Unlocking supply is key to growth
The Real Estate Institute of Australia (REIA) has released its 2022 Pre-Budget Submissionoutlining its priorities for government ahead of the 2022-23 federal budget.
Allowing individuals, businesses and community groups to voice their concerns and budget preferences, REIA – which represents approximately 85% of the real estate industry – is committed to providing its recommendations in relation to the real estate market.
REIA chairman Hayden Groves said the institute’s recommendations this year were to develop Australia’s housing and employment markets by unlocking housing supply to make homes more affordable, creating real estate jobs and helping first-time buyers.
“Housing affordability is a major concern in Australia and will be an ongoing challenge given expected increases in interest rates and subdued wage growth,” he said. “The long-term solution to improving accessibility is to increase supply.
“It is clear that improved urban planning and reduced development costs and burdens are adding much-needed supply to support the current and growing demand for housing in Australia.
“Inventory levels or goods available for sale are in some areas up to 40% reduced from pre-pandemic levels.”
In the submission, REIA suggested that the federal government consider creating and funding a national plan for housing supply and affordability, led by a forum of property ministers.
It was also suggested to review the taxation mechanisms to try to unblock the offer, starting with the stamp duty.
Mr Groves said the weighted average median house price for the eight capitals rose to $961,059 in the year to September 2021, while the proportion of income needed to repay loans rose by 36 .2% nationwide.
“Coinciding with this is a lack of rental supply, which has seen vacancy rates hit extremely low levels of less than 1%,” he said. “Rents are rising and those who need properties to rent are struggling to get a lease.”
A shortage of property managers has also impacted the housing market, with Mr Groves saying the government should have a critical interest in helping solve the estimated shortage of 4,500 property managers – a shortage largely caused by the stress of the national moratorium on tenant evictions.
The submission outlines a plan to increase the number of property managers by establishing a mentorship program for property managers, which would include training, mentoring and retraining.
A second recommendation is to fund a recruitment campaign for property managers, which would immediately help Australians find jobs and focus on transitioning those in sectors affected by COVID-19 into property management.
“We have asked the government to expand the First Home Loan Deposit Scheme to allow more buyers to access the deposit guarantee and expand the First Home Super Saver Scheme,” Mr. Groves.
“Over the past year, there has been a dramatic reduction in lending to first-time buyers, with a 21.5% drop reinforcing the need for the government to help buyers access homes.
“As interest rates rise, offsets should be offered to first-time homebuyers to help their serviceability ease mortgage stress.”
According to REIA Pre-budget submissionthese are the most important areas that require financial assistance to create the greatest impact on the Australian property market.
The submission states that the implementation of these measures will enable Australia to continue to recover from the effects of the COVID-19 pandemic and to prosper by advancing employment, productivity, home ownership and affordability, as well as economic growth.
“At this point in the COVID-19 pandemic and government budget cycle, these are the three most cost-effective recommendations that would give a clear return on investment to Australians, industry and the economy as a whole,” said Mr. said Groves.