NSW Budget has little to help the housing sector: Chris Johnson

NSW Budget has little to help the housing sector: Chris Johnson
NSW Budget has little to help the housing sector: Chris Johnson

The NSW Budget indicates that the softening housing market has wiped out $10.6 Billion in expected stamp duty since 2017 but the Budget has no stimulation for the housing market.

The NSW Budget is a well -rounded document that continues the government’s roll out of city shaping infrastructure with $93 Billion committed to key projects.

The positive commitment to infrastructure is offset by a loss of $10.6 Billion in expected stamp duty due to the soft housing market.

The major commitment to infrastructure should underpin the urban growth across the state with a major focus on public transport growth that should occur around rail stations and in city centres.

The housing development industry is getting mixed signals from government on where development should occur and this is eroding confidence within the industry.

Confusion exists over the ‘missing middle’ code, the future of spot rezoning, affordable housing levies and the impact of lifting the cap on infrastructure levies.

Resolution is needed on these areas so that the current slow-down can be reversed.”

While housing construction is down the budget papers do point out that this is partly off-set by the large infrastructure construction commitment and a swing by some developers towards commercial office projects.

Unfortunately for the budget these projects do not contribute stamp duty to the Treasury.

The Budget Statement (P 2-4) states that apartment commencements fell 22 per cent within the final quarter of 2018 and then states ‘Expectations for ongoing strong population growth and a stabilisation in house prices from late 2019 should encourage the commencement of more projects.

How conditions in the housing market evolve over the next 12 months will be important for dwelling investment and household consumption.’ 

The budget included a proposal to drive reform of Federal Financial Relations with a review from a NSW perspective.

On major rail infrastructure projects the Sydney Metro West will receive $6.4 Billion over 4 years to fast track construction.

These large rail infrastructure projects in Minister Andrew Constance’s portfolio are important locations for Sydney’s growth.

Western Sydney is a big winner in the budget with Stuart Ayres portfolio receiving $561 million for 2019-20 towards the Parramatta Light Rail, $404 million to upgrade the Northern Road, $286 million for Westmead Hospital, $196 million for Nepean Hospital. $108 million for Campbelltown Hospital.

The Minister for Planning and Public Spaces, Rob Stokes, had smaller financial commitments including $113 million to create connected communities and $162 million to upgrade government-owned land and buy new land for public parklands as well as for increasing tree canopy across Sydney.

The NSW Budget demonstrates that the state’s finances are in a strong position but the reduction in expected stamp duty is warning signal that the housing market has problems in years ahead.

The Urban Taskforce believes that the NSW Government needs to have a plan to ensuring the softening housing market is managed back into a strong position that handles population growth and continues the large number of jobs the industry generates.

CHRIS JOHNSON is the Urban Taskforce CEO

Tags: 
Stamp Duty Nsw Budget

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