The Queensland Building Boost kicked off last August under the previous State Government with the usual fireworks and rockets, and a promise of help for the housing industry. Oh, that is way too tame – it was actually a political wedge designed to shut up the development industry. And it worked a treat.
BY MICHAEL MATUSIK
The grant was promoted as a panacea that would lift demand and help get more new development under way. Too many believed that would be the case, with some – even in the development industry – calling for the boost to be extended. And it was.
The then government set aside $140 million to fund the boost. That’s help for up to 14,000 housing starts across the state per $10,000 grant. The boost finished at the end of April, and unfortunately, along the way, housing starts in Queensland dropped.
In fact, the latest Australian Bureau of Statistics (ABS) building approval figures show Queensland dwelling starts totalled 26,515 for the year ending March, compared to 29,210 new commencements for the 12 months to March 2011. So there were 10 per cent fewer houses built, despite the boost.
While there was a flurry of applications as the scheme drew to a close, the number of actual starts was disappointing to say the least. As at April 19 – the latest figures we can get – only 8929 applications had been received and 6367 approved. That’s $64 million worth of grants out of the $140 million allocated.
So what can be done? Dropping interest rates isn’t the answer. I wouldn’t be surprised if Christmas crackers featured a new lame joke this year. Q: “How many interest rate drops does it take to stimulate the housing market?” A: “More than you have available.” Okay I won’t give up my day job!
It will also take much more than dropping the sustainability declaration form and reinstating the stamp duty rebate to get things moving again. So what else can be done in the meantime?
The first bit of legislation that should be ripped up is the Property Agents and Motor Dealers Act (PAMDA). The whole concept of PAMDA was flawed from the start. Twelve years have now passed since it was introduced and it needs immediate repeal. In today’s digital world it’s an archaic piece of legislation.
PAMDA and especially Form 27c, which requires all real estate agents in Queensland to list how much they charge for commissions, are deterrents to investment in Queensland. If the government really wants to regulate real estate and development then all parties involved in the property industry – architects, planners, builders, lawyers, quantity surveyors etc. – should be subject to disclosing their costs.
The second thing that needs to be done is reinstating government subsidies to local government for municipal infrastructure. Queensland’s mining industry started 40-odd years ago and isn’t a recent occurrence. The wealth created from such activity was once redistributed via infrastructure subsidies. This made residential development relatively cheap – well, cheaper than interstate.
This cheaper new housing encouraged interstate migration to Queensland, created employment and wealth, and was all based on subsidised municipal infrastructure.
In order to close a budget gap, previous governments stopped these subsidies. This made the price of new development land very expensive as it bore the full cost of infrastructure associated with it (and often beyond!). Council charges on land rose dramatically too.
The third thing that needs to happen is to cut the waste. The LNP needs to remove ‘zombie projects’. A commissioned audit needs to be done, but in essence many of the things that were pledged in the lead up to past elections need to be canned.
The zombie list should include regional plans – state-based planning operatives and many of Queensland’s building/planning laws. Why, for example, can a granny flat in New South Wales be rented out to anyone, but in Queensland it must be occupied by a direct dependant? I could create a list as long as your arm when it comes to irrelevant Queensland property-related legislation.
So in short, Can Do needs to change to Undo. In order to get things going Premier Newman needs to undo quite a lot of things.
Michael Matusik heads independent property advisory Matusik Property Insights and has helped over 550 new residential developments come to fruition. Michael authors the free Matusik Missive.