Outdated taxation and planning laws are stifling the property market in NSW, writes John Cunningham.
Now is the time to come up with creative solutions to the housing affordability issue, which is hindering both buyers and sellers.
Many countries have found creative ways to increase supply and affordability through institutional investment, equity growth sharing schemes and government incentives for low cost housing strategies.
However in Australia we get bogged down in red tape, ideological differences, the three tiers of government, and people being uncooperative.
We urgently need an equitable housing model for first homebuyers, retirees and essential service personnel.
The old-fashioned taxation systems are preventing growth and the free flow of people in the property market.
The planning laws are also causing developers to lose money and waste energy whilst they wait for vague planning laws to be argued over.
In the end the property consumer gets forgotten and clever design, appropriate housing styles and much needed infrastructure get defeated by archaic thinking.
We need a serious policy that is not focused on a singular solution, but takes a creative view on what Sydney and the premier state of NSW can achieve.
The focus needs to be on creative solutions, including:
· Transfer duty tax reform to address bracket creep and assist first homebuyers and retirees to move, freeing up the severely clogged supply lines
· New planning laws that reflect the housing needs of 2020, not 1950, which require developers to think of new solutions to living in Sydney and realise what it takes to build density that is palatable to the consumer. This is zoned environments with easy access to transport, shops, and recreation facilities
· Our ageing population needs new housing which enables a vibrant lifestyle in mixed age communities, in familiar localities
· A new means test is needed for pensioners who are financially disadvantaged by low interest rates if they sell their property to downsize, forcing many to stay put out of fear of loss.
· A rethink on inequitable taxation involving property sharing and multiple occupancies. Currently if one equity investor leaves a shared home ownership scheme, the other party is hit with a secondary transfer duty in the buyout.
*John Cunningham is the president of the Real Estate Institute of NSW.
