With the 2017 Federal Budget looming, the Property Investment Professionals of Australia (PIPA) is urging the government to take a sensible approach to housing affordability policy.
As the peak body for the property investment industry, PIPA has long campaigned for greater education around property investment as well as regulation of property investment advice and remains dedicated to supporting a healthy, sustainable property investment industry.
PIPA chair Ben Kingsley held discussions on housing affordability with government representatives in April.
He said the association welcomed the federal government’s decision to rule out changes to negative gearing and hoped this was reflective of a well-considered approach to addressing affordability issues both on the buying and renting sides.
“Housing affordability is challenging, but there’s no easy fix. We welcome the government’s focus on this issue but urge them to adopt sensible measures that reflect the national market needs, rather than any of the radical changes that have been floated by some corners of the market such as axing negative gearing and SMSF property investment.
“PIPA supports thoughtful and varied solutions that promote supply and cool demand and consider the long-term viability of the market and broader economy.” Mr Kingsley said no policy would ever reduce the price of quality property in the inner suburbs of major capital cities due to continued strong demand versus limited and geographically-constrained supply.
However, he believed strategic policies could work to encourage more supply in urban locations. “Potential polices that could stimulate supply include measures that encourage developers to build more family-friendly accommodation, such as three or four bedroom units. Incentives to encourage the release of bulk land lots in new greenfield areas could also boost supply.”
As for the demand side, Mr Kingsley emphasised that regulation and education remained key. “Property investment advice needs to be regulated. This would remove spruikers and speculators from the market. Educating investors about the real and current risks of property investment and ensuring they are not pressured into poor investments would help to moderate demand and avoid budding investors getting their hands burned.”
The economic benefits of the Australian property industry According to data from CoreLogic, residential housing stock alone is estimated to be worth $6.9 trillion, which is more than three times Australia’s total share market capitalization of $1.7 trillion and our total superannuation pool of $2.2 trillion. “Any policy changes that could impact the value of this asset class, need to be thoroughly considered,” Mr Kingsley said.
“The residential property cycle plays a significant role in the country’s overall economic performance, as we’ve seen by the recent strong stamp duty receipts in New South Wales which have helped to fund the state’s robust infrastructure program.”
Mr Kingsley also reinforced the role property played in building everyday Australians’ wealth. “While high property prices can be incredibly frustrating for those trying to enter the market, we need to remember that property is a key feature of many everyday Australians’ wealth creation strategies,” he said.”
Property is an accessible, trusted source of wealth that can help just about anyone build a better future. We need to be very careful when it comes to playing around with measures that could hurt the value of these assets.”
Staff Writer, Professional Planner, 2 May 2017