Today in property: tradie shortage holding up projects, NSW talks tough on apartments, tax cuts slow
Please sir, may I have some more?
It's all very well and good to call for more infrastructure to stimulate the economy, but it's not much use if there's no-one to build it and nothing to build it with. A couple of weeks ago we heard that Victoria has run out of concrete; today it's a lack of engineers, electricians and steel holding infrastructure development back on the eastern seaboard.
There was also a shortage of houses at auction over the weekend, down in volume compared to the previous week but holding steady on clearance rates. Inner-city auctions in the eastern capitals are keeping the clearance rate up; the numbers start to get a little squiffy outside the centres.
Stabilising of sales rates at the top end of the market may have something to do with that, according to CoreLogic head of research Tim Lawless. He reckons luxury property sales are the vanguard of a broader market recovery, although prices are still down...according to this piece, you can now buy into the top 2 per cent of Sydney properties for under $2.9 million; a year ago, you'd have had to drop closer to $3.3 million.
NSW government preparing to shake up building industry over apartments
State minister for regulation Kevin Anderson held a presser at Mascot Towers yesterday to announce an "emergency rescue loan package" for displaced residents. He also announced that the building commission will be given "the job of restoring confidence in the building industry...(investigating) accountability and transparency and look at the quality of buildings in the future. We are moving quickly on this, and you (will) see something very soon."
While he was at it, minister Andrews defended the industry and denied there are widespread problems in high-rise residential housing in Sydney. But he went on to say that steps the NSW government are planning will be "the biggest shake-up of the construction industry that this state has ever seen."
No doubt part of that shake-up will incorporate already announced plans to bring more medium-density housing to Sydney's suburbs. On this, the state government has a fight on its hands, with a variety of councils resisting what it calls over-densification. To see the impact of this, try applying to your local council today to build a dual-occupancy dwelling and see where that gets you.
Taxes, interest rates and the Great Australian Dream
The Reserve Bank meets on Tuesday 2 July to determine if rates will be cut by another 25 basis points. It's got a lot of people nervous or excited, depending on whether you're relying on interest from savings accounts or are in the market for cheaper debt.
The RBA will be leaning toward trying to get people spending as opposed to saving. For example, it has issued a report warning of the economic risks inherent in the weakness in Australia's $320 billion retail sector. It says this situation could have a knock-on effect that will extend beyond retail.
Whatever happens on Tuesday week, expect RBA governor Dr Philip Lowe to reiterate his call for more action from Canberra to help with the heavy lifting on stimulating the economy. For that to happen, the government says it needs to get its tax cuts package through parliament - and is increasing pressure on Labor to come to the party. Labor's meeting today to debate it, again.
Meanwhile, the boffins are dusting off old proposals to help the states make up for lost stamp duty revenue. Productivity Commission chairman Peter Harris is calling on Scott Morrison to pressure the states to introduce new land taxes, reducing their reliance on sales-based taxes for what he calls more stable forms of revenue.
Speaking of cheaper debt, financial product comparison site RateCity has drawn our attention to the fact that there are more than a handful of lenders offering 40-year home loan terms at the moment. These lifetime loans have lower monthly payment levels but cost more over the long term.
Big-time buying and selling
Stockland's yet-to-be-built town centre of its Elara masterplanned residential development in Marsden Park is up for grabs. Australia's largest listed residential developer is looking for a buyer; five parties are understood to have put themselves in the running.
Mirvac has cut a deal with Boral to develop the Wantirna South quarry site in Melbourne into a 1,700 lot housing community. It's in the Dandenong Valley Parkland corridor and will be worth $1 billion upon completion.