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The 2019 federal election has now passed and as the re-elected Coalition government starts its work, LJ Hooker has made public its three-part wish list for the real estate sector.
LJ Hooker head of research Mathew Tiller said the Coalition needs to ensure it is focused on the strength of the industry that employs one in four Australians.
“The stability of a familiar government, and an expected RBA rate cut in the coming months, will boost confidence in the property market, encourage vendors to list their property and embolden buyers to re-engage with what’s on offer,” he said.
1. Accessibility to credit
Mr Tiller said it is a positive step that the Coalition has chosen not to follow the Hayne royal commission’s recommendation to cut trailing and upfront commissions for mortgage brokers, instead deciding to review the model in three years.
“This is a positive step for consumers, as it underwrites competition between lenders.
“A positive side effect of the royal commission was the improvement in lending standards by our banks, which has further enhanced the robustness and helped de-risk our banking sector. That said, overregulation and the tightening of standards to a point where businesses, first home buyers and occupiers cannot invest, upgrade or get their foot into the market is a fine line.”
Mr Tiller said that, taken too far, this could have far-reaching consequences.
“Not just property prices but also construction levels and jobs. Therefore, the government now needs to exert its influence and support borrowers by setting a policy platform that encourages banks to free up finance again.”
2. A comprehensive housing policy
The Coalition’s promise to support first home buyers is welcome, Mr Tiller said.
“This will provide a much-needed helping hand to those looking to get their foot on the first rung of the property ladder.
“However, this policy and the timing of the announcement shows that housing policy has become an election gimmick, which is only rolled out during the later stages of a tight election campaign.”
Mr Tiller said that the new government needs to consider, plan and implement a comprehensive, long-term housing solution.
He said it should include social and affordable housing, build-to-rent, taxation, construction and solutions for all market participants.
3. Housing minister
The property industry employs one in four Australians and residential property is valued at $6.3 trillion, Mr Tiller said, making it the most significant sector in our economy.
“Consequently, and in line with our call for a comprehensive housing policy, the appointment of a federal housing minister is needed to ensure the health of this industry,” he added.
“This minister would have a dedicated portfolio and agency and be charged with improving and implementing effective housing policy. A new housing portfolio created at the federal level would tackle all forms of property policy and strengthen the market through targeted incentives and reform, like other countries such as New Zealand, the US and the UK.”
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