UDIA Cautions Against Federal Political Uncertainty

A new State of the Land report by The Urban Development Institute of Australia (UDIA), has for the first time in its eight-year history, found that uncertainty at the federal level is at greater risk of hurting the property development industry, than state level policies.

The 2016 State of the Land report by Australia’s leading property development industry body, was launched at the UDIA National Congress in Adelaide.

UDIA National President Michael Corcoran said federal level uncertainty is likely to weigh against the market performance in 2016, and contrast to the peak conditions experienced in 2015.

“Changes made to the macro-prudential regulations and foreign investment rules, and speculation over tax changes like the GST, negative gearing and capital gains tax, and talk of imposing “value capture” have the potential to cause perverse effects in 2016 along the eastern seaboard, and highlights just how susceptible the property market is to uncertainty in the policy environment," he said.

“At the state level, improvements have been made in recent years to allow the market to better respond to conditions. But delays and uncertainty in the rezoning, planning and approvals processes mean volatility remains in-built in the industry, as it remains difficult to respond quickly to changes in demand, while up-front charges and levies remain too high."The 2016 UDIA State of the Land report was undertaken in partnership with Charter Keck Cramer and Research4, utilising data from the National Land Survey Program (NLSP).

• Retain the current negative gearing and capital gains regimes.

• Broaden the base but not increase the rate of the GST.

• Assist state governments with removing stamp duty on property and replacing it with more efficient forms of taxation.

• Not pursue “value capture” policies that increase the price of new housing.

• Take an active role in the development of cities.

• Provide additional funding for investment in new urban infrastructure, in order to unlock land.

• Continue to encourage foreign investment into residential real estate, by supporting Australia’s existing foreign investment policy framework.

• Remedy the unintended effects of Basel III on housing affordability.

• Promote innovation in cities and regional areas.

• Undertake major planning system reform, to increase the supply of urban land and reduce delays and uncertainty associated with zoning, planning and approvals processes.

• Reduce up front charges and levies on new housing by favouring the recovery of costs over long time frames, rather than up front.