State of Markets – NSW September 2012

NEW SOUTH WALES

NSW investors may be slugged for extra fees

Property investors may see themselves facing new levies on their properties to fund state services, according to a NSW government discussion paper.

A charge of up to $1.07 per $1,000 of land value may be imposed on those who own NSW property if changes in the ‘Funding our Emergency Services’ July 2012 discussion paper are put into place.

The levy would assist with funding fire, rescue and other emergency services.

Under one of the proposed models for calculating the charge, the changes could see investors facing an extra $299.60 on a $280,000 block.

“Taxing the market value of properties provides a disincentive to make capital improvements on land, and thereby distorts investment decisions,” the paper states, explaining why land value should be taken over property value.

Sydney supply targets were 50pc short

Previous metro Sydney housing supply targets were almost 50 per cent short of the optimum number of dwellings to build, according to an independent public policy think tank.

The NSW government has been asked to take “drastic measures” in light of the housing market’s facing unprecedented supply issues, the McKell Institute said in a submission to the Sydney over the next 20 years discussion paper.

With a previous goal of 23,000 new builds per year for 2006 to 2036, the Institute has recommended that closer to 45,000 new dwellings a year should be the goal.

The lower-end recommendation is for 35,000 new dwellings annually.

However, even with the modest 23,000 new builds per year envisaged under the previous planning scheme (Metropolitan Strategy 2036), fewer than 70,000 new homes were built over the past five years, well short of the target 115,000.

“Only two regions in Sydney met their housing targets over the last five years – Sydney’s east and Sydney’s north,” the submission said.

Overall, New South Wales’ dwelling completions have dropped by 48 per cent since 2000.