‘Missed the mark’: Housing package under scrutiny
THE latest cash boost announced to stimulate the housing industry has been criticised by a Coast property developer, believing the package neglects a key market.
The Federal Government yesterday unveiled its HomeBuilder program, providing all eligible owner-occupiers with a grant of $25,000 to build a home or renovate an existing property.
Small is the New Big co-founder Ian Ugarte said the package "missed the mark" by not allowing private investors the opportunity to create more social housing.
"When I say social housing, I don't mean housing commission, I mean housing for people that need to be able to live in an area that they want to live in, and still be able to afford to rent and save money to buy their house in the future," he said.
"Currently, if you look at the Sunshine Coast, I think it sits at number seven as the world's most unaffordable city to live in for housing, when you look at the cost of housing versus the wages that people have here.
"It's vital that the funding is extended to include making existing homes and investment properties more resilient to serious economic downturns, like the one we're experiencing right now."
The Diddillibah man said one way of "pandemic proofing" the housing industry was for private investors to flip properties on the Coast to better suit the population's needs.
"I don't want to see stimulus going toward community housing providers and not-for-profits," he said.
"They already get enough funding and they're very inefficient with how they produce housing.
"What I see is the absolute ability for private investors to be able to stimulate the economy by using those tradies and the stimulus to create a better micro-apartment set up in housing on the Sunshine Coast, in particular."
Mr Ugarte said of those who are looking for rentals now, 60 to 80 per cent of the market are single people or couples.
"But the majority of housing available on the Sunshine Coast is three, four and five bedroom houses," he said.
"So what we suggest is the stimulus be used towards the renovations of those properties for the investors to change them into what the actual demographic really needs on the Sunshine Coast right now.
"These four-bedroom, two-bathroom properties that they build are just not fit-for-purpose for the families or non-families that need them."
Transforming one large property into five self-contained micro-apartments would be a win-win for both investors and tenants, Mr Ugarte said.
"Struggling investors could use this stimulus payment to fund a conversion that can take less than a week to complete and generate rental income of between $300-$900 per week more than the property next door," he said.
"If they allowed the funding to be extended to investment properties that allow the conversion of the 12 million empty bedrooms every night, then that would have an immediate impact to housing affordability and open up opportunity to allow the residents in this style of house to save money towards their own deposit relatively quickly."
Although there are further costs involved for the investors, including utilities and higher commission rates for real estate agents, Mr Ugarte said it would make securing new tenants easier and double their rental yield almost immediately.
"It changes the whole purpose of losing money so that you can get your tax back," he said.
"That only works when you've got a job and you're a high income earner.
"I'm a fan of creating policy that makes a change so that private investors can turn their property portfolio around from negative geared to positive geared while at the same time, helping the community out and providing much-needed affordable housing."
Federal Member for Fisher Andrew Wallace said the HomeBuilder scheme would be a vital lifeline for one of the Coast's most important industry sectors.
"The government's HomeBuilder scheme is going to help save jobs and livelihoods on the Sunshine Coast and provide a great leg up for locals who are looking to buy their own home or substantially improve their existing home," he said.
"If you have been saving toward renovating your home, or building a new home to live in, now is the time to get the project started.