Coalition Government: Real estate industry wish list
The 2019 federal election has now passed; and as the dust settles, all eyes are on the re-elected Coalition government to confirm its cabinet and get to work on implementing its proposed policies.
The stability of a familiar government, and an expected RBA rate cut in the coming months, will boost confidence in the property market, encourage vendors to list their property and embolden buyers to re-engage with what’s on offer.
Despite Labor’s proposed changes to negative gearing and capital gains tax being off the table, the Coalition needs to ensure they are focused on the strength of the industry that employs one in four Australians; the property industry.
Below, is the real estate sector’s wish list to the new government.
Accessibility to credit
As previously announced, the Coalition government has chosen not to follow the Hayne Royal Commission’s recommendation to cut trailing and upfront commissions for mortgage brokers, instead deciding to review the model in three years. This is a positive step for consumers, as it underwrites competition between lenders.
A positive side effect of the royal commission was the improvement in lending standards by our banks, which has further enhanced the robustness and helped de-risk our banking sector. That said, overregulation and the tightening of standards to a point where businesses, first home buyers and occupiers cannot invest, upgrade or get their foot into the market is a fine line; which, if taken too far, can have far reaching consequences on not just property prices, but also construction levels and jobs.
Therefore, the Government now needs to exert its influence and support borrowers by setting a policy platform that encourages banks to free-up finance again.
A comprehensive housing policy
The Coalition’s promise to support first home buyers and reduce deposit requirements to five per cent and underwrite the remaining 15 per cent, via its $500 million First Home Loan Deposit Scheme, is a welcome measure. This will provide a much needed helping hand to those looking to get their foot on the first rung of the property ladder.
However, this policy and the timing of the announcement shows that housing policy has become an election gimmick, which is only rolled out during the later stages of a tight election campaign. What’s needed from the new government is the consideration, planning and implementation of a comprehensive, long-term housing solution that includes social and affordable housing, build-to-rent, taxation, construction and solutions for all market participants.
The property industry, directly or indirectly, employs one in four Australians; and residential property is valued at $6.3 trillion, making it the most significant sector in our economy. Consequently, and in line with our call for a comprehensive housing policy, the appointment of a federal housing minister is needed to ensure the health of this industry. This minister would have a dedicated portfolio and agency and be charged with improving and implementing effective housing policy.
A new housing portfolio created at the federal level would tackle all forms of property policy and strengthen the market through targeted incentives and reform – like other countries such as New Zealand, the United States and UK, which all have dedicated housing portfolios.