Markets in a ‘sound’ state despite shift: PIPA
The winds of change are sweeping through the country’s real estate market, but for Property Investment Professionals o...
Property investors have been unfairly caught in the crossfire amid the examination of the current housing affordability crisis, according to Performance Property Advisory.
The group’s associate director Heath Bedford said negative gearing and capital gains tax concessions have inevitably led to investors being falsely targeted as debate around housing affordability continues.
“The problem has more to do with our continued strong population growth, a chronic shortage of appropriate housing, all-time low interest rates and an undue focus on developing our capital cities,” he said.
“Restrictive planning policies have locked up a lot of our inner- to middle-ring suburbs from appropriate medium-density development, skewing our construction pipeline to high-rise development in our CBDs, inner-city fringe and house-and-land packages on the urban fringe.
“If you take a look at Melbourne and Sydney, for example, where all the media attention has been focused due to strong capital growth over the past five years, there is a real disconnect with the current new dwelling supply and what home buyers are looking for.”
Mr Bedford noted there are very few properties suited to the needs of those wanting to buy, with villas, duplexes, townhouses and small-scale apartment buildings overtaking the number of two- to four-bedroom properties in these areas.
“This is resulting in a lack of suitable housing development, with home buyers having no alternative but to pay inflated prices for existing stock, further reducing affordability,” he said.
Poor regional development has also played a role in inflating prices in the capital cities, Mr Bedford said.
“Slow land release in regional areas is a significant impediment to the supply of land for new housing and, coupled with the mismatch between buyer demand and the type of land released, this has been especially problematic,” he said.
“Governments need to focus on developing our key regional areas, which could be greater hubs for employment and education, dispersing demand more evenly.”