THE MORRISON GOVERNMENT HAS UNVEILED ITS $688M HOMEBUILDER PACKAGE: NICKI HUTLEY IN AN INTERVIEW WITH RACHEL PUPAZZONI: THE BUSINESS
THIS week the Government’s Homebuilder Package was unveiled to keep the construction industry hammering along …
-the sector supports more than 1 million jobs; facing a 40% fall in work after current contracts are completed
-owner occupiers can apply for $25,000 towards building or renovating their homes
-but they have to spend $150,000 to get the grant
-new builds are capped $750,000
-renovations can be made if the home is worth less than $1.5 million
-eligible builders will have to already be registered which has a tight 6 month timeframe
CONCERN the scheme does not go far enough:
Nicki Hutley made these points:
– the higher end of income earners; people in the top 90% most likely to be able to afford this package; they will have to spend $250,000 or $125,00 of their own money
-those able to do the renovations; obviously a lot more if you are going to build a house
-if you have a total package of $700,000 max. income of $200,000; it is unclear if you have enough money or whether the value of the home build in big cities where people have higher incomes will meet the criteria
Rachel: The government is forecasting it will receive about 27,000 applications
If this package is targeted towards people on higher incomes yet we are in a recession
-Nicki in response said that many will be nervous about their job; where the economy is going; people will put renovations off; some may view it is nice I will get an early Christmas present from the government of $25,000
–but the size and scope of that spend is not a sensible decision for most to make
-it will tweek some people over the fence; but the government is not likely to get the 30,000 number they are thinking
Rachel raised the issue that there is quite a bit of criticism because there is nothing for public or social housing
Nicki in response:
–in my opinion the government has totally missed the mark; think about the chronic issue of housing affordability, and affordable housing, social housing, the need for refuges for domestic and family violence
–a one in a century opportunity to use stimulus to do excellent social good; not to take taxpayers money to be put in the hands of middle income or wealthier families but to stimulate the economy to benefit more people and not just the few those least likely to need that support
–providing lower cost housing for most people; community housing model needs government support by granting land
-giving additional grants like the Rudd Government; it did stimulate some spending
–we can support that sector to provide more housing for more people who cannot access any sort of housing
–the levels of homelessness are rising particularly older women; this is the sector we need to support the most
-in normal circumstances this would add to house prices as we have seen with first home owners grant in the past
-because the market is so soft; difficult to say whether it will get passed through and see a rush of people
-clearly a rush on the sector in the next six months will push up prices unnecessarily
-it would be unusual if we did not see some upward pressure
-it is going to have to be managed very carefully; builders will have to be licenced; a good thing
–obviously will have some adverse effects
AT CAAN we are seeing and reading of more Economists seeing the poor policies of this Government for what they are … noticeably now since 2017.
HAS the ‘penny dropped’ that with high immigration, visa manipulation and money laundering that a whole Cohort of Australians are being replaced by this ‘Silent Invasion’? Not only in the housing market but the jobs market too!
HAS the real estate tourism forced out … the Economists extended families, friends, neighbours … to live as much as 60, 80 Km from their workplaces … and some have lost their jobs … even become homeless!
There has been much media for some time targeting Baby Boomers for the increased house prices. Has the media been forced to overlook this Silent Invasion of the Visa Real Estate Tours; the vast range of Visas encouraging foreign acquisition of Australia’s residential property; the FIRB ruling allowing developers to sell 100% of ‘new homes’ to foreign buyers? … and …
-the exemption for the Real Estate Gatekeepers from the second tranche of the Anti-Money Laundering Laws by the Morrison Government in October 2018! This tranche had been shelved for some 12 years prior!
Back in May 2017 Nicki Hutley was on the panel of a Forum run by the Fifth Estate on Housing Affordability where CAAN raised the issue of foreign buyers; that it had been reported that only 11 per cent of new homes were bought by foreign buyers; but that the real percentage was concealed by the role of the onshore Daigou; and that the FIRB ruling of 2008 implemented in 2009 allowed developers to sell 100% of ‘new homes’ to foreign buyers. This was Nicki’s response:
Nicki Hutley: We mapped this a while ago and it has obviously increased significantly in the last couple of years. But it is not the whole story. It’s an element of it. All of these things, I think with housing affordability, one of the things I was looking forward tonight was not getting bogged down in one thing like negative gearing but actually looking at the bigger picture.
All the drivers of demand, all the drivers of supply, and looking at it in a holistic way because there is not one silver bullet. It’s not going to be solved overnight and lots of different pieces of the puzzle need to be moved together. Yes, there has been a significant increase in foreign investment in the past couple of years. Yes there are people getting around guidelines, although those guidelines have been tightened up since the FIRB was under review.
Yes, there will always be people who get around the system but they are a relatively small proportion of the population. And the only thing we can say about that, is that if there’s development going on that is precluding other development going on …
If new development is being funded by Chinese and occupied by Chinese, it is not affecting the net impact on Australia. It’s only if that is stopping additional supply coming onto the market – though given that the construction industry is at capacity then there is good reason to suggest that that is in fact the case.
“It’s not going to be solved overnight and lots of different pieces of the puzzle need to be moved together.” – Nicki Hutley
VIEW THE INTERVIEW WITH NICKI HUTLEY: