NAB’s boss Ross McEwan has told the nation’s politicians in Canberra that we need more housing or both house prices and rents will go through the roof. His warning coincides with the analysis of a respected economist, who thinks immigration will not only save us from a recession, it will also keep inflation too high, which will mean interest rates will also have to rise.

Yesterday I pointed out that Morgans chief economist Michael Knox thinks that the mortgage cliff should be enough to stop the RBA from further rate rises. However, an argument against this is that the surge in demand from the historically high immigration rate means that the demand for housing (as well as goods and services) will stop inflation from falling enough to put an end to rate rises.

And now Ross McEwan has told the House of Representatives economics committee that the “chronic undersupply” of housing stock means house prices are on the way up again.

The AFR’s Lucas Baird reports that Sydney house prices are up 6.7% since January and the NAB boss made his case by simply pinpointing the problems of a need for more land to be made available and councils speeding up permissions to build.

He told politicians that NIMBYS (or “not in my back yard” residents) who councils succumb to, need to be ignored because the infrastructure to support a rising population is in the capital cities of Australia.

McEwan surprised many politicians by revealing that although there are reports that mortgage stress is on the rise, it looks like there’s no crisis at this stage. He said home loan arrears were on the rise but were still below the 10-year average!

Helping is the very competitive home loan market which has been assisted by reduced dependence on the big four banks for doling out loans. And the impact of mortgage brokers is clearly a big help for borrowers needing refinancing to reduce the impact of rising rates.

That said, the ANZ team who presented at the House of Reps looked at the nation’s reaction to the RBA’s aggressive monetary policy and explained that it had $4 billion set aside in case borrowers got into trouble and the bank had to deal with credit losses.

They inferred that if two more interest rate rises materialised, this could push some borrowers over the edge.

That’s nice to know that borrowers are coping with the excessive rate rises from the RBA, but it will be interesting to see who’s going to take up the cudgels to beat councils into submission to permit more homes to be built ASAP.

In 2020, hipages.com.au pointed out that “in Hobart, councils must process planning applications within 42 days but in New South Wales, it takes an average of 68 days to process a DA according to informed sources, and in some areas, the average is 100 days.”

One Melbourne builder told me that once you could get a building permit within six weeks but now it can take more than three months!

The Albanese Government needs a courageous politician to lead the charge to take on councils or else house prices and rents will keep rising.