said. 'I think everybody's aware of that.'
