The Real Estate Institute of Queensland (REIQ) is welcoming the housing initiatives in the Albanese’s Government’s pre-election budget, while calling for greater scale for impact.

REIQ CEO Antonia Mercorella said this budget recognised that housing supply constraints remain a pressing issue, and homeownership remains out of reach for many.

“The overwhelming constraint on housing affordability remains a lack of supply,” Ms Mercorella said.

“Resolving housing supply constraint issues and promoting other housing supply alternatives, such as prefabricated homes, are the cornerstones for more affordable housing.

“Queensland is well behind what is needed in terms of dwelling approvals - the 12-month building approvals to January 2025 were around 35,800 dwellings, substantially under the National Housing Accord target of around 49,000-50,000 dwellings per annum.”

Prefabricated housing offers great potential if scale economies achieved

Ms Mercorella said the REIQ applauds the $54 million investment announced by the Federal Government to boost the advanced manufacturing of prefabricated and modular homes - an industry with great potential to help alleviate housing shortages statewide.

“Prefabricated housing can be built much faster than a home constructed using traditional methods and is especially well-suited to regional and remote Queensland,” she said.

“However, for it to stack up financially, the prefabricated housing industry needs to realise economies of scale through greater production volumes.

“The REIQ recommends that the Australian Government encourage states and territories and community housing providers to use prefabricated housing for future social housing projects – for example, through financial assistance or co-investment in social housing projects. This could contribute to the industry’s growth and scale, reducing unit production costs.”

The REIQ also welcomes the $10,000 cash for apprentices to attract more labour in the residential building industry, and we encourage better mobilisation of skilled migration.

Expansion of Help to Buy is welcome but of limited application

“The expansion of the Help to Buy scheme’s income and price caps is a welcome move, providing a glimmer of hope for more Queenslanders who want to become homeowners for the first time,” Ms Mercorella said.

“However, the program still has a limited reach, as there will be only 10,000 places for Australia per year including 2,000 places for Queensland per year and we recommend the Government consider expanding the number of the program beneficiaries if there is sufficient demand from applicants.

“The REIQ also calls for greater bipartisanship regarding housing policies in the future so measures like this are not held up by politics.

“As the bill was introduced in late 2023, Help to Buy could have been operational in the second half of 2024 but now will not be open until the second half of 2025. This means many potential first home owner buyers have missed out on taking advantage of the scheme.”

Ban on foreign investors will achieve little

“In our view, the Federal Government’s previously announced ban on foreign investors purchasing established properties for two years (from 1 April 2025) will have little or no effect on easing demand pressure on the housing market,” Ms Mercorella said.

“This is because foreign investors are a small part of the housing market and there is already significant deterrents and restrictions in place for foreign buyers.

“These include being limited to brand-new properties or land to build (within a timeframe), an application fee for Foreign Investment Review Board (FIRB) review, and Additional Foreign Acquirer Duty.

“On the supply side, this ban could potentially limit the construction of new housing due to the ban, which includes foreign purchases to redevelop a property.”

According to the Register of Foreign Ownership of Residential Land, during 2022–23, foreign buyers made 5,360 purchases and 1,119 sales of residential real estate by foreign buyers in Australia. Most of these transactions occurred in Victoria, Queensland, and New South Wales. Notably, new dwellings and vacant land represented 66% of these purchase transactions, indicating that a significant portion of foreign investment was directed toward new housing stock rather than existing properties.

In Queensland, 403 established dwellings (36% of all foreign purchase transactions) were purchased by foreign buyers in 2022-23. However, this only represented 0.32% of total dwelling transactions in Queensland (the five-year average share was 0.19% since 2018-19). 

Social and affordable homes

The REIQ welcomes the first two rounds of the $10 billion Housing Australia Future Fund, helping deliver approximately 18,000 social and affordable homes for those who need them most.

We also support the $1 billion fund for crisis and transitional accommodation and the investment of $6.2 million over 3 years to support leading homelessness organisations.

Missed opportunities

“The REIQ recognises that many policy levers relating to housing affordability are at the state and local government levels, particularly stamp duty, infrastructure charges, and zoning policies,” Ms Mercorella said.

“However, given the Commonwealth Government collects around 76% of government revenues, states and local governments often lack the fiscal capacity to undertake important reforms – like tackling stamp duty and transitioning to land tax. 

“The REIQ recommends the Federal Government consider how reforms to federal financial relations could support the National Housing Targets. 

“We encourage the Federal Government to work with state and local governments to reduce excessive costs such as taxes, and regulatory fees, among other costs, and devote more resources to tackle administrative barriers that impede the construction of new housing.”

In research for the Housing Industry Association (HIA), the Centre for International Economics (CiE) has found that a large part of the cost of housing is due to regulatory taxes and charges. It has been estimated that in 2023-24, 41% of the cost of a typical house and land package was comprised of taxes, regulatory costs and infrastructure contributions, amounting to $348,000 on average.