A solution to Australia’s sluggish start to the property market for 2012 may rest with the New Homes Building sector says First National Real Estate JM Chase, especially if associated regulatory and government taxes were reduced.
“New home building is a key barometer for the health of the domestic economy and can often drive first home buyer activity,” Jee Chin, principal, First National Real Estate JM Chase said.
“But the disappointingly weak start for new home sales early this year, indicate low interest rates are not enough to sustain improvements in new home building conditions and something more needs to be done at the policy level.”
An industry report released in February this year showed a decline of 7.3 per cent in seasonally adjusted new home sales in January, with Victoria experiencing the sharpest decline of 19.6 per cent.
“The report also showed a decline in detached house sales for NSW and SA as well, which further weakened results, but strengthened the case for government action,” Jee Chin said.
According to Jee Chin, a real opportunity exists for governments to set the new home building agenda and look at policy reform that will reduce new home building taxes.
“Up until now, both state and federal governments have relied on Victoria to prop up this segment of the Australian market, but the results show they can no longer do that. It is up to governments to show leadership and do something,” Jee Chin said.
“Policy reform, especially reducing taxes and costs for home building would have a multiplier effect. It would attract people in a financial position to build a new home, and have the knock on effect of increasing economic activity through jobs and sales activity.
“Everyone’s a winner, so why can’t we build more new homes?”
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