Council urges government to level the investment pathway for 150,000 new homes
While welcoming the introduction of the Treasury Laws Amendment Bill 2024, the Property Council of Australia said the bill still does not support creating 150,000 new build-to-rent homes by 2034.
“The legislation does not match the government’s welcome ambition to get us to the 150,000 homes we know are possible, as modelled by EY,” said Mike Zorbas (pictured above), chief executive of the Property Council of Australia.
“Right now, we have some of Australia’s best companies seeking investment partners to create a watershed new housing option. And yet it is easier to invest in every other kind of property that builds our cities than the new homes we desperately need, and that a level investment pathway would unlock.
“This legislation does not yet level that pathway and it fails to equalise the treatment of early adopters, leaving a future market less liquid than it needs to be.”
It has been a decade since the Property Council first proposed levelling the investment pathway for build-to-rent (BTR) housing. In contrast, the UK and US have integrated BTR into their housing markets, making up 5% and 12% of their housing supplies, respectively. In Australia, BTR represents only 0.2% of the housing market.
“We urge the government, the opposition, minor parties and independents to work together to level the investment pathway for those 150,000 new homes,” Zorbas said. “Investment for all housing is thin on the ground just when labour and material costs are peaking and planning systems are stuck in the 1980s.
“This is an historic opportunity for the parliament to create 150,000 new homes and better housing choice for all Australians, in our joint ambition to hit the nation’s welcome 1.2 million new home target. But in order to do that, this legislation must be fixed.
“Property Council members and investors are the only potential providers of this kind of housing at the scale needed and have already trialled successful projects across the country.”
The Property Council advocates for changes to make investment in housing equal to other property projects. It argues that the requirement for a proportion of affordable tenancies duplicates existing state and local government mandates.
The council supports affordable housing provisions that protect project feasibility and recommends a differentiated 10% withholding tax rate to attract investment. Analysis from EY suggests this could accelerate the delivery of 10,000 affordable homes.
The council also calls for existing projects to be grandfathered into the new framework at a cost of $7 million over a decade. Without this measure, it warns that rental stock could be removed from the market.
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