This article from the weekend by Nathan Mawby reiterates the point I've been making about scale #apartments not being the solution to the #housingcrisis.
"… Richard Temlett said feasibility problems caused by surging building costs since the pandemic and substantially higher finance costs were being compounded by government decisions to increase taxes on development and investments as well as to scrap incentives previously available to those buying off plans."
Well said. The current combination of: ➡️ #tax settings ➡️ #development charges ➡️ #planning regulations & imposts ➡️ #construction costs ➡️ low demand
mean large apartment projects in inner Melbourne will languish for years. Existing approvals will not translate to new projects, let alone the record low new approvals we are now seeing.
Put simply, not enough locals buyers want to purchase apartments in such projects, whether owner occupiers or investors, to give developers the confidence to commence constructing these expensive and complex buildings.
The prices developers would need to make these projects feasible means these apartments are not attractive or affordable for consumers off-the-plan. This also applies to completed units, even if the construction could be funded without any presales.
Similarly, the foreign investors which underpinned the apartment boom from 2014-17 have been alienated and disincentived.
To reverse this will require: ✅ walking back of major planning & design imposts ✅ reversing the myriad of tax changes ✅ serious additional buying incentives ✅ government underpinning of sales/end values
none of which are on the cards.
I'll keep saying it – #housingsupply needs to be solved by promoting housing typologies that aren't high rise apartments.