It’s all talk with housing

WITH GARETH KENT, DIRECTOR PRESTON ROWE PATERSON

 

We have just been treated to 10 days of housing policies by our Premier.

It seems the penny has dropped, and someone has finally worked out that we are in a housing crisis. Who knew? My take is as follows

Day 1: Delivering 50 new “Train and Tram Zone” Activity Centres

Summary, using land left over from the North East Link and Suburban Rail network, The government have identified 50 sites for High density Government housing.

My Takeaway: There is nothing in this strategy for Geelong or regional Victoria. But it was comical to see the demonstrations against it in Brighton, which has a median house price of $3.3 million. I have never seen so many Louis Vuitton handbags in one place.

Day 2: Off-the-plan stamp duty concessions

A one-year stamp duty concession to make buying off-the-plan apartments, units, and townhouses.

My Takeaway: This actually might help our region, especially Geelong CBD, which at present is unfeasible for development, due to the lack of yield allowed within the Central Geelong Framework Plan, low apartment growth and high construction costs. A saving of the stamp duty for buyers, will allow the developers to charge slightly more, and hence some fringe developments might actually get delivered.

Day 3: Funding more infrastructure where homes are getting built

The creation a new system for property developers to contribute to funding for local infrastructure, parks and services in the areas where they build more homes.

My Takeaway: Typical. Give with one hand, take with the other. This is just another tax on developers, to add to the 55 other property taxes this year. This will have a negative impact on supply and discourage development. On the surface the idea is good, but in an environment of high tax and high construction costs, more costs to developers, discouraging them to invest in Victoria, is the last thing we need.

Day 4: Unlocking greenfield areas

Outlining a plan and timeline for 27 new greenfield areas over the next decade.

My Takeaway: This is hardly a new thing, councils have been mandated to have 15 years of supply in place at any one time. Obviously Day 4 was a slow day.

Day 5: Building & Plumbing Commission Integration

The Building & Plumbing Commission will integrate all aspects of building quality control – regulation, insurance, and dispute resolution – into one agency.

My Takeaway: This is about ensuring trades adhere to regulation and do a good job essentially. Big woop. One would have thought that a governments job is to provide governance in the first place, so perhaps this is catchup?

Day 6: Regional housing plan

An extension of the ‘’Big Build’’, extending the program throughout regional Victoria, with a commitment to build 1300 homes for social housing. For our regions, this will mean that they will build, 238 new homes in the Barwon region. This is ontop of the 12,000 social housing homes promised under the ‘’Big build’’ which were to be built in Melbourne region.

My Takeaway: Any new homes for the social housing are welcome. Homelessness is a real issue in our region and I wont scoff anyone who delivers it. But, this government has only built 180 new homes since it announced the big build was announced in 2020. The state has only added 300 new social housing homes in eight years. One wonders how it will build the additional 11,700 homes in urban Melbourne and now 1,300 homes in regional Victoria.

Day 7: Reforms for renters

The government is introducing measures which protect renters and taking stronger action against rental providers and estate agents who engage in misconduct.

Evictions will be banned, lease break caps, etc.

My Takeaway: Why make it harder than it already is? Rental Laws already had a major overhaul in March 2021, which has driven approximately 19% of investors to sell their rental homes and pull out from investing in Victoria. More changes seem both unnecessary and in contrast the goal of providing more supply to the ease the housing crises. This is just not required!

Day 8: A new era of affordable architectural heritage

The government will introduce a new fast-tracked pathway for residential buildings that meet high standards of quality, design, and sustainability – allowing developers to create better homes without the added costs and delays often associated with projects that may appear unconventional.

My Takeaway: This is welcome, Anything to shorten planning time and cost will help developers provide the additional supply that we need.

Day 9: Pick My Park

The government is set to introduce Pick My Park, a program designed to create and enhance green spaces in expanding suburbs, allowing locals to vote on where and how park upgrade grants are directed and spent.

My Takeaway: Sure this sounds good, but it will have no bearing on the issue of housing supply. I am not sure why this is included in the housing announcements, but it was day 9, so I guess the ideas were getting thin on the ground.

Day 10: The Duties Amendment (More Homes) Bill

The unelected Premier Jacinta Allan closed out the 10 days by re-releasing Day 2 off stamp duty concessions, albeit with a bit more detail. This Bill will introduce a 12-month stamp duty concession for off-the-plan purchases, Under this change, anyone purchasing an eligible property off-the-plan can access a stamp duty concession – not just first home buyers and owner-occupiers – and there will be no value thresholds, making the concession available for properties of any price. Starting from October 21.

My Takeaway: Re-announcing Day 2 is a bit of a let down!

Day 11: More reforms for renters

Six more measures the Labor Government will implement to enhance fairness in renting: 1. Prevent landlords from making questionable bond claims without proof – show us the receipts. 2. Prohibit ‘no fault’ evictions – ensuring you can’t be removed from your home without cause. 3. Eliminate extra fees for paying your own rent, including charges on ‘rent tech’ apps. 4. Ban fees for background checks during rental applications – applying should be free. 5. Limit the costs associated with breaking a lease, preventing excessive compensation demands. 6. Ensure you can request an extra key or fob for your apartment at no additional cost.

My Takeaway: Essentially reannouncing day 7 over again.

In summary, we have ended up with three policies that will perhaps impact supply in a positive way. Four policies that will either increase the cost of owning or managing an investment property, will increase building costs or increase more red tape an bureaucracy. Two polices that will do nothing for supply. And two announcements of something they already announced. Unfortunately, for mine this was a lost opportunity. The goal to create more supply is exactly what we need, but in this case these solutions fall far from the mark.