Australia’s housing market is sending a warning signal on confidence, investment and future housing supply, with new ABS figures showing the total value of residential dwellings fell by $34.1 billion during the June quarter through factors including interest rates and property tax hikes.
Property Council Chief Executive Mike Zorbas said the numbers reinforced a market reality that governments need to face head on. Mr Zorbas also noted the long-held Property Council view that tax reform starts with a broader, higher GST with a bigger social safety net.
“Housing shortages start when investors decide the next project isn’t worth the risk.
“The Federal Government has important targets on housing supply that it is currently delaying by making housing supply investment harder.
“At some point population and household formation growth will put a floor under prices, but in the meantime, we are harmfully shrinking new supply with Federal tax change after change.
“Property is already hugely taxed – $130bn a year nationally and rising.
“The current Federal trust taxes land on exactly the businesses carrying the greatest development risk.
“Context matters for market confidence. The government is continuing to hike housing taxes at a time of raising capital, labour and materials costs.
“This is stopping enquiries becoming sales and in turn stopping feasibilities stacking to support new home supply.
“The Federal government needs to relent on additional taxes on housing supply and, in those markets that are becalmed, to accelerate its funding to states for last mile infrastructure.”
The Property Council has laid out a path forward.
About the Property Council of Australia
The Property Council of Australia is the voice of the property industry, representing the 2600 largest and leading organisations across every kind of commercial, industrial and living sector asset and championing strong cities, positive investment settings and a productive economy.
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