First National Real Estate CEO, Ray Ellis, welcomed the Prime Minister’s appointment of a new Minister for Population, saying he hoped appropriate action would finally be taken in addressing the challenges facing the property market.

“We have been calling for some time for a consistent unified and national approach to the property market,” Mr Ellis said.

“It is heartening to see someone in the government at last taking responsibility for this but I hope they will take into account all the relevant factors, and not just an isolated few.

“The issues we face as an industry are not limited to population growth, although it is a key driver of the property market.

“Other considerations include protracted, complicated and inappropriate planning processes, high taxes and imposts and the whole supply versus demand issue which is producing a chronic shortage of supply for this country in basically every state.”

According to Mr Ellis, if the government, and in particular, the new Minister for Population are really serious about making sure Australia is ready and well prepared for projected population growth in the next 50 years, they need to ensure representatives from all areas of the industry have a say in what is happening and how the future should look.

“There should be an appropriate forum established where key players in the industry are able to voice their opinions and concerns and put all matters on the table,” Mr Ellis said.

“Then, vehicles can be created to drive the necessary changes forward. Real estate is an industry that dominates government revenues, as demonstrated by the New South Wales Government’s recent tax windfall of 600 million dollars in unbudgeted stamp duty.

“This is on top of the reported $1 billion bounce in state and territories’ budgets as a resurgent property market boosts stamp duty receipts around the nation.”

Mr Ellis said the critical component here was getting a strong representation of appropriate industry members, and not just limited to the usual suspects of industry and peak bodies.

“To effect the right kind of change, the people who are at the coalface of the real estate and the property market should be involved,” Mr Ellis said.

“They are the ones who are dealing with both buyers and vendors, the financiers, conveyancers and lawyers and all the other aspects of operating in this property space.

“Who are better qualified than those to know what is going on and the impact of proposed changes on the man in the street?

Mr Ellis also warned of the kind of situation that can arise as a result of inappropriate property planning laws and increased levels of immigration.

In one instance, he was advised by a First National agent that no local buyers bought any of the 160 apartments available in an off-the-plan development because lawyers advised the foreign builder held nothing more than an option over the development and that title was not sufficiently secure. As a result, the vast majority of apartments were rapidly snapped up, and are believed to have been sold to foreign investors.

 “Housing approvals are still falling, and we already face a net shortfall of 50,000 new houses per annum on current figures and forecasts predict Housing Affordability to decline even further.

“Recent ABS figures show the prices of established houses rose again in the December quarter, in keeping with our own members’ experience, as outlined in our recent 2010 Property Outlook.

“In addition, there is no indication of an easing in rental vacancy rates for most areas in Australia, and, even with additional housing stock coming onto the market, there is still not enough to meet projected population growth figures.”

“You can develop all the infrastructure you like, but if the required number of homes can’t be built to meet the number of people seeking to live in this country, then you still won’t overcome the real issue.”

Principal of Chambers and Frewin First National, Dennis Riva, operates a First National agency in Hornsby, Sydney. He says the supply shortage is so dire that there wasn’t one new development released in Hornsby last year.

“As a result of dramatic changes in the Federal Government’s immigration intake in recent years, there has been a massive increase in immigration numbers and most of this pressure falls on Sydney and Melbourne,” Mr Riva said.

“Hornsby is situated close to high quality schools and has excellent transport links to city and suburban employment. As a result, we’ve seen more demand than the local market can supply.”