"Outstanding"
The Clarity Report has been with journalists, economists and policymakers for a week now. One response keeps coming back, and so does one question. “Outstanding.” That was how a federal senator responded after reading The Clarity Report, handed to him a few days earlier by Mal Cayley in person. If you’re catching up, The Clarity…
The Clarity Report has been with journalists, economists and policymakers for a week now. One response keeps coming back, and so does one question.
“Outstanding.”
That was how a federal senator responded after reading The Clarity Report, handed to him a few days earlier by Mal Cayley in person.
If you’re catching up, The Clarity Report: The Housing Case File is Mal’s two-year forensic investigation into how Australia’s housing system broke, decision by decision, over thirty years. It’s set out like a case file, with sixteen exhibits and every figure sourced. The Jury Room is where the full report lives online at theclarityreport.com.au. It’s open to everyone, free to read, with no paywall, so you can weigh the evidence for yourself.
Since the Jury Room opened, the report has made its way to journalists, economists and parliamentary offices. The feedback shares a common thread: it explains how we got here in a way people can follow, check and use.
For Mal, that matters more than the praise. That’s the real test of a report like this. Every figure is sourced and open to challenge, and it’s holding up in front of the people best placed to challenge it.
The questions are getting sharper
Good engagement brings good questions. The senator’s follow-up was about the serviceability buffer: how do you argue for a more flexible test while interest rates are rising?
The buffer is the extra margin banks must add when assessing a loan. Lenders check you could still afford repayments at three percentage points above your actual rate, and that test sets how much you can borrow.
Rising rates actually make the case. That three points stays fixed no matter where rates are. In 2021, with the cash rate at 0.10%, rates went on to rise further than the test allowed for. Today, at 4.60%, the same three points assesses borrowers at well over nine per cent. The setting was at its loosest while the risk was building, and it’s at its tightest now.
The report also ties any relief to loans that add new rental supply, with an expiry date attached. That way extra borrowing goes into homes, not prices.
Redirected isn’t built
Ray White chief economist Nerida Conisbee has been looking at whether the May Budget is steering investors towards new homes. On paper, it is. The share of investor loans going to new housing rose from 17.9% to 21.2%.
Look closer and most of that shift comes from investors stepping back from established property. For every additional investor loan written for a new home in the June quarter, around 16 fewer were written for established homes.
Then the August approvals landed. Total approvals fell 6.1%. Apartments and townhouses fell 21.2%. Detached houses rose 3.7%.
Monthly figures move around, and approvals are still higher than a year ago. But the weakness sits exactly where The Clarity Report shows the system struggles most. Around 95% of approved detached houses reach delivery. For apartments and townhouses, it’s closer to 60%.
As Conisbee put it: “Redirecting investors towards new homes is not the same as getting more homes built.”
The Budget changes rested on a reasonable-sounding idea: point investors at new homes and more homes get built. The data is now showing where that idea runs into trouble. It’s the same point in the pipeline the report has been highlighting all along.
That’s why getting the evidence in front of the right people matters.
Knowledge is the best risk management
Every risk in property comes back to something someone didn’t know. That’s true for an investor signing a contract, and it’s true for the people setting national policy.
The more people understand how the system actually works, the less room there is for decisions built on slogans.
Investors are part of the fix
Australia’s rental market relies on private investors, most of them everyday households with one or two properties. Too often they’re cast as the cause of the crisis.
The evidence points to thirty years of decisions about tax, credit, planning and construction. Investors respond to those settings. Get the settings right, and investors help bring new homes into the system.
We’re all in this together.
Your Next Step
Policy settings will keep changing. Your strategy should be built to handle that, and built around what you want property to do for you.
At Investor Property, we start with your goals, whether that’s income, long-term growth or a home for the family down the track. We help you understand how lending, supply and policy affect your path to them. If you haven’t reviewed your plan since rates moved, now is a good time to check it still gets you where you want to go.
Talk to an Investor Property Coach.
Join the Conversation
The Clarity Report is free. Read it, then share it with anyone trying to make sense of the housing crisis: a colleague, your accountant, your local MP. Join the conversation on LinkedIn, where economists and policymakers are working through these questions in public.
The people who can change these settings are listening. Let’s give them the evidence.
