Bleak outlook for homeless after election
Please note: The reposted article is owned and published by Newsport, where Property Advisor Colin Lee has provided expert opinion on the property market. Click here to view the official published article.
A leading property adviser is predicting homelessness is likely to worsen after the Australian Federal Election on May 21 as investors have been holding off on development applications.
Inspire Realty founder/property adviser Colin Lee, aka ‘Property Prince’, said with elections looming, some investors and developers were being cautious holding off on developments until after the election results were announced.
“Every developer I have spoken to nationally in the last three weeks has been waiting and seeing what the new government will put into place on negative gearing,” said Lee.
Negative gearing means borrowing to invest, as when you take an investment loan, your property is ‘geared’. ‘Negative gearing’ happens when the costs of owning a rental property exceeds the rent returns you earn.
Raine&Horne Port Douglas Licensee and Director, David Cotton, said historically, the real estate market slows down slightly before every federal election.
“Buyers tend to wait to see what policies are promised, and to assess any financial implications these might have on them.
“These can differ significantly on individual circumstances, so I cannot comment on the effects of these changes,” said Cotton
Some of the real estate companies, meanwhile, have undertaken charitable initiatives to assist with this cause.
The Raine & Horne Foundation, for example, has raised $50,000 for Dignity, an Australian charity making a real difference to the lives of those experiencing homelessness.
Dignity currently provides supported temporary accommodation and longer-term stable housing for hundreds of people every night of the year. The charity operates multiple programs to prevent homelessness, including food relief and education across Australia.
Since Dignity’s inception, it has provided over 95,000 nights of supported temporary accommodation to people experiencing homelessness.
Another initiative is “Walking in 1,600 socks”. The Raine & Horne Foundation raised a significant donation by selling 3,000 pairs of Swanky Socks as part of its “Take a walk in their socks” campaign that ran for the entirety of last year’s fourth quarter.
Alan Crossman, Principal & Licensee, Property Shop Port Douglas & Mossman, said there would be quite a time difference between an approval been given on a development property and its actual completion in any circumstances, so it will not resolve the immediate problem of a shortage of long term rental properties.
“At present there is around 10 properties for rent in the Port Douglas region and most of these will have been let by the time this article is published. Many owners who have been letting their investment properties out long term during the COVID period are switching to holiday letting as the demand for such has returned in strength and the income is attractive.
“One short term, part-solution, may be that homeowners/occupiers consider renting out that spare bedroom or the like and earn extra income as a result. This option will not suit everybody but it’s a thought,” said Crossman.
Mark Flinn, Selling Principal, Ray White Port Douglas, saidwith the lack of housing availability across Australia and with the costs to build increasing, “I cannot see why or how the government would want to or need to make any changes that affect the bottom line for investors in property.
“I believe the status quo will apply still. Even with an election coming up soon we still have strong demand across the board from buyers.”
Demand outstrips supply
Meanwhile, Lee said some of these developers are waiting to spend millions of dollars from small-time developers doing 4-5 townhouses to high rise unit developments. They want assurity.”
He said after the election, this would lead to increased rental and sales prices as demand would continue to outstrip supply.
“We will be even worse off because of this,” he said.
“Properties will not go down. People need a place to live and property is in high demand from renters and buyers.”
The national rental vacancy rate fell to one per cent in March, halving year-on-year, with all capital cities now operating in a landlord’s market, Domain’s latest Rental Vacancy Rate report found.
Landlords in competitive markets are being inundated with applications amid the shortage of available rentals and tenants are increasingly offering above the advertised price, or up to a year’s rent in advance to secure a home, agents have reported.
This pressure has increased following the reopening of international and domestic borders.
“Some people predicted properties would go down 20 per cent during Covid and they have gone up 20 per cent,” said Lee.
“It’s about time in property rather than timing the property. Homes are not being built fast enough to accommodate demand and we have a ferocious appetite from overseas.”
Women worse off
He said the homeless issue would escalate and Australian women in their 50s and 60s were thefastest-growing homeless group.
“In 2016, the Australian Bureau of Statistics reported there were 116,000 people homeless across Australia.
“Now, there are over 290,000 people and growing, according to Launch Housing.”
Lee has launched a Better Future Day on May 13 to give the community hope among growing disillusionment with the state of the world.