15 March 2011
The Urban Taskforce said that todays promise by the NSW Labor Party to cut its levies on new homes by $27,000 would be welcome, except no detail has been offered.
The Taskforces chief executive, Aaron Gadiel, said that in January this year the NSW Government reaffirmed its plans to increase levies on new Western Sydney homes by 50 per cent from $12,000 to $18,000 each home, effective 1 July.
In the same month the Government announced plans for what it said would be a $8,800 levy on each new home in the Lower Hunter and $6,200 levy on each new home in parts of the Illawarra – although in truth these levies could reach as high as $52,000 a home.
Today, in releasing its Fairness for your neighbourhood policy, the Labor Party says it will maintain affordable development by slashing State Infrastructure Contributions by up to $27,000 per lot.
This would be a welcome commitment – if it is an actual promise to cut the excessive levies on new homes, Mr Gadiel said.
However, the government hasnt provided any details.
For example, does this mean they will not be proceeding with their planned 50 per cent increase to levies on new Western Sydney homes?
Does this mean they will wipe the proposed levies for Hunter and Illawarra homes?
We hope the Labor Party will follow through and provide the necessary detail on this promise.
Mr Gadiel said that NSW isnt producing nearly enough homes and high levies have been a major part of the problem.
We have 32 per cent of the nations people, but account for just 17 per cent of new house building activity and 28 per cent of new apartment and townhouse building activity, he said.
Within just three years NSWs housing undersupply is projected to reach 100,000 homes.
In the last financial year, work started on 52,000 new Victorian private sector homes, while in NSW work started on only 26,000 homes.
The housing undersupply is the main reason why residential rents have been galloping ahead of inflation.
Rents for three bedroom Sydney homes jumped by 10 per cent in 2010 – $40 a week – more than double the 2009 increase.
Last year rents for three bedroom houses jumped by as much as 21 per cent in the Illawarra and 14 per cent in the Hunter.
Wed love to see a firm commitment to cut state government levies on new homes, but more detail is required.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
Important postscript: The NSW Government has now reversed this promise, saying that there will be no cuts. See the Sydney Morning Herald article here for more information.