Three things to know about the property industry, and how it affects you.

1. The planning system is central to housing affordability 

While we often talk about lack of supply and how that’s the key factor driving our housing affordability crisis, there’s much less discussion around what is driving the supply issue.

Unfortunately, the problem is not something that can be fixed overnight. 

The Victorian planning system is the most important tool we have to ensure housing can be planned for and built at the pace we need, at a price point people can afford. Our system is inherently flawed and inefficient, causing lengthy delays that hold up supply at a time when we need more new homes than ever, and prices are skyrocketing as a result. 

The good news is that something can be done. With serious reform, we can bring the Victorian planning system up to speed and start enabling the efficient and cost-effective delivery of new housing. 

2. Investors are critical to a healthy and affordable housing market

Investors have become a target, which is a real shame because they’re not the bad guys. If we look at the profile of an average Australian residential property investor, they don’t own multiple properties; they don’t even own two. According to a 2016 CoreLogic report, the average investor owns 1.28 properties, telling us that many investors are also renters. 

Then there’s the fact that without investors, we do not have rental properties for the increasing number of people who cannot afford to buy and live in their own home.  

Furthermore, people who invest in new housing are really important for bringing supply to market. New housing projects depend on pre-sales bought by investors to get up and running; without investors, new housing projects wouldn’t get started.

3. The property industry keeps the Victorian economy ticking 

The residential development sector alone is a significant job provider. According to the UDIA Residential Development Index, the sector sustained almost 183,000 jobs in Victoria in FY2015-16. 

According to the Victorian Government’s 2017-18 Budget, taxes on property now represent approximately 45% of the State Government’s taxation revenue and 15.5% of its total revenue. 

It’s fair to say then that the property industry is vital to the economy here in Victoria, and provides a huge number of jobs across the state. It is critical we ensure the sector remains healthy and robust well into the future.

Read more from Danni Addison, the Victorian Chief Executive Officer of the Urban Development Institute of Australia:

Demand for housing in Victoria will outstrip supply by 4,000 dwellings: UDIA

Am I crazy to buy an inner-city apartment?

Can Victoria build 55,000 new dwellings every year for the next 35 years?