Queensland’s leading real estate body is calling for stimulus and support measures in the established housing sector to support the state’s long-term property market stability.
A new statement from the Real Estate Institute of Queensland (REIQ) has said support measures contained in the recent federal budget “must go further than construction and new housing to ensure the long-term stability of Queensland’s property market”.
While welcoming the extension of the First Home Loan Deposit Scheme, REIQ CEO Antonia Mercorella said “limiting first home buyers to new construction is a short-term sugar hit that’s only supporting a portion of the property market”.
“For the federal government to overlook established housing is disappointing, considering the original scheme, which enables first home buyers to purchase property with as little as 5 per cent deposit and no need for lenders mortgage insurance, included established residential dwellings,” she said.
She added that the original scheme’s design helped remove entry barriers for more first home buyers by exposing them to a wider range of affordable price points, particularly for many young families for whom new construction may not be feasible.
The REIQ has noted that the cost of new construction increased by 220.3 per cent between 1995 and 2018. Over the same period, established housing costs rose, on average, by 113.95 per cent.
These cost increases are despite annual price inflation ranging from 4.5 per cent in the early 1990s through to 2.5 per cent in the last decade — meaning CPI has increased by 69.9 per cent.
Meanwhile, mean gross household income has increased by 64.7 per cent.
According to the REIQ, the disparity points to a potential housing affordability issue for many first home buyers across regional parts of Queensland, particularly without an extension to the HomeBuilder scheme or other incentives.
Ms Mercorella has also pointed out problems with the HomeBuilder scheme’s limited time frame and associated costs.
“Without an extension of the HomeBuilder scheme, industry comments, supported by recent media reports, suggest builders won’t be able to keep up with the demand from existing applicants — particularly in South-East Queensland,” the CEO flagged.
She outlined how “every HomeBuilder approved sale needs to be contracted, with council approval and finance in place by 31 December along with any land subdivisions completed, and construction work started by 31 March next year”.
Ms Mercorella said it’s already resulting in rising building costs, which she condemned as something “that shouldn’t be happening in this environment”.
It’s why she is arguing that “any stimulus measures for the property market must support the whole of real estate for the benefit of all Queenslanders, which includes providing access and choice in established housing”.
The CEO said wider-reaching support would help “drive consumer confidence upward, accelerate our economy and increase the labour market across both construction and real estate, two of Queensland’s largest industry employers”.