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Saturday, June 22, 2024

Budget a ‘mixed bag’ for housing

FOLLOWING Sunday’s welcome announcement that the concession threshold for first-home buyers will be lifted, the Real Estate Institute of Queensland (REIQ) says today’s State Budget delivers a mixed bag for housing and small businesses.

The Government announced its Budget would lift the stamp duty threshold for first-home buyers to $700,000 as well as a plan to build 600 more modular homes across regional Queensland.

REIQ CEO Antonia Mercorella said it was appropriate to see housing as the centrepiece of the State Budget which included some important first steps in the right direction.

“Starting on a positive note, the REIQ was successful in advocating for an increase to the stamp duty tax-free threshold for first home buyers, which was long overdue,” she said.

“While a $700k threshold is a significant improvement and will be appropriate for many parts of Queensland, it will have limited impact in areas like Brisbane and the Gold Coast.

“Therefore, we’d like to see recognition of how large and diverse Queensland’s housing markets are with a bespoke approach that ties the threshold to median sales prices to ensure first home buyers can take advantage of it in all corners of our state.”

Ms Mercorella said it was also pleasing to see that despite constant reforms on rental legislation, the State Government was not entertaining rent freezes or caps, which she said would squash investment confidence in Queensland rental properties.

“Seeing the increased funding materialise in the Budget for the housing sector is also a fitting recognition of the dedicated resources needed to make a real dent in the housing crisis,” she said,

“We also welcome the funding committed for the Sunshine Coast Rail line to Caloundra, which will unlock housing developments along that corridor, but it falls short of making it to Maroochydore.”

However, Ms Mercorella said it was disappointing to see that some of the Budget sweeteners would come at a concerning trade-off cost to Queenslanders.

“At first blush, increasing stamp duty taxes on foreign investors may seem like a good outcome for Queenslanders, but a lot of local builders and developers are partly owned by foreign entities and are instrumental in delivering new housing supply,” she said.

“We’re hearing our fellow peak bodies are dismayed by that decision, because the Government is giving on one hand with concessions to boost build-to-rent developments, but then taking with the other hand with new punitive measures which will lead to downward pressure on approvals.

“When it comes to short-term sweeteners such as the electricity rebates, we’re concerned that these could keep interest rates higher for longer, weighing heavily on mortgage holders and small businesses. 

“One economist noted that this measure alone may delay interest rate relief for ten weeks.”

Ms Mercorella said that beyond the support for 10,000 additional first home buyers, there are no housing outcomes identified in the Budget paper.

“With so much at stake we ask that the Government provides transparent targets and regular reporting against those targets to ensure that budgeted funds are being spent appropriately,” she said.

“It is particularly notable that the Service Delivery Statements for both Treasury and Housing do not mention a housing target next year for either Private or Public Sector.”

She said that the Budget had not pulled every lever possible for housing.

“The Sunshine State has such a bright horizon, but it’s hard to be optimistic about our future opportunities in the throes of a housing crisis,” she said.

“The lack of a broader infrastructure piece related to the Olympics, which is all but 8 years away, is a missed opportunity which is knocking the wind out of our sails.

“We’re also missing a trick when it comes to the lack of investment in productivity-enhancing infrastructure across the state, particularly as our population grows.

“We know that there’s virtually no confidence to build in Queensland and so while moving towards manufactured homes is a logical move in these circumstances, we also need to get to the root of our state’s construction emergency.

“The Government needs to do a better job of having conversations with the people who are behind building to understand why we are stalling/reaching a stalemate. 

“Further, there seems to be a reluctance to tackle bigger taxation reform, but if not now in the throes of a housing crisis, then when?

“Finally, the Budget is missing a roadmap to reestablishing Queensland’s AAA credit rating to ensure capital isn’t squandered away with higher interest rates on government debt.”

Homes for Queenslanders outlines the Government’s plan to build one million more homes including 53,500 social homes, help for first homeowners, more rights and financial support for renters, and a boost in funding for homelessness services.

Keep up with the latest news in Cairns and the Far North, and check out some of our top stories this week: Youth mental health unit for Cairns and Turtle education bid for Green Island.

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