Westpac chief executive Anthony Miller says Australia’s housing affordability crisis will not be solved simply by building more homes, unless supply lands in a price range that matches what typical incomes can service.

 

Speaking to host Alan Kohler on the ABC’s That’s Business podcast, Miller argued the national debate is increasingly defined by a widening gap between household earnings and metropolitan dwelling prices.

 

“We need more houses, and houses at the right price point,” he said.

 

“The median house price in major capitals is around $1.1 million, while median income is about $90,000-$95,000.” On those incomes, “the maximum purchase is roughly $600,000-$650,000.

 

“So we need more houses in the $600,000–$700,000 range,” Miller said, adding that meeting that target would require “changing how housing is approved, how construction is enabled, and improving productivity to drive more supply at the right price.”

 

Asked about the Federal Government’s ambition to deliver 1.2 million homes over five years, Miller said supply growth was essential to even have a chance of easing pressure.

 

“We need society to get to a point where people feel owning a home or apartment is within reach. Right now a large proportion of the population doesn’t think it’s realistic.

 

“You need that level of focus on supply to have any chance of solving it,” he said.

 

Regional Australia as an “unlock”

Miller said one pathway to more attainable prices was outside the major capitals, arguing regional markets could offer a better match between wages and housing costs.

 

“One unlock is regional Australia. The median house price there is about $650,000,” he said. “Encouraging more people to live in regional Australia can help.”

 

He linked that possibility to workplace shifts since the pandemic, noting “we now have more flexibility than ever to work both in the office and remotely,” which “feeds into part of the solution”.

 

“There are also opportunities for businesses to invest more in regional centres, attracting talent because people can get a job and buy the house they want in that regional centre,” he said.

 

Scams and the “cyber war”

Beyond housing, Miller said scams and cyber threats remain a daily reality for banks and customers alike.

 

“It’s an ongoing global challenge - cyber war and cyber attack.

 

“[Westpac] spent over half a billion dollars last year on cyber, fraud and scams mitigation and prevention” he said. Miller backed stronger cross-industry coordination to reduce scams, describing banks, telecommunications companies and social platforms as “one ecosystem that needs to work collectively together to stop, minimise and deal with scams.”

 

War-driven uncertainty and the cost of living

Miller also said conflict in Iran adds another layer of uncertainty for the economy, particularly through supply chains and prices - pressures that can flow quickly through to households.

 

“We’re focusing on helping small, medium, and large businesses address supply chain challenges and rising input costs.

 

“The key is how long the war goes on, and how long supply chain disruption takes to resolve,” he said, describing it as “a question of time and how quickly supply chains restore to normalise supplies and prices.”

 

While interest rates remain central to many mortgage-holders - and another rate hike would return Australia to the 4.35 per cent rate of last year - Miller suggested households are increasingly contending with multiple pressures at once.

 

“Another rate rise would return us to where we started… so it wouldn’t be any worse than last year,” he said. But, he added, “other prices have gone up - so other stresses are coming through for consumers.”