Extending HomeBuilder, restoring confidence in the nation’s CBDs and getting international students back to our universities are at the top of property giants’ wish-lists following the announcement of the federal budget for 2020-21.
And while a range of initiatives to stimulate housing construction were outlined, key players from Dexus, Charter Hall and Stockland said that a few tweaks could further help the property industry.
With the economy forecast to fall by 3.75 per cent this calendar year and unemployment to peak at 8 per cent in the December quarter, Treasurer Josh Frydenberg said Australia is not immune to the pandemic and still has challenges to face.
“Once the recovery has taken hold and the unemployment rate is on a clear path back to pre-crisis levels, comfortably below 6 per cent, we will move to the second phase where there is a deliberate shift from providing temporary and targeted support to stabilising gross and net debt as a share of the economy,” Frydenberg said.
Population growth and business confidence were cited as two of the biggest drags on the economy and the construction industry by speakers at a Property Council of Australia post-budget briefing on Wednesday.
Charter Hall director, chief executive David Harrison said the nation is at the start of a strong consumption boom driven by government stimulus and improvements in employment.
“I think corporate Australia needs to get on the front foot, and not what I think has happened in many places in adopting an ‘austerity’ strategy,” Harrison said.
“The first thing you need to do is get your people back to work, the economies in our CBDs are critical to this consumption-driven rebirth.
“We’ve had this massive hit to consumption because of lockdowns throughout the country and I think as the immediate health threat dissipates we are going to see a rebound.
“This economy needs a shot-in-the-arm on confidence, and if you can get business with more confidence they’re more likely to keep people employed, they’re more likely to employ people who are out of work now. ”
Dexus executive general manager, funds Deborah Coakley said the opening up of cities is also important for retail and small-medium enterprises.
“As we see business confidence rise we will certainly see a demand for space,” Coakley said.
“We have witnessed where our markets have opened up and where our states have been able to have intrastate travel, tourism those sorts of things that people are really wanting to have experiences and wanting to be back into the cut and thrust of spending.
“Hopefully that continues as more borders open up and we actually get to have more inbound tourism. ”
Coakley said thriving universities are a vital component of world-class cities, and it is disappointing to see the influx of international students halted.
“Whether it’s to do with just the housing and accommodation side of things, they are consumers and they often bring international dollars with them, to quite a high extent,” Coakley said.
“So it’s really important to how we flourish in our cities, to the education sector and frankly from a diversity perspective.
Panellists agreed that if students were given appropriate quarantining and process issues resolved, students could be back in the country for the first semester of 2021.
Stockland chief executive Mark Steinert said given slowed population growth, more time would be required to get through building waitlists.
“With very low levels of population growth, it’s more likely that new construction growth will reduce rather than grow, particularly in apartments which have been affected by the reduction in foreign students and the reduction in skilled migration,” Steinert said.
“So to get that kind of growth there will probably need to be an extension of HomeBuilder—that’s been a really positive scheme.
“We’re still seeing high levels of inquiry from people looking for those purchases they can make that’ll qualify before 31 December.
“Unfortunately that’s created some capacity constraints around the availability of builders and that’s starting to feed into building costs—which is not what you want,” Steinert said.
“Even if you didn’t add more funding to the scheme, just give people more time to do the starts and spread it out—because taking those numbers, you really need to get through calendar year 21, and bridge into growth.”