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Standing Committee on Tax and Revenue
Housing affordability and supply in Australia

MURRAY, Dr Cameron, Private capacity [by video link]

CHAIR: I now welcome Dr Cameron Murray to give evidence today. In what capacity are you appearing before the committee?

Dr Murray : I'm appearing as an independent researcher, but I do work for the University of Sydney.

CHAIR: This hearing is a legal proceeding of the parliament. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. It is important to note that although your evidence is protected by parliamentary privilege this protection cannot be enforced outside Australia. I invite you to make an opening statement before we proceed to discussion.

Dr Murray : I think I'm one of the few witnesses who's actually worked for residential and industrial property developers in government departments dealing with the infrastructure charges and regulation. I'm now a housing researcher, so I think that gives me a particular insight. The main thing I want to get across today is that Australia now has more, bigger, better dwellings per capita than at any point in history. We're also building new dwellings at a near record pace in a period when population growth is the lowest it's been in decades. More housing is better than less housing—absolutely, I agree. The argument I disagree with is that private landowners want to build faster, but only pesky council and state government red tape is slowing them down.

While I certainly have many ideas for improving and simplifying the planning system, I see this as a separate topic to housing affordability. For example, we heard from previous witnesses that housing developers have a lot of trouble building on unzoned land. No doubt: the whole point of unzoned land is not to have development at that location and to get it located in the zoned land. It's hardly evidence of anything, except that these developers are bad at their jobs: always buying the wrong land for what they want to build. Indeed, they appear to be terrible lobbyists. If what they claim about zoning keeping prices up is true then lobbying for mass rezoning is financial suicide. It would vastly increase the number of competitors in their market and reduce prices, wiping billions in value from their balance sheets. What sort of industry lobbies for that? Perhaps this story is a lie.

In 2003 the Fin Review ran the headline, 'Brisbane running out of land for housing', with land for housing expected to run out by 2015 according to the same expert lobbyists who've attended this inquiry. Yet detached housing lot production was 30 per cent higher in the six years since 2016 than the six years prior. Are they terrible at their jobs or just telling stories that conceal the true nature of property markets? Remember, only landowners can choose to make planning applications and only landowners can choose when and if to build new homes. Councils don't do this. There's no speed limit in the planning system. Planning regulates the location of different uses and densities, like how road lanes regulate locations for different uses on the road. Density, the dwellings per unit of land, and supply, the new dwellings per period of time, are completely different concepts. More density does not equal faster supply.

A key issue at stake in this debate is that land is an asset. It is therefore priced like one. This is why, when it is a good time to buy the asset, it is also a good time not to sell it, which is what we're seeing now in the markets. This is true for both developed and undeveloped land. Stocks of undeveloped land sit on the balance sheets of landowners, earning a return by growing in value while undeveloped. The trade-off between the return on delaying development of land versus the return on developing now creates a built-in market speed limit on the rate at which private landowners develop. As a previous witness mentioned, if you're a property owner or developer who has land that was consented a year ago, but you haven't sold it, then you're in a very strong position. Builders, of course, might like to build houses faster, but landowners prefer to maximise returns on their asset.

We can see how this pays off with the case study of Jordan Springs, a Lendlease subdivision of around 2,000 lots in Sydney that took a decade to sell. I looked at the sales rates over time and saw that the average rate was only 45 per cent of the peak rate on a three-month average basis, though some periods had sales just 12 per cent of the peak rate. The speed of developing new housing lots was far below the capability of developers and the capacity of zoned land. By selling at this slower rate and capturing overall market gains from higher prices, they made an additional $137 million on the project. Prices for land lots were 31 per cent higher at the end than at the start on a per-square-metre basis. It would have been financially irresponsible of them to develop faster than they did. I'm not saying this behaviour is wrong or a conspiracy, or even that it has major price effects. This is normal market behaviour, and it's why, for a century prior to the existence of zoning, we had the same issues of unequal access to land and housing ownership, only much worse.

The current housing asset boom is a global one. Average prices were up 20 per cent last year in the US, the same as in Australia. Many places that were previously lauded as having flexible zoning, like Germany and cities in Texas, have had the highest price growth. What we are seeing is a period of global asset repricing, as intended by monetary policy. If you want more homes, build them. Flood the market with the public housing developer—you know, just in case the private developers don't do what they said they would. It might be a sensible insurance policy, but no doubt those property lobbyists will find something wrong with this, even though it's exactly the outcome they pretend to be lobbying for—more competitors and lower prices. Thank you. Let's have some questions.

CHAIR: Thank you, Dr Murray. I'm going to give us all five minutes each; Dr Murray, please keep that in mind when you're disagreeing with me! I'll start off. Do you think that we have an affordability challenge in Australia's housing market?

Dr Murray : I think, by its nature, access to property always creates unequal outcomes and hence creates affordability challenges for broader access and ownership, just as it has for hundreds of years. The affordability situation we're seeing today is not hugely different from how it was a few years ago. Sydney apartment rents are currently at 2013 levels, house rents in Sydney are at 2015 levels and buying a house is cheaper than renting in most places in the country. So, in terms of recent history, things have improved in the last few years.

CHAIR: So would it be fair to summarise your view as being 'not really'?

Dr Murray : No more than we have at any other point in the last two decades.

CHAIR: Sorry, you're saying, yes, we do have an affordability crisis, more so than we had—

Dr Murray : No. Let me put it more succinctly. Cheaper housing is better for people who don't own houses. People who don't own houses now would prefer cheaper housing, just as they would have before. But you've got to understand that we've had record first home buying—171,000 last year, compared to 99,000 two years ago. People have taken advantage of low rates and found that buying houses has been cheaper than the alternatives like renting in the last couple of years. So I think calling it a crisis is just—

CHAIR: Can I take back the word crisis and call it a challenge. Do you think we have an affordability challenge in the Australian market?

Dr Murray : Yes. It is a challenge. It's a policy issue.

CHAIR: I should warn you upfront that when you give me some case examples—I think you've given us one in the form of Lendlease, which is land banking—it is my intention to ask those developers to appear before us to give evidence on this fact because it's a dangerous one. Are there any other people you think we should call to account on this matter?

Dr Murray : You can call Stockland, Lendlease—all the major listed developers. You can call Mirvac. You can call Harry Triguboff, if you want. You can call the managers of, for example, some build-to-rent projects and ask them how they manage their property. I have some quotes, for example, from the manager of the Smith Collective, which is a build-to-rent project on the Gold Coast, who told me that they've been staging the release of the precinct since 2018 so as not to flood the rental market. These are 1200 already built houses that were the athletes village for the Commonwealth games, and they left hundreds and hundreds empty for years in a booming Gold Coast property market because it was the best strategy for them to maximise their rents.

CHAIR: On notice, could you provide us with those quotes so we can put them directly to those developers when we call them as witnesses?

Dr Murray : Yes.

CHAIR: This will be my last question. You said that housing prices have increased by 20 per cent globally. However, I'm looking at an OECD table that shows those cities with less restrictive planning rules actually had substantially lower price increases than those cities with far more restrictive planning laws. This is an OECD chart. I'm happy to provide it to the committee. But basically—

Dr Murray : Can you put it on the screen?

CHAIR: No, because that would be beyond my technical capacity, but I'm happy to provide it. What it shows is that Sydney, Canberra, Melbourne, Brisbane, Hobart, Perth, Adelaide, San Francisco and Los Angeles all have the highest increases in median house prices in this period; whereas Tokyo, Houston, Atlanta all had price increases but substantially lower than what those other cities did.

Dr Murray : Let me just give you my brief summary of that sort of evidence. You can pick and choose time periods that show you anything. If you pick the most recent 10 years, or the most recent seven years, you'll find that, for example, Houston, Texas, increased more in price than Sydney; and you'll find that a lot of cities in Germany also did—another place that apparently has great federalised development rights. The fact that property cycles aren't in sync allows a lot of picking and choosing in this. Secondly, the measurements of planning stringency are often reversed out of the prices, so people will say, 'Oh, look, prices are rising in this city. There seems to be a lot of demand and a lot of activity.' And we're going to say that that's indicative of planning controls, so it's almost assuming a relationship.

CHAIR: I'm trying to share this. Can you see it now?

Dr Murray : No, I can only see a grey screen.

CHAIR: Is it up now?

Mr VAN MANEN: Have we got a millennial in here?

CHAIR: Hang on, I've got to do this. Matt, do you want to go next and I might interrupt once I get this to work. I will interrupt, though; I warn you.

Mr THISTLETHWAITE: No, that's okay. Thanks for your evidence. Do you think that there is a structural problem with the Australian housing market, in that the level of homeownership is falling and affordability for particular cohorts, particularly people who aren't wealthy—lower income quintiles—is getting worse and worse? Is that a structural problem, and what can we recommend to the government to do to fix some of that?

Dr Murray : Let me be clear: declining homeownership rates in the last three decades is a common feature of most developed nation property markets. This is not a unique Australian thing. If we're saying it's a structural issue with Australia, we've got to look a bit more broadly and say maybe it's something bigger than that.

My view on what we actually have is this. We had a period after the Second World War of very heavy-handed government intervention in housing to get us up from that 42 per cent to 72 per cent homeownership over two decades. Since then we've changed tune and said, 'Actually, now that we're here, we're going to go back to the market outcome.' We had the market outcome for the century prior to the Second World War and we had homeownership rates of 30 to 40 per cent. That's what the market outcome is. We changed that by having heavy-handed public intervention. That included rent controls on landlords to make it expensive to be a landlord so they would sell to first home buyers. That's how you get higher homeownership: you have to force a landlord to sell to a first home owner. You can't have all these landlords making lots of money and high homeownership rates. There's a trade-off there. We had huge government land grants and new build finance programs, and a massive amount of public housing. Fifteen per cent of new dwellings for a decade were public construction of new housing. A lot of that got sold off to tenants and privatised to boost homeownership rates. That's the sort of action that got us high homeownership rates in the past, and, if that's what we want again, that's the sort of thing we should be doing.

Let me quickly look again. I can see the screen.

Mr THISTLETHWAITE: The screen is up, Chair.

Dr Murray : You can of course pick that time, because Texas had a property boom in the eighties; so did Japan and so did Australia. I don't know what to say about that chart. I could go and fill out that chart and make the lines slope the other way with other countries as well. That's my response there.

CHAIR: Can I get you to take that chart on notice? I'd be genuinely interested in your interpretation of it. At the end of the day, we'd like to get to the bottom of this.

Dr Murray : I will just write that down.

CHAIR: I've also sent it to Kate, at the secretariat. Maybe she can forward it to you. Thank you.

Mr THISTLETHWAITE: What about all the first home buyer schemes that we have throughout the country at the moment? Do you think that they're making things worse, that they're pouring fuel on the fire, and we should be ameliorating some of that?

Dr Murray : There are two effects from the first home buyers schemes. You bring forward first home buying but then you add demand, or you add capacity to pay, to a pool of buyers. So it does have price effects. I don't mind giving first home buyers a price advantage when they're bidding for housing, but if you wanted it not to have such large price effects as a proportion you could perhaps apply it only to new builds, for example, so that they're not shopping. Remember, there are 10 million dwellings and we build only a couple of hundred thousand per year. Most of the churn in the property market is existing dwellings. I don't mind the first home buyer grant. I think it would be improved by focusing it on new builds only.

Mr THISTLETHWAITE: Australia doesn't have a national housing strategy. How do we compare with other nations that are comparable democracies when it comes to something like that, and should we have one?

Dr Murray : I think a lot of that is just going to be a waste of paper. State governments have had housing strategies for years. I was at a conference with all the state housing ministers and they were put on the spot about their new housing strategies. The emcee said to them, 'What about the last housing strategy? Did you do anything about that? Did you meet any targets? Is there any mechanism?' and made them all look like fools. You can have a housing tsar if that's what you want. It seems like a lot of the property industry wants to be told what to do: 'Tell us the population and where you want us to build.' I find it really bizarre that these market players, these sophisticated businesses, are asking governments to give them quotas on housing. I wouldn't bother. I think that, if you want to do something about housing, you should build houses. To bring up another topic, if we want submarines, we don't go, 'You can have permits to build submarines.' We go, 'Here's some money. You build submarines; here's your money. We'll take them.' If we want houses, rock up and build them. It's not that difficult. The very fact that we have this idea that there's some kind of supply crisis yet we're not talking about paying for houses to be built is a real puzzle to me.

Mr THISTLETHWAITE: This is my final question. The crux of your evidence is that, if we want to increase supply, the Commonwealth has to stump up and start investing in that additional supply, be that through money to the states to build it or through other incentives for developers to build it?

Dr Murray : Yes, if that's what you think the problem is. I think there are plenty of houses. We've got more houses than we've ever had. A lot of the issues that concern people are not that there aren't enough houses but that the prices are very high and the access is very unequal because the distribution of existing ownership is unequal. That gives you those intergenerational concerns. For example, my current idea is that we just copy Singapore's approach. Any citizen who reaches a certain age can show up and get a house at cost price from a public provider. Singapore's been doing that for half a century. It's got 80 to 90 per cent home ownership rates and the biggest and best-quality dwellings in the region. We could do it if we wanted to do it.


Ms LIU: A very quick question. Cameron, what portion of the current housing price metrics do you apportion to land banking?

Dr Murray : Zero. Land banking is just a feature of how property markets work. 'Property' is the name we give for 'monopoly'. They were interchangeable names until very recently. Land banking is just what people do. They own property as an asset. You don't have to redevelop it. It's an irreversible decision. If I subdivide today and I build all these houses, I can't build an apartment building or townhouses there instead in five years time. I've committed to that. Across the land market as a whole, not just people who are in the development business but every land owner who has land with development potential has an incentive to wait. They've got an asset that's making money for them. Why would they cash it out and get cash? Are you going to put that in the bank and get zero per cent on it when you can make 25 per cent a year in value gains from your undeveloped land? I'm not saying this is a defect in the market; I'm saying this is the property market. This is how we should have been understanding it from the start.

Ms LIU: I have another question. In your submission, you state that there are no local, international or historical examples of planning reforms leading to cheaper housing. Today we had the Centre for Independent Studies present charts from the OECD contradicting that point. In addition, many submitters and witnesses to this inquiry have identified planning as a key barrier to more housing supply and a key contributor to housing unaffordability. Could you comment on this?

Dr Murray : Yes. That's a great game. This is the argumentation game that lobbyists have been doing for 20 years. Pick a place that's currently cheap. You may as well say, 'Darwin's got great planning. That's why it's cheap.' I can play that game, too. I think Peter Tulip this morning said Tokyo is the great example. Tokyo is twice as expensive as any Australian city, on a per-square-metre-of-rental-apartment basis. The news this year is that Tokyo's apartment prices have reached their bubble highs of the 1980s, when they also had superlow interest rates. The fact that properties move in cycles over a sort of 18-year period really confuses a lot of people, especially when cities are out of sync, and you have cities like Houston, in Texas, that follow a mining cycle more than a property cycle. That's my general view there.

Ms OWENS: Thanks for your evidence. It's really interesting. It always puzzles me why we suddenly have a problem with the market when the market is doing what the market does. In other areas where the market doesn't deliver for everyone, like education and health, for example, where the market will produce incredibly good services for people who can afford to pay but not for people who can't, we have dual systems. Can you see any reason why we shouldn't have that in housing?

Dr Murray : That's exactly what I think we should have, and that's exactly what we historically did have. That's what we had after the Second World War. We had a huge public, heavy-handed intervention in building and giving people houses in non-market ways. If we could leave the market as it is—65 per cent of people own their house; that's great—lots of people are going to rent. But, if we create a small parallel system that allows people access—it would be like a mini Singapore system—our first home buyers could show up and get discounted housing. And you wouldn't have to manage it like public housing; you'd just give it to them. In Singapore you just get given it. It's a 99-year lease. I think you can resell it in the private market after five years, but you only get it once. That's sort of like how we run public hospitals. I find it really bizarre that you can be a homeless person, and we won't give you a house, but, if you get sick, we'll put you up in a hospital instead. It's completely bizarre to me that we don't see how the same logic applies in housing as it does, as you said, in education and health.

Ms OWENS: Just moving back to the discussion that seems to be going on at the moment that you can somehow fix the commercial property market: there are very few interventions in markets that don't have negative consequences. If you actually did manage to fix it, then current owners would be severely disadvantaged. Can you see any process at all that would actually fix the commercial market as it is, given that property developers are self-selected for the market. No matter what you do, they'll find another way really. That's their job.

Dr Murray : You're exactly right. Let me put it this way. The Australian housing stock is worth $9 trillion at current market prices. How many trillions would you like to wipe off the balance sheets of 65 per cent of households? That's the issue at stake here if you want to manipulate the market price somehow. As the Reserve Bank said in their hearing, it may be that that's something you don't want to do—wipe trillions off people's balance sheets.

Ms OWENS: There are some suggestions which make certain sense. There have been a number of suggestions about making data available so that customers and other developers can see where the land is, see when it's going to become available, see where it is in the planning process, so that you don't get the panic buying to the same extent, and the market works in the way that markets should, where there is more complete information. Do you think that would make a difference?

Dr Murray : Not at all. It could make it worse. Look at the stock market—infinite instant information, and all we get is boom-and-bust bubble cycles. This is one of the issues with stamp duty, and that came up here. Stamp duty is a Tobin tax. It's a tax on transactions. What we typically say in economics is, if you tax asset transactions, you dampen market cycles. There is some kind of positive benefit there. It's a pro-cyclical tax. It dampens the cycle. There are good features of that, in my mind. I'm very wary. It's great to have data—I'm a housing researcher—but I don't think it's going to change behaviour in the marketplace.

Ms OWENS: Really I think what you're suggesting is that our current property market is essentially a speculator market, and they're not really selling housing; they're just manipulating value.

Dr Murray : Let me be clear. Building houses is a market where we're producing goods and services. We are in the location market. Imagine the space to the country is three-dimensionally carved up into pieces. That is the market.

It's a bit like a share of the property space in Australia. We could own shares in that. We can have a company own all the land and we could own shares in it. And it would be weird to say, 'Oh, we've got a share shortage of Commonwealth Bank shares,' for example. But, because when we partition up the ownership of the space on a location basis instead of a share of the overall ownership basis, we then go, 'Oh, there's some kind of shortage of these shares of locations.' I think that's where we've got to be thinking; asset markets are always like that. The problem, of course, with housing is you need somewhere to put houses, and that place is an asset. We don't have a problem with building houses. You can go get a builder any time you want. You just need somewhere to build it.

CHAIR: What are you suggesting there? That we need to free up available land?

Dr Murray : No. Let me put it this way; Commonwealth Bank shares are $100 each; what does it cost to produce a Commonwealth Bank share?

CHAIR: But it's an underlying asset.

Dr Murray : Yes. And that's my point. The property, the physical space, is an underlying asset. It sits on your balance sheet, and it makes you money when it's undeveloped. So why, for example, if I own this huge development site, would I panic and sell and reduce the value of my asset? Why, if I owned a portfolio of bank shares, would I suddenly go, 'Oh, they're $100. I'd better panic and sell and swap that $100 of assets'?

CHAIR: Because you can't. I can answer that question. There are several reasons why. You can't eat shares. You need cash to buy food or pay wages [inaudible]—

Dr Murray : Yes. But the next person who buys it from you as an investment will have bought with cash because they want to not spend that cash. So, yes, you might want cash at some point, so you sell your property asset. The person who buys this undeveloped land—property asset—will have a reason not to own that cash and will instead want to own a property asset, and that asset is going to bring them a return whether they develop it or not.

Ms OWENS: So there's a—

CHAIR: So the value is in the development of the land.

Dr Mu rray : Yes. Just like the sharemarket doesn't crash to zero because everyone needs cash all of a sudden. That's also true of the property market. People are in it because they don't want cash; they want assets on their balance sheet; they want property assets. They don't have to sell. If they wanted to sell, different people would own it, and different people [inaudible]

CHAIR: That's how the market operates; it's an exchange of goods and services.

Dr Murray : Correct. But let me be clear; when people panic and sell, we get a property market crash and [inaudible]

CHAIR: When there are more sellers than buyers, price decreases, yes.

Dr Murray : Correct.


Dr Murray : Let's be clear about the logic that we've walked through. If you rezone all these pieces of land, these very wealthy people, who already have this multimillion dollar asset on their balance sheet, who haven't sold it previously—and now it's worth even more—are going to suddenly panic and go, 'Oh, now I really need that as cash. I must panic and sell,' and flood the market and decrease prices. We can see this doesn't happen because mass rezoning happens all the time, almost in secret. The planners know. Mass rezoning happens. Everyone's quiet. The property markets are unmoved because they know there's not going to be a mass panic. If the logic were true, then we could announce a rezoning and watch the market crash as the expectations flow through to that asset, just like if you announced that you're going to open the door to all these competitors in supermarkets and plonk them right next to Coles in every supermarket the Coles shares would crash immediately on the announcement.

CHAIR: No. Not necessarily.

Dr Murray : But we've announced so many mass rezonings—

CHAIR: By the way, that is what you see. When Aldi announced they were entering the market, you saw shares in Coles and Woolworths or—Coles Myer as it was then—actually began to decrease.

Ms OWENS: Yes. That's right.

Dr Murray : Exactly. But in housing when you rezone [inaudible]

CHAIR: But you didn't see it crash.

Ms OWENS: Well, it decreased. The price of the shares went down because of the announcement that there would be more competitors. But with land that doesn't happen.

Dr Murray : You would notice if house prices fell 15 per cent after you announced they're rezoning.

CHAIR: [Inaudible]

Dr Murray : You would notice.

CHAIR: Can you just start again, because [inaudible] sorry.

Dr Murray : To draw that parallel with competitors to the supermarkets, if their share price fell 10 per cent—let's say, hypothetically—you would notice if the price of housing fell 10 per cent because of mass rezoning an area. It's not a small unnoticeable effect. Clearly, if you're in the business of selling housing, that's not what you want. So I think we've got to understand [inaudible] that—

CHAIR: No. I've got to actually step in here. I think you're mistaking price for [inaudible] capital. People make revenue from price times quantity. So a reduction in price—

Dr Murray : No.

Ms OWENS: No. No, Jason.

Dr Murray : No.

CHAIR : Have you heard of a little company called Amazon? I promise you, I have done economics for a long time. There's this company called Amazon.

Dr Murray : Okay.

CHAIR: It's how he made all his money. You guys are absolutely wrong on this. Okay?

Ms OWENS: Amazon is not selling houses, Jason. Let's hear the witness.

CHAIR: [inaudible] selling goods and services, Julie, and the way that he actually sell goods and services for less value than he [inaudible]

Ms OWENS: Jason, I've heard you and I actually don't agree with you. Can I please hear the witness. This is my question [inaudible] Thank you.

Dr Murray : Let me be clear, builders produce new goods and services. Housing developers buy one asset and they sell it in small pieces. Just like I could buy ten shares of Commonwealth Bank and sell them one share each at different points in time in the future. This is the issue with property. It's an asset that sits on your balance sheet. You don't make money by getting rid of it. You make money by owning it while its value goes up. I think that's the logic we've been missing in a lot of this debate. You think property is not an asset that—tell me, what does it cost to produce a piece of land?

CHAIR: So essentially how—

Dr Murray : What are the inputs? What are the inputs?

CHAIR: How do businesses make money? Take Meriton, who you mentioned before. How Meriton makes money is it buys a block of land, it then builds a block of apartments on it and it sells those apartments—

Ms OWENS: No. No, it doesn't, Jason. It sells some and holds others. It actually sells at the best time. It builds when prices are low to build and it sells some to push prices up. It's different. It's not the same as Amazon. Sorry, Cameron.

Dr Murray : Let me be clear. I'll try and paraphrase.

CHAIR: Yes, please.

Dr Murray : For an investor, a profit and an asset turn, in terms of change in value, are equivalent economic returns. So, if I have a portfolio of investments I can either make money from dividends or from the increase in value. Both of those are equivalent returns, because if the value goes up I can sell some and get cash. That is what's going on in property. You can either sell some and get cash or you can also hold it and not develop it and get the asset value gain, and these are equivalent returns. So what you're doing is trading off how much should I get as cash and how much should I keep as value gains in the portfolio across my development portfolio? Does that help explain things at all?

CHAIR: Look, I think we're into the next witness' time. I interrupted Julie, so I will step out but fair to say that I—yes, please. Julie, sorry.

Ms OWENS: Thank you, Cameron. I think you've told me what I need to know. You just might want to explain what happens when a development is released 25 kilometres from the city, as they tend to be now, and the builder builds some and not others. Why might they release a third of the land with buildings on, but hold some and hold the occasional block back as well. Why would they do that?

Dr Murray : Let me just tell you a story and that will be my answer. When I worked at FKP in the mid-2000s we released a new building at the Sunshine Coast and we had a queue around the block at the sales office on Saturday morning. We could have sold the whole thing then and there that day. But we didn't. At 10 am we closed the office, we sent everyone home and we came back on Monday with massively higher prices. What we did, instead of selling them all as fast as we could and making money, was we took over three years to sell out that building. We could have sold them all on Saturday morning. Instead, we took the gains as prices and sold them at a future point in time, because that higher price at the future point in time is worth more to us than the lower price today. That's the logic of drip-feeding and staging et cetera. The very existence of staging is weird. If you're a developer, you can't sit around on stock. Why would you hold future stages instead of selling them to someone else who can build in parallel at the same time as you? That's illogical by the logic they claim is at play. That's what's going on. You've got this trade-off between building today and tomorrow. And you don't want to flood the market, because if you depress prices today, you'll also get less tomorrow.

CHAIR: Dr Murray, thank you very much for your submission and evidence today. If you've been asked to provide any additional information, could you please forward it to the secretariat by 1 December 2021. You will be sent a copy of the transcript of your evidence and will have an opportunity to request corrections to transcription errors. Thank you very much. We've very much appreciated having you here today. We'd also like you to come back, when you get a chance, on some of that other stuff we sent you.