Australia's peak body for the property sector says the budget will have a highly ambivalent impact on industry and the market.
The Property Council of Australia has provided a mixed assessment of the 2014 Federal Budget, praising the impact of planned infrastructure investment on the real estate industry, while expressing disappointment at the scrapping of the National Rental Affordability Scheme and the lack of a nation-wide housing plan.
Property Council Chief Executive Peter Verwer has hailed the Coalition’s 2014 Federal Budget as one which “invests in Australia’s future and unlocks productivity boosting opportunities for the business community.”
Verwer singled out the Coalition’s bumper infrastructure ambitions in particular for praise, and the impact this spending will be have on Australia’s urban centres.
“The $50 billion infrastructure investment pipeline will provide a significant boost to competitiveness in Australia’s cities and regions,” said Verwer. “Critical infrastructure projects will help unleash the productivity potential of Australia’s cities – the powerhouses of the economy.”
Verwer expressed his qualms, however, about the Coalition’s decision to terminate the National Rental Affordability Scheme, and its implications for Australia’s housing market. The discontinuation of the fifth round of the NRAS is set to result in the withdrawal of $235.2 million from the program over three years.
“The scrapping of the National Rental Affordability Scheme (NRAS) is concerning if it marks the end of the Federal Government’s involvement in housing supply,” said Verwer. “We urge the Federal Government not to forget the importance of housing in underpinning productivity and liveability.”
Verwer further called for the Federal Government to articulate a more detailed housing strategy for the whole country.
“A clear plan for housing is needed – one that tackles the affordability and supply challenge faced by Australians. Housing is an issue for all Governments, not just the states.”
Nick Proud, Executive Director of the Residential Development Council, echoed Verwer’s remarks, expressing his disappointment with the termination of the NRAS, but also pointing to the possibility of its replacement with other alternatives.
“The scrapping of the National Rental Affordability Scheme…leaves the door open to the Government to focus on new levers to improve housing supply and affordability,” said Proud. “This could include levers such as a Commonwealth Land Audit flagged in the Government’s own Commission of Audit.”
According to Proud housing supply may still be increased despite the cancellation of NRAS, as other measures and reforms pick up the slack for its absence.
“Combined with other reforms including red-tape reduction and environmental one-stop shops the Federal Government can make significant improvements to housing supply,” said Proud.