The Reserve Bank of Australia rate cut of 25 basis points will give confidence to the housing sector, says the Urban Taskforce.
“The housing sector in New South Wales and particularly in Sydney has been struggling over recent months.” says Urban Taskforce CEO Chris Johnson. “House prices in Sydney have been dropping and this has constrained spending and kept potential purchasers out of the market. New housing has been particularly affected by reducing prices leading to a big drop in housing approvals.”
“The new housing sector has been slowed down by two elections which created a risky, uncertain regulatory environment that deterred investment. The re-election of the Morrison Government has led to a lift in confidence that has included easing of credit restrictions on purchasers of new and existing homes. The rate cut announced by the RBA today is another important signal to potential home purchasers to get back into the market.”
“While the national related issues of credit easing and interest rate cuts are positive stimuluses to the market there are still some worrying issues at the NSW Government level.”
“The removal of the cap on local infrastructure contributions in a year’s time could add up to $60,000 on to the cost of a new home, just at the time the industry is beginning to regain confidence. The Urban Taskforce believes the cap removal should be put on hold until the new housing industry has stabilised. There are also concerns about proposals by the NSW Planning Minister, Rob Stokes, to remove spot rezoning and planning proposals from the planning system. It seems that the Minister prefers Local Environmental Plans by councils to always be up to date. Spot rezonings have previously been supported when a more recent state level regional, district, corridor or precinct plan, even in draft, form has been released. In these circumstances a spot rezoning can achieve strategic merit when assessed against the state government plans rather than having to wait up to 5 years for the councils plan to be updated.”
“The planning system must be able to respond to changes in circumstances, such as the investment in new infrastructure or changing demographic trends. A new metro line is likely to lead to the need for a greater density of development around the metro stations, and the planning system must respond to this in a timely manner.”
“The Urban Taskforce is keen to work with governments at all levels including national, state and local to ensure that housing supply matches population growth, so that homes are kept at an affordable level.”
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