UDIA National: Keeping residential transactions
The Urban Development Institute of Australia (UDIA) has moved swiftly to develop a plan of action, advise government and industry and recommend interventions needed to sustain housing and construction activity during the COVID-19 pandemic and beyond.
‘Helping Australia Bounce Back’ – UDIA’s advocacy action plan, details six strategic steps governments can take to stimulate housing and construction during and after the pandemic.
Of critical importance is the need for governments, regulators, financial institutions and industry to sustain a continued flow of credit to homebuyers and investors, and to support property transactions and settlements.
These issues have been prioritised by UDIA National, alongside the extensive proposals and policy gains being advanced by our state divisions to reduce taxes, cut red tape and fast track development approvals.
Foreign investor approvals
UDIA National has received detailed feedback from industry members of potential extensive delays in the issuing of exemption certificates for foreign buyers of house-and-land packages or off-the-plan apartments.
The continued ability to attract and secure foreign buyers to our new housing markets is crucial to the ongoing vibrancy of the industry and often underpins vital pre-sales so that development finance can be secured, and construction can commence supporting much needed supply into the future.
To that end, UDIA National President, Simon Basheer, has sought assurances from federal Treasurer Josh Frydenberg (as well as Assistant Treasurer and Housing Minister Michael Sukkar) that FIRB applications will be processed swiftly during the COVID-19 period and beyond.
FIRB practice requires the processing of approvals within 30 days and UDIA is now working with the Government to ensure these timelines are maintained. We will keep industry members informed, and we are confident that Government wants to ensure efficient approvals are granted and maintained to support the housing and construction industry.
Valuations and settlements
UDIA has also turned its attention to issues arising from the impacts of COVID-19 regarding the preparation and acceptance of valuations, particularly on property settlements and transactions.
This week UDIA National President, Simon Basheer and Vice President, Max Shifman, held a preliminary meeting with the Australian Property Institute to understand issues from the perspective of property valuers and to provide an overview of UDIA member feedback.
UDIA is also reaching out to the Australian Banking Association, financial institutions, insurers, governments and regulators to ensure a sensible approach to property valuations and property finance, is taken during the COVID-19 pandemic.
If conservative valuations are placed on properties during the COVID-19 pandemic, this could negatively impact settlement pipelines and the ability for new projects to secure the required level of pre-sales needed to commence development.
There are complicated issues involved – but this is a “point-in-time” effect on the market. We know it will be imperative on UDIA, the Australian Property Institute and other sector representatives to work together to minimise any deeply negative and long-term market effect of risks associated with COVID-19.
UDIA National is active in its advocacy engagement on behalf of UDIA members, to ensure all industry and government stakeholders recognise the ‘hibernation’ strategy imposed on the economy is short-term, and that it is critically important we keep an eye on the long-term health of the industry and the national economy.
UDIA National is engaging with governments, ministers and agencies on its action plan and making a clear case: as an industry central to Australia’s economic prosperity, we are well-positioned to drive growth, jobs, wages and activity.
Our solutions have been deliberately designed to represent a low barrier-to-entry for government and be easily triggered without substantial legislative or administrative work.
Our advocacy endeavours complement the sustained work being undertaken by state divisions of UDIA, who are working diligently with state governments on local solutions.
The six immediate steps being promoted to the Commonwealth Government are:
- Release a second tranche of the First Home Buyers Deposit Gap Scheme, but exclusively geared towards new stock
- Introduce guaranteed deadlines for major projects currently caught in the EPBC assessment regime
- Pull forward projects on the Infrastructure Australia priority list that have the dual benefit of stimulating infrastructure development and housing construction
- Incentivise the states to cut assessment times in half for major project approvals and remove regulatory barriers to ‘shovel-ready’ housing projects
- Continue the partnership between governments, financial regulators and financial institutions to ensure a continued flow of credit to homebuyers and mortgage holders – and for APRA to reconsider the loan serviceability buffer in its residential mortgage guidance
- Commonwealth and states to expand stamp duty exemption schemes, roll back barriers to foreign investment and boost build-to-rent to underpin new land release and off-the-plan stock
We look forward to keeping you informed of progress. In the meantime, UDIA National wishes every member well during the difficult period and hope you stay healthy and well.