Industry applauds National Cabinet’s property reforms

A step in the right direction, game-changing, ambitious and sensible are just some of the terms real estate industry bodies have used to describe National Cabinet’s housing policies announced this week.

On Wednesday, National Cabinet pledged to build 1.2 million homes over five years from July 2024, with a $3 billion New Home Bonus performance fund to incentivise the states and territories to build more than their share of the homes.

Other policies include a national planning reform blueprint to boost supply and promote medium and high-density housing in well-located areas that are close to public transport, amenities and employment.

National Cabinet also agreed to A Better Deal for Renters to strengthen renters’ rights across Australia.

The plan includes developing a nationally consistent policy to implement a requirement for genuine reasonable grounds for eviction and moving towards a national standard of no more than one rent increase per year for a tenant in the same property across fixed and ongoing agreements.

Real Estate Institute of Australia

The Real Estate Institute of Australia (REIA) welcomed National Cabinet’s action on housing over playing populist politics. 

REIA President, Hayden Groves, said killing off rent controls, suggesting possible reforms for states to help renters, a revised and funded housing target and long overdue planning overhaul are all things that deal with Australia’s severe housing shortage. 

“We welcome the focus on building more homes and a boots on ground approach. It’s time to convert these words into action,” he said.

“We thank the nation’s first ministers for emphatically and unequivocally rejecting rent freezes and rent caps.

“This is the optimal outcome across the board for rental supply, rental affordability and – most importantly – tenants.” 

Other measures under the better rights for renters include allowing tenants experiencing domestic or family violence to end agreements without penalty and with a streamlined process and evidence, such as a declaration from a doctor or a support service worker.

Measures also include allowing victims to change the locks and make security improvements without the landlord’s permission and have their name removed from databases if property damage is caused by family or domestic violence.

“The nine-point plan for renters seeks out a reasonable balance between enabling consumer protection and ensuring we aren’t overregulating and therefore diminishing the rental supply pipeline,” Mr Groves said. 

“REIA would like to especially welcome the strengthening of any protections on offer to support victims of domestic violence. 

“Domestic violence is insidious in Australian society with property managers often acting as proxy first responders. We must as a nation do whatever we can do to combat it.” 

Property Council of Australia

The Property Council of Australia welcomed National Cabinet’s commitments to boost housing supply and choices for buyers and renters as well as reform migration and city planning.

Property Council Chief Executive Mike Zorbas welcomed the commitment to strategic and sustainable planning of our cities that accounts for population growth and aims to be agile, accountable and coordinated at the state and territory level.

“National Cabinet is tackling our housing supply deficit in a coordinated way for the first time in a long time,” he said.

“It is taking a big picture approach to housing supply improvements that, if successful, will boost access to housing for all Australians.

 “The New Home Bonus, the Housing Support Program, the National Planning Reform Blueprint, the Social Housing Accelerator and the rental deal strike a sensible balance in progressing toward affordable new housing supply.”

Community Housing Industry Association

The Community Housing Industry Association (CHIA) and National Shelter said National Cabinet’s package of planning and rental reforms were a step in the right direction towards tackling the housing crisis.

The package of reforms includes consideration of the phased introduction of inclusionary zoning and planning to support permanent affordable, social and specialist housing in ways that do not add to construction costs.

“Inclusionary zoning promises to be a real policy breakthrough,” CHIA Chief Executive Officer Wendy Hayhurst said.

“It should ensure that new housing developments include a percentage of social and affordable homes, significantly expanding housing options for people on low and modest incomes.

“The particularly great thing about it is that it’s not a tax on development – the ‘cost’ is baked into the price paid for the land.” 

Emma Greenhalgh, CEO of National Shelter, said the rental reforms were highly significant, and laid a platform for further reform. 

“A nationally consistent limit of one rental increase per year is a long overdue reform, as is a ban on soliciting rent bidding and stronger privacy protections for renters’ personal information,” she said.

“We have come a long way. Six months ago there was no prospect of a national reform push on renters’ rights, but today we have seen solid progress.   

“Despite this, rental reform remains unfinished business. We need upper limits on the quantum of rent increases for tenants to provide them with genuine stability and security.”

Housing Industry Association

The Housing Industry Association (HIA) said the reform packages were a “significant step towards reforming the planning system and committing to build more homes”.

“The Government’s target of 1.2 million homes over five years is ambitious, but is needed if we are going to meet current and future demands for housing and keep housing affordable,” Jocelyn Martin, Deputy Managing Director – Industry and Policy, HIA, said.

“All the economic indicators are pointing to a slowdown in the commencement of new homes.

“Since the first increase in the cash rate, sales of new homes have fallen sharply and are 41.8 percent lower than at the same time last year and 26.2 per cent lower than at the same time in 2019.

“HIA’s Economic and Industry Outlook report released on Tuesday shows detached housing starts are expected to fall from a peak of 149,300 in June 2021 to just 95,370 in 2024, the lowest number since 2012. 

“Multi-unit commencements in 2022 were at a decade low at 63,510 and experienced only a modest increase in 2023 at 69,680.

“The Government’s announcement today including the New Home Bonus, the Housing Support Program and the National Planning Blueprint hits right at the heart of the issues which need to be addressed.”

Ms Martin said the National Cabinet’s plans were “ambitious” and local councils would need to deliver shovel ready land at an affordable price.

 “This is not something that has been easy to achieve in the past,” she said.

“HIA calls on all levels of government to take the housing supply issue seriously and commit to passing the legislation and staying the course with these new initiatives.”

Master Builders Association

Master Builders Australia applauded the game-changing measures to boost much-needed housing supply while taking pressure off some of the most vulnerable in our community.

Master Builders Australia CEO Denita Wawn said from social and community housing, rental properties to owner-occupiers, supply constraint was the common issue.

“All levels of government last year acknowledged the imperative of housing supply with the establishment of the Housing Accord, and now there are real commitments on the table.

“Governments across all levels must now implement the measures announced today as a matter of urgency.

“Master Builders had forecast that we need at least 200,000 dwellings constructed a year in order to meet demand.

“The revised new national target of building 1.2 million well-located homes over five years is welcome news and shows commitment to go above the baseline requirement.”

Ms Wawn said getting projects off the ground had been difficult due to high costs, a declining investment appetite from rising interest rates and delays in approvals. 

“A national planning reform blueprint that looks at the key pinch-points in the building process from planning, zoning and land release will be a key pillar in addressing our housing supply challenges,” she said.

“The New Home Bonus and Housing Support Program will assist governments to undertake the array of reforms necessary to boost supply and offset some of these costs.

“Master Builders has long advocated for a federal incentive payment program that looks at planning delays, developer charges, zoning restrictions and housing infrastructure investment.

“The cost of building homes has been exacerbated over recent years with unnecessary delays and barriers encountered on their journey to completion. This includes planning impediments, lengthy approval processes and high developer charges on new land developments.”

Ms Wawn was “thankful” National Cabinet did not impose rent caps or freezes.

“With Parliament returning in a matter of weeks, it’s imperative the Greens and Opposition now put politics aside and pass the Housing Australia Future Fund and housing supply bills,” she said.

“We cannot afford to play politics with the lives of many Australians who are struggling to absorb the increases in the cost of living and housing costs.”

Real Estate Buyers Agents Association of Australia (REBAA)

The Real Estate Buyers Agents Association said the new national target of building 1.2 million well-located homes in the five years from 2024 is recognition that housing supply is the answer to the rental crisis, not punitive reforms.

REBAA President Cate Bakos said it was pleasing to see National Cabinet’s focus on more secure and affordable housing, as well as its commitment to national planning reform. 

“REBAA welcomes the commitment to the significant increase of housing supply and looks forward to seeing more detail on the harmonisation of rental policies around the nation,” Ms Bakos said. 

“Renters are being forced out of areas, rental prices are soaring, and homelessness is a harsh reality for so many. 

“However, the rhetoric that has bounced around our nation for decades has been misguided at best. Sadly, policymakers have listened to cries of ‘greedy landlords’ without actually understanding the root cause of the issue when rents start rising.” 

Ms Bakos said the impact of fewer rental properties has resulted in a significant imbalance between tenant demand and rental supply. 

She said renters were experiencing the lack of supply from the moment they try to apply for a roof over their heads with long queues of prospective renters at open for-inspections. 

“Many tenants are applying with a higher rental figure in a desperate attempt to beat the competition because the supply and demand situation is so out of whack,” she said. 

“A sharp increase in supply is the only answer – and was reiterated by the announcement after the National Cabinet Meeting yesterday – and we must all recognise that the provision of housing is shared by governments, not-for-profits, trusts and private investors. 

“In fact, private investors make up the vast majority of rental providers – at some 83 per cent – across our nation.” 

Ms Bakos said little would have been achieved to support the plight of renters if governments had continued to disincentivise private residential property investment and demonise landlords.

“That’s why the range of priorities announced after the National Cabinet will be well received by the wider industry,” Ms Bakos said. 

“It shows that all levels of government are committed to increasing the supply of housing, rather than promoting punitive rental reforms that would see more investors exit the market and put further upward pressure on rents.”

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.