50k for new Builds

The Property Council is just a lobby group isn’t it? According to its website:

‘The Property Council of Australia is the leading advocate for Australia’s biggest industry and biggest employer – property.

Our industry represents 13% of Australia's GDP, employs 1.4 million Australians (more than mining and manufacturing combined) and secures the future of 14.8 million Australians who have a financial stake in property through their super funds.’

 

Notice they are advocates for developers and builders, and not investors. So the goal is building activity, not property prices.

 

Is there any indication as to when will this be available? I don’t want to buy now and miss out on the opportunity ( though I know it’s wrong but nothing I can do about it)

 

It is just some self interested group who has little political power spouting off about what they want... it is not even a vague idea from some minor politician who doesn't even have the power to get it in... don't change your plans because of such rubbish... don't know why they get news coverage can I get a news article written whenever I want something

 

My land titles in September this year so fingers, toes and but cheeks are all crossed for this to go through

 

If this goes ahead, is there an indication that this applies to building a house for someone who already has a block of land? Thanks.

 

i would guess so, i know i would definitely consider rebuilding instead of renovating if there was a 50k grant. that is ofcourse if builders dont just increase current prices by 50k !

 

I’m not saying your wrong but I am near certain you can expect some strong federal support to the residential housing market with a very big focus on new builds.

 

Ok here's my view...

We should promote/try to save the construction industry BUT not via the construction of more residential property of any kind! Promote commercial and public development construction instead (e.g. infrastructure- for instance the upgraded Sydney stadium rebuild is on pause right now. It should be going full steam ahead to create the jobs there!).

Here's why...

We are simply nuts to build more residential supply anywhere in the entire country right now.

Immigration is non existent so no new supply there. Unemployment will likely touch double digits in a few months so any politician fool who thinks they can turn the tap back on for immigration is writing their own political death sentence! Tourism is dead so air bnb'd properties converting back to traditional rentals.

Let's pause and consider these 3 factors a it more:

1) foreign students/workers gone back to home country = excess resi supply
2) unemployed residents/citizens forced to move back in with mum and dad (or even, as several friends have done; end their lease where they live alone, and move into a share house at a cheaper room-rate) = excess resi supply
3) air bnb'd properties flooding onto the regular rental market at once (case study check out the hobart rental bloodbath unfolding) = more excess resi supply

I went for a jog last night (currently live in inner west sydney) and there are 'for lease' signs EVERYWHERE. One poor old red brick 2 story walk up (only 6 letterboxes on the front... 6 units) had not one but THREE for lease signs up. One Sydney suburb I currently hold in, has seen asking rents for a 2/1/1 unit wither from 400-410pw, down to 320-340pw in just two months.

We are foolish to promote and encourage more residential build/supply, just to get the short term sugar hit of creating 12-24 month jobs for construction industry. Already there will be excess supply for a VERY long time in most parts. Hell, pre fires and covid, some areas of Aus were already massively oversupplied! The sugar hit will languish and even if we start importing people from overseas again, we will not put all the bums on the many seats. Its like an opposite version of musical chairs. Instread of taking one awat each round, we are adding a chair each round but not adding players!

This is not the answer. Short term sugar hit will crush the (how many million??) Resi Proeprty investors due to high vacancy and abysmal rental income compared to holding cost (resulting in foreclosurers bankruptcy abd repossessions and yes even MORE empty properties) and we will have an even bigger problem to deal with.

Where is the Fed and states right now in promoting other jobs growth industries and giving them subsidies?? How about getting agriculture, public infrastructure construction, and domestic tourism going properly? Also renewable energy! Give the free kicks there and let our local businesses flourish. And... dare I say it, a word we haven't heard in a long time: get local manufacturing bolstered again!

 

Reckon Scotty from marketing gave a quick call to the property council?

"Hey guys mind floating a $50k new home bonus for us? Wouldn't mind seeing the facebook comments to get a feel! Cheers"

It wouldn't be the first time such news has been manipulated. Maybe @Redom may know?

 

I don't think Scott from marketing cares too much for support for 'proposal' ideas at this stage. Its also a relatively simple one, no way giving homebuyers 50k to buy property isn't a popular policy on mass too. His pragmatic enough to know this.

This is just one lobby group putting out their vested ideas knowing full well that budget preparation is beginning around now and this will be the most interesting budget in years (spend spend spend!). Lots of lobby groups are doing the same, its an interesting time to do it. ACOSS will be all over social welfare now trying to keep JobSeeker forever. Greens will launch renewable energies campaigns etc. Some of this is what makes our democratic system great - so many voices contributing to meaningful debate. But the vast majority of ideas have no legs.

In general, PM's offices may make calls like that to get things through parliament and influence media, but doubt it's worth floating lobby groups for random ideas.

As an aside, reading Coorey's work - its clear him and the PM's office are very close...always knows what's going on first and all the other journo's are a step behind. This isn't uncommon - those with in's at PM's offices get intel earlier. Around budget time, treasurer's office 'leaks' info out all the time so as to spread the flow of information before announcement dates. Laura Tingle was in the know when she was in Cbr in my day, Coorey is the go to guy at the moment.

For those punters reading into the Stockmarket - read his work and you'll go well. Before the 130bn and 7% rise day, Coorey pretty much leaked the governments thinking. Before the REITS went up ~20% a month or so ago, also commented on implementation of the code that drove the recovery in prices.

Some journo's without a clear understanding of how the policy game works go down the FOI route and try and get intelligence that way. ABC loves this! Dont think that's a good approach - Treasury look at everything. I wrote papers on all sorts of tax policies in my stint there (removing negative gearing included!)...I knew full well that 90% would collect dust and it was done more as a 'intelligence building' exercise than any meaningful policy prescription governments want to exercise. This type of stuff often gets reported in media, but isn't a reflection of government thinking.

The above are some of the machinations of policymaking at central agencies & political offices (most key federal political offices have staff from central agencies there/leading it). This is the 'Canberra bubble' that ScoMo refers to at work.

 

@Redom Hope you write a book one day. I'll ensure it doesn't "gather dust" by reading front to back.

 

Plan to give new homebuyers $50,000 to kickstart economy

"New-home buyers could pocket a $50,000 handout under a proposal from the property industry’s peak body aimed at kickstarting the sector weighed down by the coronavirus pandemic."

What does that have to do with the 50k for new-home buyers? You're already bought and exchanged contracts, right?

Nope, you've already bought, you're not going to be a new-home buyer in the future, unless you plan to buy more.

 

I see what your saying, but this is a handout to get construction flowing and jobs. @Jasper16 & @Spiralkut obviously have land which adds nothing to this but if they go an Engauge a spec builder with the amount of subbies & trades that benefit from it. I don't see why it should be any different. Lets see what actually comes off it first?

 

I've exchanged contract for land, haven't purchase a new home. It also says it's not eligible for existing dwellings so I'd say I have every chance of qualifying for this.

 

The MBA (Master Builders Australia) are also suggesting a similar scheme but I think $40k.
Pretty sure all these types of deals are state government governed so it's up to each state what they wish to do.
There is a lot of lobbying in WA for it to be "smarter" bonus where you might get increased grant if it's an infill block vs a block in an over supplied land estate. Or more if the construction meets some sustainability requirements. Also heard one proposal where a FHOG could get a grant to do a renovation on an established house (in WA FHOG is only on new construction)

 

Is this real or just a phantom dream?
I would love to know - Is it available for know down and rebuild? For investors and owner occupy?

 

This isn't anything, it's a pitch of an idea from a lobby group. You could ask any other lobby group for theirs and they'd tell you something else equally as valuable. Well maybe a touch less valuable given Scomo used to work at the Property Council.

 

I dont have much faith that anything will eventuate from these industry groups lobbying for a new home build grant but time will tell.
https://www.realestate.com.au/news/calls-for-40000-newhome-buyers-grant-to-avoid-industry-bloodbath/?rsf=syn:news:nca:news:spa:strap

 

Something is coming - I've been commenting on why they'll be all over this recently from a pure public policy solution perspective.

Certain journalists at the AFR's been on top of what the gov't has been thinking throughout this crisis in terms of policy responses. I suspect thats Coorey too when they say ['AFR understands']. Im sure Treasury would be working on proposals as we speak, probably going deep into one or two of them now...even though we're months out from the budget.

Possible designs:

- Demand incentives like grants. This is tried and tested, KRudd 08 did the same. Pretty easy to design and will generate construction jobs.

- Supply side incentives & programs in place. Think build to rent schemes, direct incentives to developers, etc. NRAS is one example that encourages development of certain stock types. In general, this liberal government doesn't like to operate in areas that they don't think is their job (CoA was all about this). They can shift this to the states by providing funding though and get around this ideology.

- Some form of jobs connection program for construction. I.e. tapered JobKeeper. The nature of the industry likely means this one isn't very useful. Also I suspect that they'd much rather get jobs going via actual productive work rather than income support measures (which may be required for tourism and other sectors). Based on the limited information I have as a non-informed bystander, I'd likely rule this one out.

- Tax incentives on builds too. Not sure how this can be applied, haven't really seen any direct tax expenditures on developers, but they could come up with something temporarily. Investment allowance to include capital/land...or something of that design to get developers to produce with a large tax write-off/assistance model.

PM digs heels in over JobKeeper savings