New Housing

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<p><span style="line-height: 1.3em;">GUEST OBSERVER</span></p>
<p><span style="line-height: 1.3em;">The Winter 2015 </span><span style="line-height: 1.3em;">National Outlook </span><span style="line-height: 1.3em;">has been released today by the Housing Industry Association. The </span><span style="line-height: 1.3em;">report is the most comprehensive quarterly review of Australia’s residential building industry, and </span><span style="line-height: 1.3em;">includes forecasts for new home building and renovations activity.</span></p>
<p><span>During 2014/15, we estimate that a total of 214,450 new dwelling commencements occurred across Australia. This is easily the highest yearly total on record</span><span>. </span></p>
<p><span>HIA's recent </span><span>National Outlook </span><span>identifies the role of the low interest rate environment in supporting higher levels of new home building, as well as strong, migration-driven population growth over the past decade</span><span>.</span></p>
<p><span>However, other elements are serving to frustrate the delivery of new housing supply. We are faced with an excessive taxation burden on new housing, land release which is simply too slow and a raft of planning restrictions. All of these make it difficult for our industry to meet the housing needs of Australians.</span></p>
<p><span>The effect of these supply bottlenecks will become apparent over the next 12 months, with the volume of new home building projected to decline by 7% during 2015/16</span><span>. </span></p>
<p><span>During the upturn, multi</span><span>-units accounted for an increasing proportion of new home building. Consequently, the multi-unit segment will see larger rates of decline over the coming years compared </span><span>with the detached house segment. </span></p>
<p><span>HIA projects that new home building will bottom out at around 175,000 per year towards the end o</span><span>f the decade. Critically, this falls short of </span><span>Australia’s long term requirements and </span><span>emphasises the importance </span><span>of reform around taxation and housing supply policy. </span></p>
<p><em><span style="line-height: 1.3em;">Shane Garrett is senior economist for HIA and can be contacted <a href="https://hia.com.au/en/BusinessInfo/economicInfo/EcoGroup.aspx" target="_blank">here</a>.</span></em></p>
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jchancellor-FAypfDUnLy

Policy constraints spell end for home building upturn: HIA

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<h3 class="post-title entry-title"> </h3>
<p>We traded in a car this week for about a twentieth of what it was bought for when new.</p>
<h3 class="post-title entry-title"> </h3>
<p>Not so keen so reproduce this underwhelming result, in its stead I bought a 2012 Ford with 36,000 clicks on the clock, for around half of its 'as new' price. A bit more palatable.  </p>
<h3 class="post-title entry-title"> </h3>
<p>Being no spring chicken any longer, I could obviously afford to buy new, but it's only a runabout and buying second hand simply offers far superior value. </p>
<h3 class="post-title entry-title"> </h3>
<p>Besides, I feel I should practice what I preach: when compounded over a couple of decades, $20,000 could be worth quite a lot in the future. </p>
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<p>Of course, someone must buy all the new vehicles, else they'd never be sold. But who?</p>
<h3 class="post-title entry-title"> </h3>
<p>Well, some people just like the 'feel' of driving something brand new. And it sometimes makes sense for some company car drivers. </p>
<h3 class="post-title entry-title"> </h3>
<p>Other people just have money burning a hole in their pocket, I guess, and more power to them...</p>
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<p>Who buys new dwellings?</p>
<h3 class="post-title entry-title"> </h3>
<p>In a similar vein, buying new property tends to incur quite a hefty price premium, and for those buying 'off the plan' there is always that nagging risk that the final product doesn't much resemble what was breezily sketched in the brochure (those busy main roads just never seem to feature, hey!). </p>
<h3 class="post-title entry-title"> </h3>
<p>Some speculators go down this path anyway, hoping to make a fast capital gain before the property is even constructed. I've seen this work very well (e.g. Barangaroo), but have seen it go wrong more often (too may places to mention).  </p>
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<p>I must confess I've bought new property in Sydney before, and I'm even considering doing so elsewhere again right now, though I wouldn't necessarily recommend it to anyone looking for a bargain.</p>
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<p>Why?</p>
<h3 class="post-title entry-title"> </h3>
<p>In fact, why would anyone buy new property? It's a bit like buying a new car in many ways. </p>
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<p>Well, firstly, some people just like the undeniably fresh feel of an unused dwelling. </p>
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<p>Secondly, downsizing Baby Boomers can comfortably afford to buy new for cash using the proceeds from their home sale - so they may elect to buy new, as indeed they have earned the right to. </p>
<h3 class="post-title entry-title"> </h3>
<p>Thirdly, and unfortunately, some would-be investors attend 'educational' courses which convince them that there are great benefits to buying new, often not realising that the apparent white knights doing the educating are actually salesmen (sometimes egregiously posing as psuedo-financial advisors).  </p>
<h3 class="post-title entry-title"> </h3>
<p>The middlemen/salesmen may secure up to a 6 percent or greater commission from the developer, unbeknownst to the unsuspecting buyer. Goodness knows how this is still allowed to happen, but nevertheless it does. </p>
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<p>Nascent self-managed super-funds (SMSFs) and inexperienced investors are key target groups for this type of salesman. </p>
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<p>In truth, there actually are tempting depreciation and other deductions available to investors in new properties, since policy makers know that they must attempt to incentivise investors to buy new dwellings in order to stimulate construction. </p>
<h3 class="post-title entry-title"> </h3>
<p>Strangely these generous benefits are rarely mentioned in the now-traditional annual negative gearing debate.</p>
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<h3 class="post-title entry-title"><span style="color: #333333; font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12px;"><a href="/images/2016/10/20/ATO.jpg" target="_blank">Click to enlarge</a></span></h3>
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<div>That said, if anyone ever throws you this sales pitch in order to flog you a new property, tell them you're considering buying a one-year-old dwelling for the same benefits and gauge their reaction (if they're dead set against the idea, you'll know why: obviously they are angling for a sales commission from the developer). </div>
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<div>Fourthly, a high percentage share of the new dwelling stock in Australia is bought by non-residents, a cohort typically restricted from buying established stock (except in certain circumstances, such as for development purposes). </div>
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<div>The Foreign Investment Review Board (FIRB) typically restricts non-residents to new properties or development projects in order to encourage construction, and by and large this policy works. </div>
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<div>For this reason - especially with lenders less than keen to extend finance to offshore buyers of late - non-settlements on new apartments will be one of the most keenly observed market metrics over the next two years. </div>
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<div>And fifthly, purchasing new just suits some buying demographics. It is frequently said that Chinese buyers like unused property to the extent that some don't even let out their new dwellings, in order to keep them in a pristine condition.</div>
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<div><strong><span>Incentives for first homebuyers</span></strong></div>
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<div>For first homebuyers, there are typically incentives available to buy or construct new homes.<br><br>These tend to vary over time, and by state and territory. The available incentives as at September 2016 are summarised in the table below. </div>
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<br><div>In the same way that I wouldn't buy a new investment property for the depreciation benefits due to the purchase price premium, first homebuyers should be wary of buying new solely to get their hands on cash grants. </div>
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<div>Fortunately, most young people are quite wise to this, and a larger cash grant doesn't necessarily equate to more buyers. </div>
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<div>In August, for example, the housing finance figures recorded only 6 (six!) owner-occupier commitments for the purchase of new dwellings in the Northern Territory, despite a lavish cash grant of $26,000 being available for first-timers!</div>
<div> </div>
<div>That said, well-targeted grants do tend to be effective, as the recently revised first homebuyer statistics showed. </div>
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<div><strong><span>New dwelling purchases</span></strong></div>
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<div>With such a high share of new dwellings being bought by offshore buyers, particularly from mainland China these days, the domestic housing finance figures only show a part of the story. </div>
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<div>Overall, the August housing finance commitments figures showed domestic transaction volumes for new builds holding up well, which is good news for the economy given that there is a record number of completions due over the next two years. </div>
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<br><div>At the state level, when the original data is plotted in rolling annual terms, it appears that volumes began to increase steadily in each of the most populous states from around 2012 when the interest rate easing cycle commenced in earnest.</div>
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<div><a href="/images/2016/10/20/A2.jpg" target="_blank">Click to enlarge</a></div>
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<br><strong><span style="text-decoration: underline;">Stay and renovate</span></strong><br><div> </div>
<div>Finally for today, various forecasters have long predicted a boom in major renovations.</div>
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<div>Generally this makes sense as a concept, for the stamp duty thresholds for the two largest cities were originally designed with much lower purchase prices in mind.</div>
<div> </div>
<div>As such, from the sublime to the ridiculous, stamp duty collection in Sydney has risen to what would previously have been thought of as absurd heights - the state's coffers are literally overflowing!</div>
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<div>Homeowners should therefore be incentivised to stay put and renovate rather than incur the punitive transaction costs of moving. </div>
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<div>In the event there has indeed been a decent boom in major renovations activity in Sydney, but to date this has not been replicated elsewhere, and the anticipated contribution to GDP has not yet materialised.</div>
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<br><p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

Five reasons buyers seek new dwellings: Pete Wargent

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<p>Research from Queensland University of Technology has discovered a little-known infrastructure tax that, when the cost is passed on by developers, can potentially add more than $130,00 to the price of a new home.</p>
<p>QUT property economics lecturer Dr Lyndall Bryant said house prices in Brisbane increased an average of $3.95 for every $1 of infrastructure charges levied to property developers.</p>
<p>He said in fast-growing areas governments don't have the funds to build all the infrastructure new housing estates need and existing communities refuse to pay for it by way of higher rates and taxes. The <span style="line-height: 1.3em;">infrastructure charges are levied at the time of developmental approval. </span></p>
<p><span style="line-height: 1.3em;">"Property developers claim it is uneconomical for them to pay these charges and pass them on to homebuyers, making new houses unaffordable for many," he said.</span></p>
<p><span style="line-height: 1.3em;">"In Queensland the maximum infrastructure charge for a new three or more bedroom house was set at $28,000 in 2011. </span><span style="line-height: 1.3em;">My research found that the 'over-passing' ratio for new house prices is 469%, and 356% for existing houses.</span></p>
<p>"Applying the 2011 maximum infrastructure charge, this suggests the price of a new house increases by as much as $131,320 and the price of an existing house by $99,680. <span style="line-height: 1.3em;">This means that this one government charge could add nearly $1,000 a month to the average 30 year mortgage."</span></p>
<p><span style="line-height: 1.3em;">The study covered infrastructure charges on 27,752 house and 13,739 lot prices in Brisbane from 2005 - 2011.</span></p>
<p>"This study suggests the current policy of infrastructure charges is an inefficient tax that adversely affects housing affordability, with homeowners ultimately paying many times the actual cost of the urban infrastructure, with the banks being the winners, benefitting from the increases to mortgage payments," he said.</p>
<p>"The rate of over-passing of the charges, which were effectively a tax, was far higher in Australia than had been observed in the United States."</p>
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mick.cee-iDmgDDAmu8

Little-known infrastructure tax sending Brisbane property prices soaring

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<p>In proposing reforms to negative gearing structures, any government should take a long-term view and classify ‘new’ stock as any property up to 10 years old and not pull the rug from under the feet of investors abruptly because of economic implications, according to property research and investment firm Aviate Group. </p>
<p>“Those looking to abolish negative gearing, as well as those whom support this, need to perhaps be reminded as to what it is that investors bring to the table. Not just in terms of providing rental stock to areas that may really need it, but also for the economy at large,” said Aviate managing director Neil Smoli.</p>
<p>Investors’ focus on wealth creation through property stimulates the economy, creates jobs and fosters a more self-sufficient population which has the knock-on effect of alleviating the burden of social housing and dependence on aged care facilities by an ageing population, added Smoli.</p>
<p>“Investors make a strong and undeniable contribution to housing options by way of rental stock. This provides direct housing options for those that do not have the means or have not yet sought the right advice that would allow them to enter the property market.”</p>
<p>There also hasn’t been near enough debate, or thought, says Smoli, of the definition of ‘new’ property stock when it comes to the proposed reforms, which are being weighted not just by the Opposition, but also by the Nationals, albeit under a varied model.</p>
<p> “Applying negative gearing reforms that apply to all newly built properties in terms of their physical construction and occupation could have a knock-on effect whereby investors may ‘short-sell’ or ‘flip’ these properties in order to maximise their financial benefits,” he said.</p>
<p>“If it is to be successful, any well considered policy surrounding negative gearing should also take into account how long a property is, or has been, held by an investor.</p>
<p>“There has to be some kind of incentive for investors to take the universally respected view that property investment is most optimal when a long term view is held, rather than a short term hold to turn a quick profit by selling when a market is at its cyclical peak.”</p>
<p>In addition to rewarding investors that hold onto their new properties for longer, Smoli says, there should also be a period of at least a year before any successful changes to negative gearing policy are implemented.</p>
<p>A property should be viewed as ‘new’ when it is up to 10 years old to minimise any potential fallout or exodus from the marketplace. </p>
<p>“It typically takes five to six years for an investment property to become neutral, that is, for the rent received to balance the interest payable. This is influenced by the interest rate of the day, the net rental income received after costs such as management fees, letting fees, body corporate fees and outgoings are taken into account, the investor’s marginal tax rate as well as depreciation allowances,” he said.</p>
<p>“A timeline of this duration for the investor to be able to use negative gearing seems logical and fair.”</p>
<p>Additionally, whatever changes are implemented in the context of property and associated negative gearing, the same should apply to shares and the equities market to ensure all asset classes are on an even playing field. </p>
<p><strong>Stamp duty: another opportunity for reform</strong></p>
<p>In addition to possible negative gearing policy reform, Smoli also believes there are other opportunities for reform that could create a fairer balance for the property industry’s many stakeholders, particularly as the rampant transactional activity of recent years has softened in recent months.</p>
<p>At the top of the list is stamp duty, according to him.</p>
<p>“Most industry professionals seem to be in agreement that stamp duty should be phased out without delay. However in the absence of its complete abolition, the market should at least be able to rely on some national consistency when it comes to the application of this tax,” Smoli said.</p>
<p>“Let’s not forget we were promised an end to stamp duty when the GST was introduced. It’s clear that state governments are addicted to the revenue, but the economic benefits of abolishing stamp duty in terms of transactional activity, not to mention the fact it would relieve a significant burden for first home buyers, warrants genuine consideration at the Federal level.</p>
<p>“Failing this, perhaps it is time to look at more effective stamp duty models and, more importantly, introduce some national consistency as to how the tax is applied,” Smoli said.</p>
<p>He pointed to the implementation of a sliding scale, whereby the stamp duty payable depends on the phase in the construction cycle that the dwelling is at when the purchase is made, could be considered as the basis for a national model. </p>
<p>“A fairer system, which has been used in some states including Victoria and South Australia, could be based on the principle that the earlier in the construction phase a dwelling is, the less stamp duty should be payable by the purchaser on that property,” Smoli said..</p>
<p>“In this way, those who purchase a property off-the-plan or early in the construction phase are rewarded for that early purchase, creating heightened demand for new supply and supporting the broader market.</p>
<p>“It makes sense to lessen the burden on buyers of off-the-plan properties, as these buyers are directly contributing to demand for new housing construction.</p>
<p>“A nationally consistent approach to stamp duty would also make it easier for investors to purchase properties outside their own state, fuelling demand on a broader scale. </p>
<p>“Like the conversation happening around negative gearing at the moment, so should the industry seek to elevate the issue of stamp duty. Until its abolition comes to fruition, and the promise of many years ago is finally upheld, the more alternatives we consider as an industry the better,” he said.</p>
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prateek24-ezbwHMbNAk

Negative gearing changes need long-term approach: Aviate Group MD

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<p><span style="line-height: 1.3em;">New dwelling approvals for February are up from January according to the ABS, with new home building approvals up by 3.1 percent.</span></p>
<p><span style="line-height: 1.3em;">Senior Housing Industry Association economist Shane Garrett said the monthly lift in approvals activity during February is welcome but it seems increasingly likely that approvals peaked late last year and that the volume of new home building activity is set to ease as 2016 progresses.</span></p>
<p><span style="line-height: 1.3em;">“Our latest forecasts indicate that the about 200,000 new dwelling starts will take place during 2016, a reduction of 9.2 percent from last year," he said.</span></p>
<p><span style="line-height: 1.3em;">"This would still represent a very high level of output by historic standards. However, the risk remains that new home building output will fall below the levels required to meet long term demand. The onus remains on policy makers to tackle this problem, and confront issues like planning delays, land supply shortfalls and heavily inefficient taxes like conveyance stamp duty. </span></p>
<p>"During February 2016, new home building approvals rose by 3.1 percent. <span style="line-height: 1.3em;">This comprised a 1.0 percent decline in detached house approvals but the more volatile multi-unit segment achieved growth of some 7.7 percent in approvals during the month. Over the year to February, new dwelling approvals totalled 232,194. The flow of data over recent months indicates that approvals may have hit their high point in the year to October 2015, with a record 239,250 approvals registered over that 12 month period."</span></p>
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<p>During February 2016, total seasonally adjusted new home building approvals saw the largest increase in Tasmania (+24.5 percent) with growth also occurring in New South Wales (+14.3 percent) and Queensland (+9.5 percent). Approvals declined in Victoria (-12.8 percent), South Australia (-10.9 percent) and Western Australia (-7.6 percent). In trend terms, approvals saw a 9.2 percent <span style="line-height: 1.3em;">decline in the Northern Territory but rose by 5.0 percent in the Australian Capital Territory.</span></p>
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po-LsXgBTHBmX

February boost for new dwelling approvals: HIA

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<p>Australia has an oversupply of up to 164,000 dwellings, including parts of the major cities, countering industry and government suggestions that Australia is suffering a housing shortage, a new study by The Australian National University (ANU) has found.</p>
<p>The <em>Regional Housing Supply and Demand in Australia Working Paper</em>, by Associate Professor Ben Phillips and researcher Cukkoo Joseph of the ANU Centre for Social Research and Methods analysed 15 years' worth of Census data and building approvals.</p>
<p>It also found Australia had an oversupply in some markets such as parts of inner city Sydney, Melbourne and Brisbane.</p>
<p>"The surplus is not particularly substantial, but certainly suggest that housing supply in and of itself is probably not the primary driver of house-price growth in Australia. There are other factors that are going on," Phillips said.</p>
<p>"We've looked at factors like changes in household types and dwelling types and unoccupied dwellings which we don't think have been taken into account in other studies in any substantial way in the past, and certainly not at the regional level.</p>
<p>"The standard line of governments and industry seems to be that housing supply is a big problem in Australia. No doubt there are some areas where it is. But overall we don't see the housing shortage that's often talked about - in fact we see that there is a surplus."</p>
<p>In addition to analysing data from the 2001 and 2016 Census, the ANU researchers looked at Australian Bureau of Statistics building approvals and survey of income and housing.</p>
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<p>TOP 5 SHORTAGE AND SURPLUS REGIONS BY MAJOR STATE</p>
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<p>Housing Shortage Regions NSW</p>
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<p>NSW</p>
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<p>Region</p>
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<p>Shortage Dwellings</p>
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<p>% Stock</p>
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<p>1</p>
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<p>Wyong</p>
</td>
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<p align="right">2,574</p>
</td>
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<p align="right">3.8%</p>
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<p>2</p>
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<p>Fairfield</p>
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<p align="right">1,808</p>
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<p align="right">3.1%</p>
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<p>3</p>
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<p>Shoalhaven</p>
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<p align="right">1,700</p>
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<p align="right">3.1%</p>
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<p>4</p>
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<p>Hurstville</p>
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<p align="right">1,612</p>
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<p align="right">3.4%</p>
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<p>5</p>
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<p>Strathfield - Burwood - As</p>
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<p align="right">1,596</p>
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<p align="right">2.7%</p>
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<p>Housing Surplus Regions NSW</p>
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<p>NSW</p>
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<p>Region</p>
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<p>Surplus Dwellings</p>
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<p>% Stock</p>
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<p>1</p>
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<p>Sydney Inner City</p>
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<p align="right">5,878</p>
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<p align="right">5.2%</p>
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<p>2</p>
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<p>Richmond Valley - Coastal</p>
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<p align="right">2,056</p>
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<p align="right">5.5%</p>
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<p>3</p>
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<p>Newcastle</p>
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<p align="right">1,988</p>
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<p align="right">2.7%</p>
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<p>4*</p>
</td>
<td nowrap>
<p>Snowy Mountains</p>
</td>
<td nowrap>
<p align="right">1,869</p>
</td>
<td nowrap>
<p align="right">16.6%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>5</p>
</td>
<td nowrap>
<p>Tweed Valley</p>
</td>
<td nowrap>
<p align="right">1,573</p>
</td>
<td nowrap>
<p align="right">3.7%</p>
</td>
</tr>
<tr>
<td colspan="3" nowrap>
<p>* Subject to non-private dwelling fluctuations eg hotels</p>
</td>
<td nowrap> </td>
</tr>
<tr>
<td nowrap> </td>
<td nowrap> </td>
<td nowrap> </td>
<td nowrap> </td>
</tr>
<tr>
<td colspan="2" nowrap>
<p>Housing Shortage Regions VIC</p>
</td>
<td nowrap> </td>
<td nowrap> </td>
</tr>
<tr>
<td nowrap>
<p>VIC</p>
</td>
<td nowrap>
<p>Region</p>
</td>
<td nowrap>
<p>Shortage Dwellings</p>
</td>
<td nowrap>
<p>% Stock</p>
</td>
</tr>
<tr>
<td nowrap>
<p>1</p>
</td>
<td nowrap>
<p>Mornington Peninsula</p>
</td>
<td nowrap>
<p align="right">1,193</p>
</td>
<td nowrap>
<p align="right">1.3%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>2</p>
</td>
<td nowrap>
<p>Casey - South</p>
</td>
<td nowrap>
<p align="right">1,180</p>
</td>
<td nowrap>
<p align="right">2.1%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>3</p>
</td>
<td nowrap>
<p>Surf Coast - Bellarine Pen</p>
</td>
<td nowrap>
<p align="right">679</p>
</td>
<td nowrap>
<p align="right">1.6%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>4</p>
</td>
<td nowrap>
<p>Casey - North</p>
</td>
<td nowrap>
<p align="right">664</p>
</td>
<td nowrap>
<p align="right">1.4%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>5</p>
</td>
<td nowrap>
<p>Cardinia</p>
</td>
<td nowrap>
<p align="right">380</p>
</td>
<td nowrap>
<p align="right">1.1%</p>
</td>
</tr>
<tr>
<td colspan="2" nowrap>
<p>Housing Surplus Regions VIC</p>
</td>
<td nowrap> </td>
<td nowrap> </td>
</tr>
<tr>
<td nowrap>
<p>VIC</p>
</td>
<td nowrap>
<p>Region</p>
</td>
<td nowrap>
<p>Surplus Dwellings</p>
</td>
<td nowrap>
<p>% Stock</p>
</td>
</tr>
<tr>
<td nowrap>
<p>1</p>
</td>
<td nowrap>
<p>Melbourne City</p>
</td>
<td nowrap>
<p align="right">3,994</p>
</td>
<td nowrap>
<p align="right">5.3%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>2</p>
</td>
<td nowrap>
<p>Whittlesea - Wallan</p>
</td>
<td nowrap>
<p align="right">2,637</p>
</td>
<td nowrap>
<p align="right">3.4%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>3</p>
</td>
<td nowrap>
<p>Banyule</p>
</td>
<td nowrap>
<p align="right">2,297</p>
</td>
<td nowrap>
<p align="right">4.6%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>4</p>
</td>
<td nowrap>
<p>Port Phillip</p>
</td>
<td nowrap>
<p align="right">2,127</p>
</td>
<td nowrap>
<p align="right">3.7%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>5</p>
</td>
<td nowrap>
<p>Monash</p>
</td>
<td nowrap>
<p align="right">2,092</p>
</td>
<td nowrap>
<p align="right">3.1%</p>
</td>
</tr>
<tr>
<td nowrap> </td>
<td nowrap> </td>
<td nowrap> </td>
<td nowrap> </td>
</tr>
<tr>
<td colspan="2" nowrap>
<p>Housing Shortage Regions QLD</p>
</td>
<td nowrap> </td>
<td nowrap> </td>
</tr>
<tr>
<td nowrap>
<p>QLD</p>
</td>
<td nowrap>
<p>Region</p>
</td>
<td nowrap>
<p>Shortage Dwellings</p>
</td>
<td nowrap>
<p>% Stock</p>
</td>
</tr>
<tr>
<td nowrap>
<p>1</p>
</td>
<td nowrap>
<p>Sunnybank</p>
</td>
<td nowrap>
<p align="right">702</p>
</td>
<td nowrap>
<p align="right">4.1%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>2</p>
</td>
<td nowrap>
<p>Buderim</p>
</td>
<td nowrap>
<p align="right">538</p>
</td>
<td nowrap>
<p align="right">2.5%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>3</p>
</td>
<td nowrap>
<p>Ipswich Hinterland</p>
</td>
<td nowrap>
<p align="right">515</p>
</td>
<td nowrap>
<p align="right">2.0%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>4</p>
</td>
<td nowrap>
<p>Bribie - Beachmere</p>
</td>
<td nowrap>
<p align="right">290</p>
</td>
<td nowrap>
<p align="right">1.7%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>5</p>
</td>
<td nowrap>
<p>Sunshine Coast Hinterland</p>
</td>
<td nowrap>
<p align="right">262</p>
</td>
<td nowrap>
<p align="right">1.3%</p>
</td>
</tr>
<tr>
<td colspan="2" nowrap>
<p>Housing Surplus Regions QLD</p>
</td>
<td nowrap> </td>
<td nowrap> </td>
</tr>
<tr>
<td nowrap>
<p>QLD</p>
</td>
<td nowrap>
<p>Region</p>
</td>
<td nowrap>
<p>Surplus Dwellings</p>
</td>
<td nowrap>
<p>% Stock</p>
</td>
</tr>
<tr>
<td nowrap>
<p>1</p>
</td>
<td nowrap>
<p>Brisbane Inner</p>
</td>
<td nowrap>
<p align="right">4,537</p>
</td>
<td nowrap>
<p align="right">12.7%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>2</p>
</td>
<td nowrap>
<p>Townsville</p>
</td>
<td nowrap>
<p align="right">4,259</p>
</td>
<td nowrap>
<p align="right">5.3%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>3</p>
</td>
<td nowrap>
<p>Cairns - South</p>
</td>
<td nowrap>
<p align="right">3,516</p>
</td>
<td nowrap>
<p align="right">8.1%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>4</p>
</td>
<td nowrap>
<p>Gladstone - Biloela</p>
</td>
<td nowrap>
<p align="right">3,384</p>
</td>
<td nowrap>
<p align="right">9.4%</p>
</td>
</tr>
<tr>
<td nowrap>
<p>5</p>
</td>
<td nowrap>
<p>Surfers Paradise</p>
</td>
<td nowrap>
<p align="right">2,878</p>
</td>
<td nowrap>
<p align="right">12.3%</p>
</td>
</tr>
</tbody></table>
<p>"We appear to have built enough dwellings, and there's an oversupply in some markets such as some parts of inner city Sydney, Melbourne and Brisbane, which could have interesting implications for the economy,"  Phillips said.</p>
<p>"If this research is right, it suggests we've built enough dwellings, and there's not likely to be any great gain in building more houses in addition to what's required."</p>
<p>In the regions, many homes were built in mining centres over the past 15 years before the mining boom ended.</p>
<p>"Particularly in outback Western Australia, regional WA and north Queensland, many of these areas have a housing surplus," Phillips said.</p>
<p>"We also find Canberra has a housing surplus, especially among higher-density dwellings in the town centres.</p>
<p>"We've found that we've built more than what population growth would require.</p>
<p>"It doesn't mean that it won't get soaked up in coming years, but it does suggest there won't be as much need for new home building in the near future, which could have knock-on to the broader economy."</p>
<p>The <em>Regional Housing Supply and Demand in Australia Working Paper</em> is <a href="http://csrm.cass.anu.edu.au/research/publications/regional-housing-supply-and-demand-australia" target="_blank">available online</a><a href="https://www.propertyobserver.com.au/Australia%20has%20an%20oversupply%20of%20up%20to%20164,000%20dwellings,%20including%20parts%20of%20the%20major%20cities,%20countering%20industry%20and%20government%20suggestions%20that%20Australia%20is%20suffering%20a%20housing%20shortage,%20a%20new%20study%20by%20The%20Australian%20National%20University%20(ANU)%20has%20found.%20%20The%20Regional%20Housing%20Supply%20and%20Demand%20in%20Australia%20Working%20Paper,%20by%20Associate%20Professor%20Ben%20Phillips%20and%20researcher%20Cukkoo%20Joseph%20of%20the%20ANU%20Centre%20for%20Social%20Research%20and%20Methods%20analysed%2015%20years'%20worth%20of%20Census%20data%20and%20building%20approvals.%20%20It%20found%20Australia%20had%20an%20oversupply%20in%20some%20markets%20such%20as%20parts%20of%20inner%20city%20Sydney,%20Melbourne%20and%20Brisbane.%20%20%22The%20surplus%20is%20not%20particularly%20substantial,%20but%20certainly%20suggest%20that%20housing%20supply%20in%20and%20of%20itself%20is%20probably%20not%20the%20primary%20driver%20of%20house-price%20growth%20in%20Australia.%20There%20are%20other%20factors%20that%20are%20going%20on,%22%20Dr%20Phillips%20said.%20%20%22We've%20looked%20at%20factors%20like%20changes%20in%20household%20types%20and%20dwelling%20types%20and%20unoccupied%20dwellings%20which%20we%20don't%20think%20have%20been%20taken%20into%20account%20in%20other%20studies%20in%20any%20substantial%20way%20in%20the%20past,%20and%20certainly%20not%20at%20the%20regional%20level.%20%20%22The%20standard%20line%20of%20governments%20and%20industry%20seems%20to%20be%20that%20housing%20supply%20is%20a%20big%20problem%20in%20Australia.%20No%20doubt%20there%20are%20some%20areas%20where%20it%20is.%20But%20overall%20we%20don't%20see%20the%20housing%20shortage%20that's%20often%20talked%20about%20-%20in%20fact%20we%20see%20that%20there%20is%20a%20surplus.%22%20%20In%20addition%20to%20analysing%20data%20from%20the%202001%20and%202016%20Census,%20the%20ANU%20researchers%20looked%20at%20Australian%20Bureau%20of%20Statistics%20building%20approvals%20and%20survey%20of%20income%20and%20housing.%20%20%22We%20appear%20to%20have%20built%20enough%20dwellings,%20and%20there's%20an%20oversupply%20in%20some%20markets%20such%20as%20some%20parts%20of%20inner%20city%20Sydney,%20Melbourne%20and%20Brisbane,%20which%20could%20have%20interesting%20implications%20for%20the%20economy,%22%20Dr%20Phillips%20said.%20%20%22If%20this%20research%20is%20right,%20it%20suggests%20we've%20built%20enough%20dwellings,%20and%20there's%20not%20likely%20to%20be%20any%20great%20gain%20in%20building%20more%20houses%20in%20addition%20to%20what's%20required.%22%20%20In%20the%20regions,%20many%20homes%20were%20built%20in%20mining%20centres%20over%20the%20past%2015%20years%20before%20the%20mining%20boom%20ended.%20%20%22Particularly%20in%20outback%20Western%20Australia,%20regional%20WA%20and%20north%20Queensland,%20many%20of%20these%20areas%20have%20a%20housing%20surplus,%22%20Dr%20Phillips%20said.%20%20%22We%20also%20find%20Canberra%20has%20a%20housing%20surplus,%20especially%20among%20higher-density%20dwellings%20in%20the%20town%20centres.%20%20%22We've%20found%20that%20we've%20built%20more%20than%20what%20population%20growth%20would%20require.%20%20%22It%20doesn't%20mean%20that%20it%20won't%20get%20soaked%20up%20in%20coming%20years,%20but%20it%20does%20suggest%20there%20won't%20be%20as%20much%20need%20for%20new%20home%20building%20in%20the%20near%20future,%20which%20could%20have%20knock-on%20to%20the%20broader%20economy.%22%20%20The%20Regional%20Housing%20Supply%20and%20Demand%20in%20Australia%20Working%20Paper%20is%20available%20at%20http:/csrm.cass.anu.edu.au/research/publications/regional-housing-supply-and-demand-australia." target="_blank">.</a></p>
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j.ballantyne1990-6AQqhLzZaK

Fresh housing supply won't necessarily lead to affordability: ANU study

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<p>Buyers of new residential property after 1 July 2018 need to be aware they will be responsible for making sure the GST on their purchase is paid to the ATO as part of the purchase settlement process. The laws are aimed at reducing tax evasion in the property development sector, that require buyers to pay the GST at settlement.</p>
<p>The GST will not be an additional cost to buyers as it’s already part of any contracted purchase.</p>
<p>The chief executive of the Property Council of Australia, Ken Morrison, said this was one of the biggest changes to the way GST was collected on property since its introduction almost two decades ago.</p>
<p>“Under this change, buyers of new residential properties or subdivision of potential residential land will be responsible for remitting the GST amount to the ATO on or before settlement,” Mr Morrison said.</p>
<p>“Previously, this was done by the developer. The overwhelming majority did the right thing and passed the GST they collected through to the ATO, but this measure has been introduced to deal with the minority who didn’t through so-called 'phoenixing'.”</p>
<p>The new process will mean additional steps in the settlement process for residential property buyers, including submitting forms to the ATO and separating the GST from the purchase price of the property.</p>
<p>This could affect up to 70,000 property transactions a year.</p>
<p>“People buying property after 1 July should talk to their solicitor or settlement agent to ensure they have the right arrangements in place to meet this new requirement and ensure a smooth settlement process,” Mr Morrison said.</p>
<p>There are transitional arrangements in place for contracts entered into before 1 July 2018 and which settle before 1 July 2020.</p>
<p>Mr Morrison said Property Council members had been investing in systems and staff training to support the introduction of the new process and to mimimise disruption or inconvenience to their customers.</p>
<p>“We’ll closely monitor the implementation of the change and continue to consult with Government on issues that may arise during the transition.”</p>
<p>The change to GST payment is the biggest of a number of federal and state property- related changes that come into effect on 1 July.</p>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="section">
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<p><span>Other measures include:</span></p>
<p><span>Federal</span></p>
<p><span>People aged 65 and over will be able to contribute $300,000 from the sale of their family home into superannuation</span></p>
<p><span>Queensland</span></p>
</div>
</div>
</div>
<div class="section">
<div class="layoutArea">
<div class="column">
<ul>
<li>
<p><span>Additional Foreign Acquirer Duty (residential) to increase from 3% to 7%.</span></p>
</li>
<li>
<p><span>New land tax category for holdings over $10m – 2.25% for individuals and 2.5%</span></p>
<p><span>for trusts, companies or absentee landholders.</span></p>
</li>
<li>
<p><span>Waste disposal levy $70 per tonne.</span></p>
</li>
</ul>
</div>
</div>
</div>
<div class="layoutArea">
<div class="column">
<p><span>New South Wales</span></p>
<ul>
<li>
<p><span>Local Infrastructure Levy caps will be increased in areas not funded by the Local Infrastructure Growth Scheme:</span></p>
<p><span>o </span><span>$40,000 for greenfield areas</span><span>o </span><span>$30,000 for infill areas</span></p>
</li>
<li>
<p><span>From 1 July,</span></p>
<p><span>South Australia</span></p>
<p><span>ACT</span></p>
</li>
</ul>
</div>
</div>
<img src="blob:https://www.urban.com.au/1bb22a79-4780-4658-89ea-656f7047f32f" alt="page2image9448" width="311.520000" height="14.880000"><div class="layoutArea">
<div class="column">
<p><span>eConveyancing will replace many of the paper and manual</span></p>
</div>
</div>
<img src="blob:https://www.urban.com.au/80e4a9b4-e8bc-422a-be59-22a0431fc3d7" alt="page2image10376" width="393.600000" height="13.920000"><div class="layoutArea">
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<p><span>processes traditionally involved in property transactions with secure online</span></p>
</div>
</div>
<img src="blob:https://www.urban.com.au/3edb595d-a49b-4437-9a0d-343251c98e22" alt="page2image11304" width="413.040000" height="13.920000"><div class="layoutArea">
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<p><span>processes. All standalone transfers and caveats must be lodged electronically</span></p>
</div>
</div>
<img src="blob:https://www.urban.com.au/5891ddef-2987-4406-9a39-cf64fde767d7" alt="page2image12272" width="76.080000" height="13.920000"><div class="layoutArea">
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<p><span>from this date.</span></p>
</div>
</div>
<div class="section">
<div class="layoutArea">
<div class="column">
<ul>
<li>
<p><span>Final phase of the full abolition of commercial stamp duty.</span></p>
</li>
<li>
<p><span>Off-the-plan stamp duty concession measure ends on 30 June 2018.</span></p>
</li>
</ul>
</div>
</div>
</div>
<div class="section">
<div class="layoutArea">
<div class="column">
<ul>
<li>
<p><span>Stamp duty abolished for first home buyers who earn less than $160,000 for new or existing homes</span></p>
</li>
<li>
<p><span>Abolition of first home buyers grant</span></p>
</li>
</ul>
</div>
</div>
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July 1 sees different GST rules for new residential property buyers

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<p>GUEST OBSERVATION</p>
<p>This month, yet another policy agreement on housing between the Commonwealth and state and territory governments came into effect. The National Housing and Homelessness Agreement is the latest version of a 73-year-long series of such intergovernmental pacts to ensure affordable housing for lower-income Australians and to fund services for the homeless.</p>
<p>It replaces the ten-year National Affordable Housing Agreement and a series of partnerships since 2008 to tackle homelessness – the National Partnership Agreement on Homelessness. The latest agreement has more achievable performance indicators than its predecessors. It also requires the states to report on their annual financial contributions – a worthy step up for transparency.</p>
<p>But, at a time of growing population and enduring housing stress, the Commonwealth’s latest budget promise to maintain its current funding contribution of A$1.3 billion for the housing agreement means there has been no increase in real funding. Keeping it at what it has been isn’t enough to cover the costs of current services, let alone increase them.</p>
<p>So, there is a disconnect between the lofty goal of improving access to affordable, safe and sustainable housing and the funding capable of supporting it. Until this funding shortfall is addressed, any new national housing and homelessness agreements will continue to be essentially different in name only.</p>
<p><strong>What’s new this time?</strong></p>
<p>Compared to recent former agreements, three matters stand out as new or refreshed.</p>
<p>First is the policy breadth. Unlike its predecessors, the new agreement aspires to improve access to housing “across the housing spectrum”. This refers to the full suite of housing tenures – from crisis housing to home ownership. Within this spectrum the Commonwealth has set several immediate priorities:</p>
<ul>
<li>achieving an efficient, responsive and well-managed social housing system</li>
<li>support for community housing and affordable housing models that can viably increase housing supply</li>
<li>tenancy reform that encourages security of tenure in the private rental market</li>
<li>strategies to promote market supply and efficiency, including planning system reforms, land-release initiatives and support for home ownership.</li>
</ul>
<p>This broadened coverage is generally welcome, but it falls short of satisfying the calls for a national housing strategy. This means many national policies with major impacts on housing demand and cost – such as taxes on housing investment, immigration levels and income support for renters – remain outside the influence of the agreement. Such policies also strongly influence the prospects of reducing housing stress.</p>
<p>The second, and arguably biggest, set of changes concerns accountability. This includes an expanded list of performance measures, the Commonwealth leading a standardised approach to data measures, and a formal independent Productivity Commission review of the agreement to be conducted within four years.</p>
<p>The new performance indicators replace the targets from 2008, which were never achieved. The failed measures were quantitative in nature, while the new ones simply adopt a requirement for progress (an increase or a decrease, as appropriate), which can be more readily achieved.</p>
<p>For example, the Rudd government’s pledge to halve the rate of homelessness by 2020 has shifted to “decreases in people experiencing homelessness and repeat homelessness”. Similarly, the 2008 commitment to reduce the proportion of low-income renter households experiencing rental stress by 10% has been replaced by a commitment to simply reduce the proportion of such households.</p>
<p>A third feature is a requirement for states and territories to annually publish housing strategies. Stakeholders will be able to judge and compare the merit of these published blueprints. These will come after a new set of high-level bilateral agreements negotiated between each state and territory and the Commonwealth.</p>
<p>This highlights differences in housing conditions between jurisdictions and incorporates state-level priorities in addition to those of the Commonwealth. Those published so far vary considerably in ambition and specificity.</p>
<p><strong>The elephant in the room</strong></p>
<p>While there are positive directions in the new agreement, the funding deficit remains an issue. Despite not increasing its funding, the Commonwealth hopes the states and territories will increase theirs.</p>
<p>The Commonwealth, however, has failed to extend or replace other large housing programs that operated in the past decade. These included the now closed National Rental Affordability Scheme, which resulted in over 36,000 new affordable rental houses, and a A$5 billion national partnership to improve housing supply and conditions in remote (largely Indigenous) communities.</p>
<p>As a result there is now less federal funding for new social and affordable housing than at any time over the last decade.</p>
<p><img src="https://counter.theconversation.com/content/99936/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">With so much detailed by so many about the manifest inadequacy in funding required to meet housing need in Australia, we can regrettably predict that the new agreement will not contribute much at all to an increased supply of social and affordable housing. Indeed, this is tacitly acknowledged – the agreement’s carefully crafted performance indicators include no such measure.</p>
<p><em><strong>Vivienne Milligan</strong>, Visiting Senior Fellow - City Futures Research Centre, Housing Policy and Practice, UNSW</em></p>
<p><em>This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/the-new-national-housing-agreement-wont-achieve-its-goals-without-enough-funding-99936" target="_blank">original article</a>.</em></p>
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