It’s tempting to think this month’s decision by the Reserve Bank to hold interest rates might mean the worst of the pain is over for homebuyers, businesses and our economy

The truth is that the underlying fundamentals for housing remain very tight notwithstanding that the economy is slowing down and the markets are generally very choppy. We are anticipating interest rates will start to come down again toward the back end of 2024. But it’s difficult to see how this will move the needle in terms of supply and affordability of homes.

The previous 13 rate hikes between May 2022 and November 2023 have seen mortgage repayments go up by an average of more than 60 per cent, adding roughly another $17,000 a year for a household with a $600,000 variable rate mortgage.

The continued shortage of housing stock means, despite the impact of interest rate rises, Adelaide real estate values are forecast to climb by as much as another 7 per cent next year. That’s fine if you’re already an owner, but not for those trying to get into the market whose borrowing capacity has dropped by more than 30 per cent since May 2022.

South Australia must be a destination for skilled migrants

Both locally and nationally, supply remains very constrained with uncertainty around planning discrepancies across jurisdictions, land release mechanisms and funding of government programs continuing to see investors sit on the fence. Arguably, the biggest problem is that we still have far too few skilled people in construction and building, with around half a million new workers needed in just the next two years.

However, there are opportunities for South Australia that we must start to grasp in 2024.

Australia is amidst the largest migration program the country has ever seen.

In the 12 months to March 23, our national population increased by more than 560,000 – roughly another Tasmania – and annual overall growth is projected to outstrip the federal government’s forecasts. The government recently announced a new strategy to fix “a broken system” and bring migration back to sustainable levels, with better regulated pathways for workers in lower-skill parts of the economy and freer movement for people in highly skilled roles.

South Australia must be a destination for skilled migrants, and in far greater numbers than we are currently attracting.

The ABS projects SA’s population will increase by 0.8 per cent per year at most, a slower rate than all other states other than Tasmania. Our overall population share is now below 8 per cent and our political influence has diminished as a result.

In 1993, South Australia had 13 seats in the House of Representatives; today we have just 10. We need to start drastically outperforming ourselves in terms of skilled migrant uptake and foreign investment attraction if we are to achieve anywhere near our potential.

And we should be attracting skilled migrants.

The AUKUS defence program will provide almost inconceivable opportunities while large-scale government projects such as the new Women’s and Children’s Hospital and the Torrens to Darlington expressway won’t see much change from $20 billion in capital expenditure – just on those two projects.

We must leverage these investments to create long-term benefits for our community by attracting and retaining skilled labour. If the skills end up being just fly-in and fly-out – a bit like the Olympics where everyone shows up for two weeks and then leaves – it would be a disaster for our state.

No one person, organisation or sector has the answer. Creating skills sustainability is going to take a multi-disciplinary collaborative response. But if there’s a place in Australia that should be able to do this and do it well, it should be us.

We are a market of one degree of separation. The “that’s such an Adelaide thing” adage – often used as an implied criticism – is actually what we need to leverage.

By massing and utilising our collective knowledge, trust and confidence in each other, we can do something truly powerful.

Trevor Cooke is CEO of Commercial & General and Deputy Chair of the Committee for Adelaide