The Property Council of Australia has welcomed Treasurer Jim Chalmers’ announcement of a $900 million productivity fund allowing state and territories to boost building approvals and other housing reforms.

The Property Council first proposed incentives attached to national housing targets in the mid-2000s.

The 2016 Property Council Deloitte Report, Federal Incentives for Housing Supply, undertaken by Professor Ian Harper AO, proposed a National Competition Policy for supply and housing incentives that could boost housing supply and spur state housing production within three years.

Property Council chief executive Mike Zorbas said premiers and planning ministers who put in the leg work on housing supply should be rewarded for their efforts.

“This housing crisis demands we pull every lever, and making our planning systems fit for purpose is the golden lever,” Mr Zorbas said.

“State premiers and planning ministers have a mighty housing supply challenge in front of them.

“We would have 1.3 million extra homes today if our planning systems retained the efficiency they had in the 20 years before 2001,” Mr Zorbas said, referencing analysis by Dr Tony Richards in May 2023.

“Rewarding state and local government housing supply innovations should be top of mind alongside boosting last-mile infrastructure and addressing taxes that hinder investment and reduce affordability.

“With welcome and much-needed federal funding for social housing, planning reform and housing infrastructure, this new fund will help to cut through housing red tape and boost home construction.

“The Property Council also welcomes the additional focus on prefabricated and modular homes in the fund.

“We need large-scale supply chains, substantial investment and regulatory reform to put industrialised construction on the front foot in Australia,” he said.

According to the Property Council, current housing headwinds operating in most state markets include “high cost and hurdles of financing, a decade of high new household formation, catch-up immigration pains, years of rising material and labour inputs, decreasing construction productivity, low market capacity, labour market competition and cost escalation from historically large infrastructure builds and green/energy infrastructure construction, planning delays, potential ACCC acquisitions red tape and sluggish environmental and cultural approvals, and ever-changing and disruptive state property taxes and especially those on overseas investors, among other negatives”.

Supply and demand As we head into the final few weeks of 2024, there is no question that most property markets have weathered the high-interestrate environment remarkedly well which is not surprising if you understand the basics of supply and demand, according to the latest PIPA National Market Update.

This report pulls together insights and analysis from market experts and PIPA members from the latest edition of the PIPA Adviser e-magazine’s national market update.

PIPA chair Nicola McDougall said some areas, such as Perth, Adelaide and Brisbane, are finishing the year posting double-digit dwelling price growth with few signs of any significant change to this state of play next year.

“Dwelling prices in our most expensive capital city, Sydney, are currently at record highs, however, recent data showed the first monthly decline since January 2023, following a short but sharp -12.4 per cent drop in values between February 2022 and January 2023,” Ms McDougall said.

“The negative impact of anti-investor rental reforms in Victoria and its much maligned new ‘temporary’ land tax that lasts for 10 years continues to drag down property prices in that state as well as kybosh investor demand.

“As long as these punitive policies and taxes remain, investor demand is likely to continue to be subdued over the short- to medium-term.”

Ms McDougall said investor sentiment nationally has reduced significantly over the past three years.

“According to the 2024 PIPA Annual Investor Sentiment Survey, about 46 per cent of investors believe that now is a good time to invest in residential property, but this percentage is down from the 56 per cent reported last year and down significantly from the 62 per cent recorded in 2021, when interest rates were at record lows,” she said.

“The latest inflation reading is heading in the right direction, but the Reserve Bank is yet to offer any glimmer of intent regarding when interest rates may be reduced.

“The only thing that is certain is that it is clear that interest rate cuts are on the horizon, which will be welcome news to all current and prospective homebuyers and investors.”

Originally Published: Page 15 | Port Lincoln Times | 21 November 2024

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