A multi-millionaire property developer from Australia has sparked outrage after saying that he wants unemployment to rise in his country because workers have become ”too arrogant”. Tim Gurner, CEO of Australian real estate company Gurner Group said that the Covid pandemic had changed employees’ work ethic and they need to be put in their place through unemployment, Independent reported. 

”I think the problem that we’ve had is that people decided they didn’t really want to work so much anymore through COVID. They have been paid a lot to do not too much in the last few years, and we need to see that change” he told the Australian Financial Review Property Summit in Sydney.

According to him, the key to curbing “arrogance” in the labour market is higher unemployment.

”We need to see unemployment rise. Unemployment has to jump 40, to 50 percent in my view. We need to see the pain in the economy. We need to remind people that they work for the employer, not the other way around,” he added.

”There’s been a systematic change where employees feel the employer is extremely lucky to have them, as opposed to the other way around. We’ve got to kill that attitude and that has to come through hurting the economy,” he further said. 

The unemployment rate in Australia is 3.6 per cent, or roughly 500,000 people, meaning an estimated 250,000 workers would lose their jobs in a 50 per cent increase.

A video of his controversial comments has gone viral on social media, sparking instant backlash. ”Why doesn’t he do us a favour and volunteer his job as the first step to the 50%,” one user wrote. Another said, ”Everything a business leader should not say. Kind of unbelievable.”

His comments also drew a fierce reaction from the US democrat Alexandria Ocasio-Cortez.

”Reminder that major CEOs have skyrocketed their own pay so much that the ratio of CEO-to-worker pay is now at some of the highest levels *ever* recorded,” Ocasio-Cortez wrote on X.

After receiving backlash for his statements, he said in a LinkedIn post on Thursday that he was “wrong” to say what he did. He admitted that his comments were ”deeply insensitive”.

“At the AFR Property Summit this week I made some remarks about unemployment and productivity in Australia that I deeply regret and were wrong. There are clearly important conversations to have in this environment of high inflation, pricing pressures on housing and rentals due to a lack of supply, and other cost-of-living issues. My comments were deeply insensitive to employees, tradies and families across Australia who are affected by these cost-of-living pressures and job losses. 

”I want to be clear: I do appreciate that when someone loses their job it has a profound impact on them and their families and I sincerely regret that my words did not convey empathy for those in that situation,” Mr Gurner wrote.

Mr Gurner, who has been featured in Forbes Australia, and is one of Australia’s richest men, has a net worth of $912 million as per The Australian Financial Review’s estimates.  

The credit outstanding in housing (including priority sector housing) rose 37.4% annually in July crossing Rs 24.28 lakh crore, according to the RBI. File
| Photo Credit: K.V.S. GIRI

Bank credit to housing as well as commercial real estate witnessed a nearly 38 per cent annual growth in July, taking the loan outstanding to the realty sector to a record Rs 28 lakh crore, as per the latest RBI data.

It is evident from the Reserve Bank’s loan outstanding data as well as property consultants data on housing sales and new launches across major cities that the real estate sector is moving at a fast pace.

Huge loan growth

The credit outstanding in housing (including priority sector housing) rose 37.4 per cent annually in July crossing Rs 24.28 lakh crore, according to the RBI’s data on ‘Sectoral Deployment of Bank Credit – July 2023’.

The credit outstanding to commercial real estate increased by 38.1 per cent to Rs 4.07 lakh crore.

Commenting on the RBI data, Anarock Chairman Anuj Puri said the impressive loan growth in the real estate sector is a function of a large-scale demand revival across the board.

“The commercial office segment was reeling under the pandemic last year as employers studied strategies around complete work from the office, work from home, or a hybrid model. However, as the situation gained normalcy, employees returned to offices and the demand for good quality commercial offices is high this year,” he said.

House prices inch up

Another set of RBI data showed that All India HPI growth (y-o-y) inched up to 5.1 per cent in the first quarter of 2023-24 from 4.6 per cent in the previous quarter and 3.4 per cent a year ago.

In 2022, Puri said housing sales across top 7 cities were 54 per cent higher than the previous year. In January-June 2023, sales have already reached 63 per cent of the previous year, indicating the sustained demand.

The demand remained undeterred despite a steady rise in home loan interest rates, he added.

Samantak Das, Executive Director and Head of Research, JLL India, said the RBI’s latest sectoral credit data showed a remarkably high growth in bank lending to the real estate sector in July 2023.

“This is the impact of the merger of a non-banking financial company with a bank. On excluding the impact of the merger, lending to commercial real estate in July 2023 increased by ~12 per cent y-o-y and housing loans increased by ~13 per cent y-o-y during the same time frame,” he added.

Das said this double digit growth is considered quite robust given the challenging economic scenario globally.

The double-digit growth can be attributed to the rising demand for housing which is reflected in the robust sales volume recorded till June 2023,” he added.

Aman Sarin, Director & CEO, Anant Raj Ltd, said the growth in credit indicates that the real estate sector is growing and people are investing in the sector.

“This also indicates that the banking sector is positive about real estate and willing to provide capital for construction of commercial and housing projects,” Sarin said.

Developers confident

Real estate developers and consultants exuded confidence that the sales momentum in the real estate sector will continue. They are also bullish about bumper sales in the upcoming festive season.

Mohit Jain, Managing Director, Krisumi Corporation, said: “The festive season typically brings optimism and increased real estate transactions.” The residential real estate sector is presently experiencing robust growth, and this trend is expected to persist, Jain said.

Puri of Anarock said the demand momentum is likely to continue, and the real estate sector is likely to scale newer heights.

As per the Anarock data, the total housing sales increased to 2,28,860 units during January-June this year across seven major cities from 1,84,000 units in the year-ago period.

These cities are — Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Hyderabad, Chennai, Pune and Kolkata.

This is despite the rise in interest rates on home loans by around 250 basis points in the last one and a half years and also increase in prices of residential properties after the COVID pandemic.