It’s so great to see our Federal, State, and Local Governments pulling together and finally getting the message and taking steps to revitalise and turbo charge the residential property sector. It is also pleasing to see a much needed move away from a continuing trend to incentivise buyers which in turn just continues to exacerbate the supply chain problem.
With over $2 Billion dollars of national funding being injected into the National Housing Finance and Investment sector, along with McGowan’s $500 Million plus Social Housing and Homeless Investment fund, there is great moves afoot. Wisely, both governments have gone straight to the source by assisting the property development sector, with increasing building depreciation to 4% for the Build to Rent sector (BTR). At the same time, cutting withholding tax by 50% for trusts associated with BTR.
From a state level, the government has introduced a bill to parliament this week to reduce land tax by up to 50% for up to 20 years, once again directed to BTR, and at the same time announcing stamp duty exemptions and concessions for off plan purchases up to $750,000. Further help and multimillion dollar incentives have been aimed to assist the building and trade sectors of the property industry.
Closer to home, the local Perth City Council is formulating a plan to encourage developers to revitalise the city by awarding plot ratio bonuses, incentives, and concessions, as well as potentially reimbursing up to 50% of annual rates for BTR models. The BTR model has worked extremely successfully for decades across Europe, the United States, and in more recent times the Eastern States. This is seen as a great way to bring larger volumes of apartments to the market to ease the current rental crisis.
The strong increase in rents across Australia has helped fuel this model and it should be remembered that in the roaring 20’s, negative gearing was first introduced as an incentive to developers and investors in Australia to help ease the burden on the government of the day, in supplying houses to the masses. As we see today, further concessions to assist developers and investors are being used as a trigger point. But it is actually the cumbersome red tape, hurdles, and layers of costs through the development and approval process that need to be trimmed, cut, or abolished. By tackling this problem, it speeds up supply and entices builders and developers to re-enter the market, despite the other headwinds they are facing. Let’s continue to speed up the removal of the cumbersome bureaucracy and expensive charges across the house, land, and apartments and BTR markets.
After so many years of lobbying and advocacy to try and have the “Powers to Be” come to the table, this is so great to see!
All this is great news for the Australian residential property market, which has been forecasting this huge shortfall for several years. Hallelujah! Let’s keep it going!

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