Top 5: Finance & property quotes week commencing 23 February

By the resi financial blog team, 02 March 2015

Top 5: Finance & property quotes week commencing 23 February

The Australian construction industry has been the hot ticket of the week, while the end of the week also saw some controversy surrounding the government's plan to tighten its foreign investment policy framework. Here is a round up of conversations this week.

#1. Last week the HIA released its National Outlook for summer 2015, but this week has seen it expand on state specific figures. Victoria was the next state to receive the encouraging news, with HIA Executive Director for Victoria, Gil King, reporting that the government needs to support the construction sector by loosening its tax grip.

"New home building is a heavily taxed area of the economy, with this burden ultimately being borne by new homebuyers," he said. 

"We look forward to working on solutions to these issues with the new Victorian government."

#2. While residential construction strives to new heights, Master Builders of Australia noted that the commercial sector needs a boost after the ABS revealed non-residential building declined in December. Chief Economist Peter Jones said weak business confidence is responsible for this decline.

"Today's figures reinforce the reality that fragile business confidence is working against a recovery in the commercial building sector," he said.

"Master Builders is calling on the government to reboot business confidence in the May Budget and has recommended measures that can achieve this in our Pre-Budget Submission." 

#3. Prime Minister Tony Abbott and Treasurer Joe Hockey announced planned changes to the foreign investment policy framework, focusing primarily on strengthening enforcement and compliance in residential real estate and agribusiness. 

"We need to make sure that all foreign investors are following the rules, and that those foreign investors who break the rules are not able to profit from breaking the law," they said in a February  25 release.

"The government is also consulting on the introduction of an application fee on all foreign investment proposals.  The application fees will fund increased enforcement activity and ensure that the cost of administering the foreign investment framework is not borne by the Australian taxpayer."

#4. This announcement caused a fair bit of discussion among industry bodies. The Real Estate Institute of Australia welcomed the drive behind the changes, but warned that introducing an excessive application fee could undermine offshore capital flows into the housing market.

"In setting the fee level for Australia, REIA encourages the government to consider the equivalent global rates and not discourage foreign investment that has been proven to increase the supply of new housing at a time of a severe shortage," REIA CEO Amanda Lynch said.

#5. While construction marches ahead, the Property Council of Australia has found that Sydney could face a significant shortage in housing unless local government intervenes.

"Sydney councils need to turbocharge housing supply because right now homebuyers and our economy are paying the price," said Glenn Byres, Executive Director for NSW.

"And if we fail to keep pace with demand, we drive up prices and make housing less affordable for the next generation of homebuyers."

Categories: Property Investment