Australia High house prices ‘a risk for all state governments': Housing Minister wants premiers' feet held to the fire
Major bank slashes in HALF its property price growth forecast for 2022
Westpac is now expecting Sydney and Melbourne property prices to grow by just 5 per cent in 2022 before prices slide in 2023. Tougher rules on investor loans are tipped to cool overheating market.As recently as February, Westpac predicted prices in Australian capital cities would surge by 10 per cent in 2021 followed by a 10 per cent increase next year.
The federal government says the states and territories must take responsibility for Australia's housing affordability crisis, saying it is local levies imposed on new developments that are hurting first homebuyers.
In a salvo that caused the NSW government to fire back, federal Housing Minister Michael Sukkar said the states need their "feet held to the fire" to address rising house prices and it was not up to the Commonwealth to fix the problem.
He warned that every additional burden placed onto developers by the states is passed onto consumers and exacerbates the affordability challenge.
Housing crisis in Katherine forces renters to wait months for a home
Chelsea Coutts moved from a big city last year to escape COVID-19 lockdowns, returning to her hometown in the NT outback. But settling is proving harder than she thought.Ms Coutts told the ABC it took her five months to find a home to rent in the Northern Territory town, 320 kilometres south-east of Darwin
The rebuke of the states prompted NSW Planning Minister Rob Stokes to blame interest rates and federal tax rules for pushing up prices, opening a new front in the debate over how to make housing more affordable for young Australians.
Sydney and Melbourne, raising concerns among economists and MPs about housing affordability.
reached a record $1.3 million in March after the fastest increase on Domain records, while increased to $974,000.
Residential developers in outer suburban and regional growth areas must pay levies for infrastructure such as roads, parks and local services to the state government, as well as developer contributions collected by councils but are overseen by state planning policies.
Fears Australia's housing crisis will worsen as affordable rental scheme winds down
For years, they've been paying lower rents thanks to a federal housing scheme. But as that winds up, there are fears that some low-income tenants will struggle to find somewhere to live as rents rise nationwide.The federally-funded National Rental Affordability Scheme (NRAS) gives incentives to housing providers, which then rent properties out for at least 20 per cent below market rates.
In new housing developments in western Sydney, contributions can amount to more than $80,000.
"What we need to do is draw [the] nexus a bit closer to, I think, hold state and territory governments' feet to the fire a little more," Mr Sukkar said at an Urban Development Institute of Australia conference in response to a question about whether the federal government had any levers available to collaborate with the states and territories to reduce the impost on first home buyers.
Mr Sukkar told the conference on Thursday he would never say the Commonwealth "could ride in on its white horse and fix it or convince state governments of the merits of reform or fund the reform" and that GST was the main federal contribution.
"The much bigger issue we have here is the affordability challenges in our major cities, which is a real and present risk for all state governments," he said.
House prices surge by $100,000 in just three months to new record high
Sydney house prices surged by 8.5 per cent or by more than $100,000 in just three months. Canberra and Hobart had even bigger increases. But in some cities, apartment values are falling.Across Australia's capital cities, house prices are surging at a double digit annual pace as apartment values fall in the same markets with interest rates at record lows.
The federal minister's comments prompted Mr Stokes to raise the Commonwealth taxes applied to players in the burgeoning build-to-rent sector as a thorn in the side of its viability.
Build-to-rent refers to residential developments leased out by developers typically for the benefit of long-term renters and are presented as an alternative to home ownership.
"Let's tear down the myth that supply is the determinant of housing affordability. Planning plays an important and significant role in getting new housing to market but let's not pretend tax rules and interest rates don't also push up prices," Mr Stokes said.
"The emerging build-to-rent sector is a prime example. While our recently announced policy to introduce build-to-rent development in our market has been welcomed, industry tells us that the Commonwealth tax treatment makes projects unfeasible."
Mr Stokes said he wrote to Mr Sukkar on this issue, and he failed to respond.
He said NSW was fast-tracking projects through planning reforms and adopting recommendations from the Productivity Commissioner to enable more certainty and transparency surrounding infrastructure contributions.
Karen Boes Got Life for Her Daughter’s Fiery Death. But Was the Conviction Based on Junk Science?
Karen Sue Boes has been insisting she did not kill her 14-year-old daughter Robin since the day her Zeeland, Michigan, house caught on fire almost two decades ago. As police interrogated her multiple times over six weeks, the 65-year-old maintained she was out shopping with a friend when the tragic fire broke out, killing Robin. But during one grueling questioning on Aug. 7, 2002, police eventually got her to admit she possibly started the fire while in a “dream” or “unconscious” state. “They had me really disoriented,” Boes told The Daily Beast in a phone interview from the Women’s Huron Valley Correctional Facility on Thursday.
Mr Sukkar used the federal government's decision to waive Tasmania's historic $158 million housing debt in late 2019 as an example of intervention, saying it was on the basis the state undertake planning reform. Last year, Reserve Bank of Australia research found planning and zoning restrictions addin some states.
"So we will use those opportunities where we can but I would certainly not want to create the impression that we are able to step in and usurp those responsibilities for the states. We just don't have the power to, and it lets them off the hook a bit too, so we just need to focus where the decision-making lies," he said.
After promoting the success of the HomeBuilder grant scheme, which provided up to $25,000 for new home builders and mainly benefited detached dwellings, Mr Sukkar said the federal government would have to respond to the apartment market.
"It is such an integral part of the housing strategy now, we are keeping a very close eye on it as it's very exposed to factors of international students and migration," he said.
UDIA NSW CEO Steve Mann said there was an opportunity for the NSW government to work with local councils to unlock funding from unused developer contributions, "to fund the gap and get a double dividend from critical infrastructure projects which then unlock housing and jobs.
Sydney and Melbourne property prices slow after record-breaking boom
Sydney and Melbourne house prices increased by tens of thousands of dollars last month but there are now signs the record-breaking national property boom has peaked.Buying a house in Sydney and Melbourne is now tens of thousands of dollars more expensive than it was just a month ago but there are signs the strongest property boom in decades is slowing.
"The federal government needs to get better at putting conditions on the infrastructure investment it puts into states so that urban planning, transport and other infrastructure is delivered in a timely and integrated way, delivering the world class housing we need for our cities to thrive," he said.
Property Council of Australia's NSW executive director Jane Fitzgerald said that with housing affordability firmly back in the spotlight, there needed to be faster, more streamlined approvals for homes Sydney "desperately needs".
"With low interest rates and strong recovery it's more important than ever that we've got a planning system that ensures supply can meet demand," she said.
Rising house prices in major cities such as Sydney and Melbourne have prompted Coalition MPs to propose using superannuation funds to help first-home buyers save up for a deposit. Liberal MP Tim Wilson launched a campaign last year pushing for an inquiry into housing affordability and the ability for first-timers to be able to pull money out of their mandatory super savings for a property.
When asked about the appetite for such a scheme the federal government has previously referred to an existing program allowing first-home buyers to make extra savings within their superannuation, which can later be withdrawn for a deposit.
Independent MP Craig Kelly, who left the Liberal Party in February, said he might now be prepared to take up the mantle. "I might introduce a private members bill," Mr Kelly said, adding he was "disappointed" the Liberal Party had not progressed with the idea.
"One thing lost in this super debate is the money has to come from somewhere. Every dollar of super has to be earned by the employer or the employee. It takes a dollar out of current expenditure and away from young people struggling to get into the housing market," he said.
"If you retire and don't own your own home you will struggle financially. You can have the super money when you're 65, 66 or 67 but you can't get it when you need it," he said. "It seems to be back-to-front.
"Housing is very important and home ownership is a building block of society."
Monetary policy is not the right 'tool' to address runaway house prices, Reserve Bank says .
The RBA says the rebound in economic activity has been remarkable, but wages growth is a long way off.But monetary policy is not the appropriate tool to address the problem, because it is designed to encourage employment and inflation, it said.