50k for new Builds

Discussion in 'Property Market Economics' started by albanga, 20th May, 2020.

Join Australia's most dynamic and respected property investment community
  1. albanga

    albanga Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,700
    Location:
    Melbourne
    Everyone probably reading about the property councils lobbying for 50k to buyers of new homes.

    What’s people’s take on this and how it may effect property prices.

    I think it will give outter rim estate areas a nice little boost but can’t see it doing much for blue chip areas.
     
  2. TMNT

    TMNT Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    5,574
    Location:
    Melbourne
    It's an artificial boost like the fhog where it will just adjust the market price for new builds, thus affecting existing stock as well

    Might save/lessen the impact on the construction industry though
     
    luckyone, HUGH72, standtall and 4 others like this.
  3. Westie

    Westie Well-Known Member

    Joined:
    19th Jun, 2017
    Posts:
    1,027
    Location:
    Melbourne
    Wonder whether this'll be for OO homes only or investment stock too. I reckon it's part of the wider "Welcome to Australia" campaign.
     
    gerege likes this.
  4. gerege

    gerege Well-Known Member

    Joined:
    23rd Mar, 2018
    Posts:
    93
    Location:
    Qld
  5. Maximus

    Maximus Well-Known Member

    Joined:
    4th Aug, 2019
    Posts:
    83
    Location:
    Sydney
    If this goes ahead i will bring up my plans to purchase by at least a year, it will definately put demand back into the construction industry.
    I will even purchase land further out of Sydney within my budget to build, hold and sell after im eligible for CGT exemption.
     
    gerege likes this.
  6. wilso8948

    wilso8948 Well-Known Member

    Joined:
    23rd Jan, 2018
    Posts:
    420
    Location:
    NSW/QLD
    +1 my thoughts too.
     
  7. Biggbird

    Biggbird Well-Known Member

    Joined:
    4th Feb, 2020
    Posts:
    134
    Location:
    Hobart
    Or maybe we should take this opportunity to shift our economy away from reliance on the property industry and overseas migration to enable us to better cope with similar issues in the future.
     
    Kat, There, marty998 and 7 others like this.
  8. Biggbird

    Biggbird Well-Known Member

    Joined:
    4th Feb, 2020
    Posts:
    134
    Location:
    Hobart
    If they do introduce this in some way shape or form, I hope there are some increased sustainability conditions attached to the new builds. Increased NatHERS requirements? Must have solar? I don't know, but some sort of effort would be great. It would also be nice if they focused on urban consolidation rather than sprawl.
     
    KateSydney and wilso8948 like this.
  9. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,429
    Location:
    Sydney (Australia Wide)
    Construction will be targeted, big time. So too will a few other sectors (energy). We're in an environment of larger then normal government sectors on the overall economy - which means that more 'winners & losers' will be discretionarily picked by governments. I expect stimulus to levels we've never seen before for certain sectors in coming months.

    Construction is a no-brainer for economic stimulus from governments in times like this - it generally always is in large recessions (depends on the reason/cause). Its a sector that:
    - has a large jobs multiplier
    - is a very large employer
    - will have a massive blow associated with an 85% reduction in migration (temporary)
    - can have its impacts smoothed out over longer periods by using government balance sheets
    - provides a social benefit.
    - It is fast and can have its economic impacts within months (Resi-housing)

    No brainer to stimulate this.

    They'll do it in most states, and the feds may even get involved.

    I'm not sure the design will mean direct buyer subsidies or whether resi-housing in particular will be subsidised. It may be more appropriate to target supply in cases like these...but they are all really targeted at getting the industry building and saving jobs.
     
    HUGH72, C-mac, Bender12 and 1 other person like this.
  10. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    6,010
    Location:
    Australia
    You think you will make a profit after a few months?
     
  11. AndyPandy

    AndyPandy Well-Known Member

    Joined:
    23rd Feb, 2017
    Posts:
    291
    Location:
    Sydney
    "The council wants a "Welcome to Australia" migration plan that would include a major advertising campaign to promote the country as a safe and healthy destination. It argues the current points system for skilled migration should be temporarily lowered and people encouraged to live in major capitals as well as regional centres."

    These people have lost their marbles. How is bringing "lower" skilled people to Australia's big cities going to help when unemployment is shooting high and infrastructure is stretched to the max? I wish they would think longterm for once.
     
  12. Jezzah

    Jezzah Well-Known Member

    Joined:
    11th Apr, 2019
    Posts:
    215
    Location:
    Melb
    If they pump housing construction that will exacerbate our oversupply while the borders are shut. So much of that industry is reliant on selling to people who are moving here or live elsewhere.

    Given the cost our economy is paying right now for allowing the importation of this virus they would have to think really hard about the timing and terms of re-opening our borders. A second wave and lockdown will smash confidence and wreck what is left of the economy.
     
    Lions4Eva likes this.
  13. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    1,723
    Location:
    Adelaide
    https://www.smh.com.au/politics/fed...operty-concerns-20200519-p54ue5.html#comments

    Public opinion is strongly against this judging from the comments!

    "If these kind of policies are proposed I would hope that our young people take to the streets in protest!

    Our economy has been driven by this ponzi immigration property scam that has made property unaffordable and resulted in congested roads, schools and hospitals. Our living standards and per capita GDP have gone backwards.

    I sense many, many people are angry about the immigration levels in our country. It’s way overdue time to take a well deserved breather before our cities become unliveable".

    "The Property Council suggests these policies in order to drive an economic recovery, however have they considered that they may be part of the problem? Inflated property prices distort our economy with the result that consumers have less money to spend in other areas of the economy. Everyone agrees that kickstarting the economy requires putting more money in more pockets, in a time of stagnant wage growth, what better way to do that than allow the price of property to drop significantly?"

    "QUOTE: "The council also wants the abolition of stamp duty, the broadening of the GST and a "welcome migration" campaign aimed at luring foreigners to Australia.”

    NO, NO and NO. Can we please get the country in order before continuing down the path of least resistance. We have diminishing capacity to employ our current workforce in jobs that will prepare the country and its' inhabitants for the 21st century. Has our current predicament taught us nothing!"

    "Low interest rates and falling house prices. An extended period of pain for the property industry. This could actually lead to horror of horrors; Affordable housing.
    The Property Council want to supercharge immigration again. Of course they do. The whole industry is based on filling the country with ever more people to sell them real estate. They aren't the ones who have to pay for the infrastructure, the congestion, the pressure on the environment. The high household debt. For them high house prices means higher profits.
    Not only that they want the government to do their bidding and pay people to build homes and push up immigration".

    "What a sick joke. Another handout to the already well heeled while public housing lists get longer and longer. It's offensive. What the property council don't understand is that secure housing promotes social cohesion. Handouts to investors have the precise opposite effect".

    "Yes, great idea! Lets get the government (us) to subside the housing industry so we can keep house prices high and ensure tradies can continue charging exorbitantly high rates".

    "Good times : Stay out of our industry!
    No government intervention, regulation or reform! EVER!
    Bad times : Please get involved with your taxpayer dollar incentives and keep the ponzi scheme going by pumping the system with anybody available".

    "The only solution ever proposed by the property council is more grants, knowing full well all it does it inflate prices. They are a 1 trick pony without a clue".

    "Really ? Remember what happened when the First Home Owners Grant was introduced. House prices went up by more than the grant overnight. No help to first home owners at all. It should have been called the home sellers grant".
     
    luckyone, marty998, Foxdan and 6 others like this.
  14. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,429
    Location:
    Sydney (Australia Wide)
    Great point @Jezzah - theres policy measures to handle oversupply issues and smooth it over time too. It won't be first best policy approach, but if they are concerned by this, they could intervene more directly to get construction going while handling over-supply issues temporarily. E.g. they can use their balance sheet to fund/purchase, and sellback to market once migration recovers (which they control the taps too).

    I also suspect that we'll need to do what the Abbot government did over time too. Tell the public we have a debt and deficit emergency once this is done & dusted, and fund it with sly population growth increases that barely get much attention but impact structural budgetary figures significantly. Much easier than cutting back spending or increasing taxes, which the electorate doesnt really like and gets a lot more attention.
     
    Jezzah and wilso8948 like this.
  15. GoldCoastBound

    GoldCoastBound Well-Known Member

    Joined:
    1st Sep, 2015
    Posts:
    128
    Location:
    East Coast
    is this only an idea or its actually happening?....my sons building a house and the building permit was just approved today...

    thanks
     
  16. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,138
    Location:
    Sydney
    $50k to home builders proposed as RBA raises property concerns

    the word "proposed" should be noted.
     
  17. inertia

    inertia Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,107
    Location:
    Newcastle, NSW
    I think I would prefer to see the move from stamp duty to increased rates accelerated. That would assist anyone looking to downsize or liquidate to free up cash.

    Although that wouldn't do anything to help the building industry I guess
     
    AlphabetSoup likes this.
  18. Maximus

    Maximus Well-Known Member

    Joined:
    4th Aug, 2019
    Posts:
    83
    Location:
    Sydney
    If the market is doing good maybe.
    Being a licensed builder while having access to company machinery and trucks has its perks.
    The way i see it is, its better than having money sitting in the bank.
    Definately dont see how prices can rise in the near future though.
     
  19. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    6,010
    Location:
    Australia
    And not even proposed by the government.
     
    spludgey, Maximus and larrylarry like this.
  20. db9

    db9 Well-Known Member

    Joined:
    25th Jun, 2016
    Posts:
    184
    Location:
    SEQ
    What type of impact would this rebate have on established house prices?
     
    DrunkSailor likes this.