After a package of "red tape-busting" housing reforms designed to tackle housing affordability was released for consultation yesterday by the NSW Government - with proposed changes including standardising the format of council’s development control plans, giving developers incentives to resolve objections before lodging DAs, and focusing councillor attention on strategic planning with greater numbers of DA assessments being processed by staff or local planning panels - industry experts have begun to weigh in, stating the reforms are not enough.
Laing+Simmons Managing Director and REINSW President-elect Leanne Pilkington reiterates the answer to improving supply – and therefore affordability – is much simpler: start with stamp duty.
According to State Government plans, local communities will have greater opportunity to participate in strategic planning for their neighbourhoods as early as practicable, with each planning authority required to prepare community participation plans. Other proposed changes include "levelling the playing field" for the assessment of major projects by ending transitional arrangements under Labor’s controversial Part 3A development assessment which will prevent the misuse of modifications.
The Hon. Rob Stokes MP, Minister for Planning said the state was experiencing the longest housing construction boom in NSW history with the latest figures for the 12 months to October showing 74,577 approvals, the second highest on record.
The Hon. Robert Stokes MP“However, there is still more work to do and these planning reforms build on our impressive results over the past five years by making it easier to build new homes,” Mr Stokes said.
But Ms Pilkington said if Government is serious about tackling the housing shortage to improve affordability then stamp duty is the most obvious place to start.
“While the industry would welcome measures that improve the planning system, through more efficient approvals and better consultation with communities, until the NSW Government addresses the key barrier to affordability then it can’t justifiably claim to be supporting first home buyers,” Ms Pilkington said.
“The fact is that the huge cost of stamp duty in New South Wales is the biggest barrier to the purchase of real estate. It stifles transaction activity, puts increased pressure on prices and encourages people not to move, fuelling the supply shortage.
“For many people, stamp duty makes it impossible for them to afford to move. But the impacts of this tax – for which consumers receive no service in return – run much deeper down the supply chain. If people are discouraged or even prevented from moving, businesses like those making and selling household goods, homewares, furnishings, white goods and even tradies miss out.
“Then there’s the industry impacts. Fewer transactions mean fewer employment opportunities in real estate and associated industries.
“Getting rid of stamp duty would see an influx of properties come to market, placing downward pressure on prices and vastly improving affordability, all while unlocking flow-on economic benefits,” she said.
Ms Pilkington said the need for stamp duty reform in NSW has never been more urgent. And there’s a clear precedent for the new economic opportunities such reform could generate.
When the Northern Territory and West Australian Governments reduced stamp duty, state revenues increased as a direct result - because transaction volumes increased.
The abolition of stamp duty in NSW would see a similar influx of properties come to market, she says.
“The NSW Government has previously ruled out stamp duty reform, presumably on the basis that it depends too heavily on the revenue from this tax, while ignoring the benefits other states and territories have derived through reform in this area,” Ms Pilkington says.
“It’s now coming home to roost. The Government is expecting reduced surpluses in years to come. Action on stamp duty has the potential to reverse the trend, open up new supply and improve affordability.
“The time has come for the NSW Government to get serious about helping people, including first home buyers, as well as itself,” Ms Pilkington says.
