The Property Council of Australia warned that state regulatory changes in Victoria may do more harm than good.
According to Asher Judah, the Council’s acting Victorian executive director, the moves of the Andrews government – which included an additional 7% stamp duty on foreign buyers, increased land taxes, a possible infrastructure tax, and the latest strict design guidelines for apartments – could be a recipe for disaster.
“There would be a halt in investment and a hit to confidence, meaning fewer jobs and lower tax revenue,” said Judah in an interview with The Australian Business Review.
“If we go down, (the whole economy) is at risk.”
Judah also explained that job losses in the construction sector would be imminent once the tighter regulations hit the property market.
“Property is the strong horse in the Victorian economy. We employ the most people, we pay the most tax and we are the biggest sector by gross domestic product,” said Judah.
Some experts argue that a construction slowdown is needed to prevent an oversupply in apartments, especially in the Melbourne CBD area. But limiting supply would hurt housing affordability, said Andrew Leoncelli, the Victorian managing director of sales agency CBRE.
The tighter regulations’ effects were also exacerbated by stricter mortgage standards, according to Melbourne-based Kincaid Developments’ Kris Burt.
“We are in a position that it is threatening jobs and developments and some developers,” said Burt.
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker