Yesterday's NSW state budget brandished a clutch of measures to shore up the construction industry, with the state government slashing stamp duty on newly-constructed homes, establishing the $200-million Local Infrastructure Fund and extending the first home owners grant until June 2010.
The Housing Construction Acceleration Plan, which will cut stamp duty 50 per cent for people – including investors – buying new dwellings up to $600,000 between 1 July and 31 December 2009, has been welcomed by the industry.
The Urban Taskforce said the stamp duty reduction is the strongest measure taken by any government in Australia to support new home construction.
“This new six month scheme will deliver a larger grant for many newly built homes and far more people will benefit – not just first home owners,” Aaron Gadiel, CEO of the Urban Taskforce, said.
“Some people who aren’t first-time home buyers are now likely to bring forward their home purchase to take advantage of this grant,” Gadiel said.
The Housing Industry Association (HIA) said that the move is important in addressing the chronic shortage of housing stock across NSW, providing a “window of opportunity” for anyone thinking of buying a new home.
In the lead up the budget the Property Council put forward the Kickstart NSW proposal prepared by BIS Schrapnel, which argued for a one-year stamp duty exemption on all newly constructed dwelling valued up to $1 million for the 2009-10 financial year.
“Our proposal highlighted a stimulus of almost $1.8 billion in economic activity for a net cost to budget of $54 million”, state executive director, Angus Nardi, said.
“Specific benefits included the construction of 8,000 additional new dwellings, supporting the creation of 16,000 jobs, easing the growing pressure on rents and encouraging investors back into the market,” Nardi said.
“Although our proposal hasn’t been adopted in full, we are pleased that in a tough budget environment the treasurer has acknowledged the importance of housing construction to the NSW economy and made this first move on a stimulus measure,” he said.
Under the Local Infrastructure Fund, the state budget has also promised up to $200 million in interest-free loans to NSW councils to fast-track local infrastructure projects. Local councils can apply for NSW government loans to provide local roads, roundabouts and traffic flow measures, as well as water, sewerage and other local infrastructure, with priority will be given to projects that are ready to start or in high growth areas.
“Anything that provides an inventive for local councils to fast-track local projects and spend the current $880 million in development levies being held by councils across Sydney, Hunter and the Illawarra … is a welcome move,” Nardi said.
