Property Investment Professionals of Australia (PIPA) has urged the government to take a sensible approach to housing affordability policy, following its discussions with government representatives in April and ahead of the 2017 Federal Budget.
As the peak body for the property investment industry, PIPA has emphasised that regulation and education remained key.
PIPA chair Ben Kingsley welcomed the federal government’s decision to rule out changes to negative gearing and hoped this was reflective of a well-considered approach to addressing affordability issues both on the buying and renting sides.
“Housing affordability is challenging, but there’s no easy fix. We welcome the government’s focus on this issue but urge them to adopt sensible measures that reflect the national market needs, rather than any of the radical changes that have been floated by some corners of the market such as axing negative gearing and SMSF property investment,” Kingsley said.
“PIPA supports thoughtful and varied solutions that promote supply and cool demand and consider the long-term viability of the market and broader economy.”
Kingsley said that while no policy would ever reduce the price of quality property in the inner suburbs of major capital cities due to continued strong demand versus limited and geographically-constrained supply, strategic policies could work to encourage more supply in urban locations.
“Potential policies that could stimulate supply include measures that encourage developers to build more family-friendly accommodation, such as three or four bedroom units. Incentives to encourage the release of bulk land lots in new greenfield areas could also boost supply,” he said.
According to data from CoreLogic, residential housing stock alone is estimated to be worth $6.9 trillion, which is more than three times Australia’s total share market capitalization of $1.7 trillion and our total superannuation pool of $2.2 trillion.
“Any policy changes that could impact the value of this asset class, need to be thoroughly considered,” he added.
“The residential property cycle plays a significant role in the country’s overall economic performance, as we’ve seen by the recent strong stamp duty receipts in New South Wales which have helped to fund the state’s robust infrastructure program.”
Kingsley also reinforced the role property played in building everyday Australians’ wealth.
“While high property prices can be incredibly frustrating for those trying to enter the market, we need to remember that property is a key feature of many everyday Australians’ wealth creation strategies,” he said.
“Property is an accessible, trusted source of wealth that can help just about anyone build a better future. We need to be very careful when it comes to playing around with measures that could hurt the value of these assets.”
Staff Reported, Property Observer, 4 May 2017