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- Property leader says sky won’t fall in on housing market, but change is needed
Leading property expert Angus Raine, Executive Chairman of the Raine & Horne Property Group, says there are compelling reasons why the long-term outlook for Australian property has plenty of upsides. He also refutes the claims suggested by some market commentators[i] to the contrary.
“Looking ahead, the National Housing Finance and Investment Corporation[iii] (NHFIC) reported in February 2022 that more than 1.7 million new households are expected to form across Australia from 2022 to 2032. And from 2025 to 2032, Australia is expected to face a supply shortfall of 163,400 homes.
“In light of these statistics, it is hard to take seriously any claims of a property market crash,” said Mr Raine.
“Given the extreme volatility we are currently seeing on share markets globally, I would expect more Australians to embrace property as a primary investment choice, which will lend further support to housing prices.”
Change is needed
Mr Raine acknowledges that structural change is needed to make the property market accessible to younger generations of Australians and maintain affordability within rental markets.
“I applaud the New South Wales State Government for giving home buyers the option to bypass lump sum stamp duty,” said Mr Raine.
“Sydney currently has a median home value of $1,120,836[iv] Yet the stamp duty on this amounts to $46,525[v]. The average annual salary in Sydney is $77,000[vi], so the State Government is taxing Sydneysiders 60 per cent of one year’s income just to buy a home to live in.
“This is an impost that is grossly unfair and simply not sustainable.”
Mr Raine also believes that a relaxing of council regulations could help ease a shortage of rental homes.
“I would encourage local councils to embrace options available internationally such as the construction of prefabricated homes seen in the United States as a means of fast-tracking the supply of homes available to rent. This would help to maintain an affordable and accessible rental market,” said Mr Raine.
For today’s home buyers, it is important to take a planned approach, but this involves focusing on facts.
“Residential property is a proven long-term investment – and I see no reason for this to change.
The time to buy a home is when you have the funds available, and finance approved. Those who procrastinate are likely to just face higher prices in the future,” concluded Mr Raine.
[i] https://www.news.com.au/finance/real-estate/australian-house-price-decline-set-to-accelerate-expert-warns/news-story/f968badb0345b3ebea963edf2aa30a5a
[ii] https://immi.homeaffairs.gov.au/what-we-do/migration-program-planning-levels#:~:text=The%202022%2D23%20Migration%20Program%20will%20have%20a%20planning%20level,including%20those%20in%20regional%20Australia.
[iii] https://www.nhfic.gov.au/media-resources/media-releases/nhfic-releases-flagship-state-of-the-nations-housing-2021-22-research-report/
[iv] https://www.corelogic.com.au/__data/assets/pdf_file/0021/10875/CoreLogic-home-value-index-June-2022-FINAL.pdf
[v] https://www.apps09.revenue.nsw.gov.au/erevenue/calculators/landsalesimple.php
[vi] https://www.apps09.revenue.nsw.gov.au/erevenue/calculators/landsalesimple.php