Westpac Chief Executive Anthony Miller (pictured) has called for more affordable homes priced around $500,000, saying cutting red tape and streamlining building codes is key to solving Australia’s housing affordability crisis, Yahoo Finance reported.
“When we finance someone in the acquisition of a house, we will lend in the order of five to six times their income,” Miller told investors. “You’ve got something anywhere between $450,000 to $550,000 of mortgage capacity … so all of a sudden you can see that median $500,000 as a house [price] is just really critical if we’re going to solve [the problem] for average Australia.”
He said achieving that level of affordability “should be reasonable,” but would require “a reduction in red tape” and “streamlined” building codes.
Builder Scott Challen said reversing complex regulatory layers could make affordable construction possible again.
“I could fix the problem with the stroke of a pen. It’s that simple. I would revert the building code back to 2009 levels,” Challen told Yahoo Finance.
“The house that we could build for you in 2009 is not allowed to be built in 2025,” he said. “The compliance, the engineering, the disability access, the thermal energy requirements … none of that stuff existed in 2009.”
He argued that while improved standards make homes more efficient, they have pushed entry-level prices out of reach for many buyers.
Figures from the Housing Industry Association (HIA) show government taxes, regulatory fees and charges make up around half the price of a new Sydney house-and-land package — an average of $576,000, up 38% since 2019.
“With half of the cost of a new home being taxes and government charges, new home buyers are spending 15 years of a 30-year mortgage just paying off that tax,” said HIA Chief Economist Tim Reardon. “Higher taxes on new housing will only lead to fewer new homes and higher prices for existing homes.”
Challen said the sector remains stuck in a “perfect storm” of inflation, supply shortages, and industry strain.
“You’ve got all these builders going broke. We’ve got apprentices that won’t stick. We’ve got transport companies collapsing,” he said.
Basic materials like bolts, insulation, and timber remain in short supply. Insolvencies in the trucking sector have jumped from 92 in 2021–22 to 438 in 2024–25, with inflation and driver shortages fuelling the crisis.
Prefab homes may provide a realistic path to Westpac’s $500,000 vision — but lender policy remains a hurdle.
Westpac, NAB, and ANZ are under pressure to follow Commonwealth Bank’s approach, which allows loans to be drawn before prefab structures are fixed on-site.
Gold Coast buyer Sarah Kenny said a prefab build allowed her and her husband to save big on costs.
“It fitted within our budget and build time frame, without putting too much stress on building a home,” she said.
The couple built a three-bedroom, two-bathroom prefab home for $400,000, compared to quotes of $700,000 for a traditional build.
Low-cost housing shift could open new financing markets
For brokers, Westpac’s call underscores growing demand for low-cost housing finance — including prefab builds and regional developments.
As lenders evolve credit policies to support these non-traditional builds, brokers will play a key role in guiding clients through valuation, eligibility, and funding complexities.
With affordability stretched and first-home buyer activity surging under new government schemes, brokers have an opportunity to help borrowers access emerging housing solutions — responsibly and efficiently.
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