180,000 new homes and it is still not enough

Article provided by Big Property


I read a lot when I’m researching the viability of any project I’m contemplating becoming involved in and while I may not always remember where I read it, I always recall the message of any article I consider relevant.

The other day I came across exactly such an article which was quoting a report put out by the Residential Development Council. It was the council’s Outlook report, its glimpse into the future, and in it the council warned that despite work about to start on 180,000 new homes the country was a long, long way from meeting the demand for new housing.

It’s solution to this crisis was to remove the twin barriers of overly bureaucratic planning approval processes and stamp duty. It further urged the Government to avoid hog-tying the industry in even more red tape, citing the Foreign Investment Review Board rules as an example of an impending tsunami of red tape.

Right now, for those of you who weren’t aware, a Federal parliamentary committee is considering the impact of foreign money on local property prices, demand and volumes.

The RDC is calling for the removal of policy roadblocks such as planning system delays and stamp duty costs, which it hopes will offset changes to negative predictions for the industry and improve affordable building.

The negatives are low wages growth, rising unemployment, few first-home buyers and falling affordability for owner-occupiers and investors. The negative indicators affects the number of people lining up to buy property but, as far as BIG is concerned, what might be a negative for the industry is a real positive for those who are already in it and eager to expand their involvement.

At buying time, what you want is less competition and with fewer owner-occupiers entering the market it means there are more renters out there increasing demand for rental properties.

Record low interest rates are a real incentive for those who are not affected by rising unemployment or who can afford to ignore the slower economic conditions or are not affected by them.

It is important to remember that when it comes to property investing there is no such thing as “good” or “bad” times, there is simply time. And if all your ducks are in a row, then “now” is always the best time to either enter the property market or expand your activity if you are already part of the investment community.

It really is an ideal time to think BIG when contemplating your next move in property investment because while others are dithering over high unemployment versus historically low interest rates, what I urge my clients to remember is that we’re not building houses for the unemployed, but for working Australians and despite the projected construction of 180,000 new homes in the next 12 to 18 months, we are still going to come up short when confronted by the demand for new housing.

And isn’t that exactly what property investors want – a shortage of new properties and a glut of renters?

Strategies can be fine tuned and adjusted to meet any economic conditions but what will never change is that unless you invest in property you’re never going to be able to play the game.

Paul Bieg
Director - BIG Property Investments

Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.

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  • Peace says on 17/12/2014 09:53:23 AM

    Have to be careful when removing red tape when it comes to planning approvals. They are in place for a reason, not simply to remove them for the benefit of the developer.

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