Australia's housing market is sending a warning signal on confidence, investment and future housing supply.
New ABS figures shows the total value of residential dwellings fell by $34.1 billion during the June quarter, driven by factors including interest rates and property tax hikes.
Property Council chief executive Mike Zorbas said the figures reinforce a market reality governments need to face head on, warning that housing shortages start when investors decide the next development isn't worth the risk.
“Housing shortages start when investors decide the next project isn’t worth the risk," Zorbas said.
“The Federal Government has important targets on housing supply that it is currently delaying by making housing supply investment harder.
“At some point population and household formation growth will put a floor under prices, but in the meantime, we are harmfully shrinking new supply with Federal tax change after change."
Zorbas said the property sector is already taxed heavily.
“Property is already hugely taxed – $130bn a year nationally and rising," Zorbas said.
“The current Federal trust taxes land on exactly the businesses carrying the greatest development risk.
“Context matters for market confidence. The government is continuing to hike housing taxes at a time of raising capital, labour and materials costs.
“This is stopping enquiries becoming sales and in turn stopping feasibilities stacking to support new home supply.
“The Federal government needs to relent on additional taxes on housing supply and, in those markets that are becalmed, to accelerate its funding to states for last mile infrastructure.”
