Real Estate and The Election
It won’t be long until August 21 rolls around and all Australians will be asked to make a decision about who is to lead our country for the next three years.
From the perspective of the property industry, this upcoming election holds a number of key issues, including increasing population growth, interest rate uncertainty, housing affordability and taxes.
From my position as General Manager of CENTURY 21 Australia, regardless of who wins the election, I see very clearly an opportunity for whichever party is elected to address the worsening housing situation we are seeing in Australia.
The fact that Australians are worried about their ability to afford basic housing is no secret; even the Governor of the Reserve Bank spoke publicly a little while ago about his fears that his children would not be able to own their own homes due to the property boom in Sydney.
There are a few reasons for the housing supply shortage that we have started to see and expect to worsen, however many agree that government policy (at all levels, not just federal) seems to top the list. A recently released J.P. Morgan report, for example, suggested that the supply of new houses has clearly been restricted by government policy restraints.
Housing is a basic need, and as such, housing availability and affordability is an issue of vital importance to the Australian public. This election represents an ideal time for our leaders to step up and acknowledge that housing is a major issue by making policy decisions that aim to address the situation.
Australia is already at a deficit when it comes to the amount of houses needed – data from the period between the last quarters of 2006 and 2009 shows that the construction of new dwellings was approximately 180,000 dwellings short of demand (J.P. Morgan). It will likely take significant reform to ensure that construction commences and the deficit is reduced – as opposed to this deficit simply worsening into the future.
But we are still at a stage where large-scale land release strategies and incentives to increase housing construction can have a significant impact to improve the national supply shortage. This is good news – the only barrier of course being the uncertainty of electing a Government who will enact the necessary reforms.
In my mind, it could be very disappointing from a real estate perspective to see little change result from this election. The issue of Australia’s housing shortage isn’t one that can simply disappear.