UDIA National Congress 2019
UDIA National Congress kicked off on Tuesday on the Gold Coast with a range of study tours from masterplanned communities, light rail infrastructure to higher density living options. It was a great opportunity to see the development that is occurring in the area and how the industry is responding to tightening land supply.
Presentations on Wednesday provided plenty of food for thought with market overviews by CoreLogic’s Cameron Kusher and Research 4’s Colin Keane highlighting the different speed markets occurring across the country. While Perth continues to experience the tail end of an extended downturn, Sydney and Melbourne markets have hit the brakes, coming off significant peaks.
Looking to how we can learn from global experiences, Debbie Jackson from Greater London Authority gave an interesting insight into how they are implementing “The London Plan” and planning for a growing city with limited space, addressing critical issues such as affordability and liveability.
Chris Key from Greystar shared his extensive expertise in delivering Build to Rent projects in the US. Chris highlighted some of the barriers to institutional investment in Build to Rent in Australia, including tax regimes, specifically land tax costs; foreign surcharges on state based taxes; MIT status; and GST. Significantly, he noted that transitioning just one per cent of Australia’s housing stock would be a $65 billion opportunity.
Moving to the future or our suburbs, psychologist Susan Pinker discussed the importance of social connections to living a longer life and what she coins as ‘The Village Effect’; while Joel Kotkin wrapped up the day with a look at how suburbs will remain the first choice for young home buyers, particularly with families, and the need to ensure a diversity of product in these areas to meet buyers’ expectations.
We look forward to sharing further learnings from Congress in the coming weeks along with announcing the National Award winners after the gala event tonight!
State of the Land Report 2019
UDIA National released the annual State of the Land report on Wednesday, highlighting the different speed markets around Australia and what is occurring in both the Greenfield and Multi Unit markets in each capital city.
For Perth in particular, the data highlights the continued struggle that the Perth land market is facing given challenging economic conditions.
The tightening of lending criteria by banks due to the Financial Services Royal Commission, as well as softening of the Melbourne and Sydney markets and the potential changes to negative gearing and capital gains tax regimes after the federal election are all factors driving negative sentiment in the property market and impacting on buyer demand.
Despite these challenges, the annual land market report shows that the second and third quarters of 2018 actually experienced growth in lot sales, reflecting there are some improvements in the state’s economy and consumer confidence.
However, the data shows that the year closed with sales falling significantly in the final quarter (a traditionally slower period due to Christmas), somewhat dampening those earlier signs of recovery. More information and the full report can be downloaded here.
UDIA proposes regulatory reforms for Streamline WA
Last week UDIA submitted its Streamline WA Regulatory Reform proposal, recommending three areas for consideration for priority areas of focus for the Streamline WA initiative. These included a review of the SPP 3.7 Planning in Bushfire Prone Areas; reinforcing the need for SAPPR and making its delivery a government priority; and the inclusion of housing affordability impact statements as part of the initial Preliminary Impact Assessment for agencies developing new regulatory requirements.
These proposed regulatory reforms, if implemented, are anticipated to result in improvements to housing affordability through both increasing the consideration of impacts of new policies on housing affordability and removing costly delays caused by excessive regulatory red tape. Read the full submission here.
Market-led Proposals policy set to commence next month
UDIA today welcomed the recent State Government announcement of the commencement of the Market-led Proposals (MLPs) on April 12, but revoiced concerns raised in the UDIA submission on the draft policy around the level of safeguards for intellectual property rights (view the Media Release here).
The intent of the policy is to act as an avenue for the private and non-private sector to present innovative ideas to build or finance infrastructure, or provide goods and services where proposals have not been requested by the State Government.
UDIA is supportive of the opportunities given through having an MLP policy in place to enable this process, and working more collaboratively with government to enhance WA’s communities and the economy by delivering new development and jobs in a more proactive manner.
More information is available here.
PACT Site Security Weekly Site Crime Report
UDIA Industry Partner PACT Site Security is pleased to keep members informed of crime activity in development areas in order to increase awareness.
Seven incidents of burglary, theft and damage were reported last week, outdoor feature lights were stolen from three display homes in Madox estate, Piara Waters, and inquiries are continuing to apprehend offenders.
In separate incidents thieves stole a contractor’s bobcat valued at approximately $80,000 along with 7,000 litres of diesel from a development site in the eastern suburbs.
For a free site risk assessment call 1800 272 836 or visit here
UDIA pushes to maintain current CGT and negative gearing settings
In our UDIA National campaign, “Building a Liveable Future for all Australians,” we have been campaigning and advocating our strong policy positions in the media. UDIA National received significant national media coverage on its commentary in the Australian Financial Review yesterday here.
UDIA is sending a strong message – don’t kill the market! Our key messages include:
- UDIA urges all political parties to maintain current negative gearing and capital gains tax settings. The package of reforms proposed by Labor is now an unnecessary solution to a problem that no longer exists.
- Sentiment is further dampening due to the suggestion of changes, further impacting the market. We already have an environment of falling house prices and softening sales volumes which are having a negative flow-on effect to the wider economy.
- Governments should implement a range of measures to broaden the overall taxation funding base to protect struggling home buyers from bearing the burden of additional fees and charges.
- The Federal Government should incentivise the States to move away from stamp duty to increase efficiencies of the market.
UDIA will continue to advocate on our members’ behalf in a proactive and structured way with all sides of government and key decision-makers.
PEXA Mythbusting Advice
PEXA has contacted UDIA with some advice for industry regarding a ‘myth’ that with PEXA, funds must appear on the statement prior to keys being given to customers. The correct process and reasoning was outlined as below:
- Since 1 December 2018, all eligible property transactions have moved online in Western Australia. This means that when online settlement occurs, keys can be handed over to customers when the PEXA Workspace (shared online area in PEXA where the participants can communicate and prepare documents for a property transaction) records the status ‘settled’.
- Disbursement of funds happens after the transaction has settled, and in most instances, takes less than 30 minutes to complete once settlement has occurred. Importantly, you don’t need to wait for funds to clear to consider the settlement finalised.
- The reason for this is that once a property transfer reaches a status of ‘settled’ on PEXA, the purchaser’s funds have been moved to the receiving bank at RBA (Reserve Bank of Australia) level. The receiving bank holds the funds on behalf of the vendor and attends to disbursement after settlement.
- This is equivalent to a paper settlement when a cheque is handed over and is later deposited into the vendor’s account. The depositing occurs after settlement. In both paper and electronic settlements, keys can be released to a purchaser after confirmation of settlement.
- Additionally, PEXA can send notifications to developers and estate agents upon successful settlement. Your law firm can use this functionality, allowing you to be notified by e-mail when a property has settled and therefore commence handing over keys to your customer.
Labour Force data released
According to the latest report released by the Australian Bureau of Statistics (ABS), levels of WA unemployment fell in February to sit at 6.5% (in original terms; 5.9% seasonally adjusted), 24bps below the rate at the same time last year and 108bps higher than the national rate of 5.4%.
Reflecting falling unemployment rates, the number of persons employed in WA increased 1.3% month-on-month (MoM) in February to 1.341 million persons, an increase of 0.5% YoY.
We value your feedback
UDIA is currently working on several submissions on behalf of members. We encourage you to forward any feedback on these items to policy@udiawa.com.au
- Draft Position Statement for Tourism in bushfire prone areas (here). Submissions close Friday 12 April, 2019.
- Draft Odour Guideline for Prescribed Premises (here). Submissions close Friday 19 April, 2019.
New direction for salinity management
The State Government is seeking feedback on a report, entitled A New Direction for Salinity Management in Western Australia: A Consultative Review, which recommends improvements for salinity management in WA through four key pillars – information, governance, innovation and investment. Further information is available on the Department of Primary Industries and Regional Development’s website here. Submissions close Monday 27 May, 2019.
Heritage Council of WA nominations open
Nominations are being sought from suitably qualified and experienced applicants to become members of the Heritage Council of Western Australia. Further information on membership requirements and the nomination process is available on the Heritage Council’s website here. Applications close on Friday 3 May, 2019.