- A message from our Global Head of Real Estate and Construction
The lead-up to the federal budget has put the issue of housing affordability squarely in the spotlight and it seems we also have a commitment from a number of our State Governments on addressing the problem.
We’ve seen the usual pre-budget debate play out regarding investors that enjoy negative gearing and capital gains tax concessions from investing in property – which is no different to the concessions available for all other asset classes.
It’s an inevitable conversation with these being the main tax levers that Government has to pull to impact housing at a federal level. Thankfully we have had assurances in advance from the Federal Treasurer Scott Morrison, that the Coalition is not looking to make changes to negative gearing…in this budget. Investors are still wary about any announcements around housing affordability that the budget may contain.
If we are going to make a real impact on housing affordability, there has to be a concerted effort from each level of Government. The States directly impact both the supply and demand side through their ability to control land releases and provide the infrastructure required for new development areas.
While the go-to fix of first home owner grants are a welcome leg up, they only provide those entering the market with additional funds to compete for limited stock, ultimately driving prices up. These sort of incentives, including stamp duty concessions can only be effective if actions that address the supply side are initiated first. The question that remains is once the various initiatives are implemented, how do we truly measure if we have achieved our objective?