QUEENSLAND is besieged by a housing crisis and in desperate need of 55,000 new rental properties.
The perfect formula to help alleviate this desperate situation is the business of Management and Letting Rights.
I attended the Queensland Housing Summit on October 20, where one of the key messages was that it is high time to further encourage property developers, property investors and the property management industry.
Developers and investors provide the necessary homes for people to live in, while it has been shown time and time again that Resident Managers make Community Title Schemes run more efficiently and provide housing that is far more affordable than it otherwise would be.
If Management and Letting Rights was put in place for all new residential schemes, the costs of running and maintaining them would be lower than under any other professional system. Owner’s levies would be lower clearing the way for lower rents.
The Queensland Housing Summit was held at the Brisbane Convention Centre and brought together Queensland’s Premier, Deputy Premier, the Treasurer, the Federal and State Housing Ministers, and the Queensland Infrastructure Minister, as well as the Lord Mayor of Brisbane and various Mayors, or their representatives, from throughout Queensland.
Also attending was Queensland’s Leader of the Opposition, the Shadow Housing Minister, several other State politicians, and senior public servants.
There were also leaders from the accommodation industry, with representatives from ARAMA, the Urban Development Institute of Australia, the Property Council, and people representing social housing groups.
It was a significant investment in time and resources, with the various portfolios working towards one outcome which is to create housing through social means and through the private rental market.
The Queensland Government will release an Outcomes Report in November outlining findings from the Summit, however one of the key takeaways was the Queensland Government doubling the size of its signature Housing Investment Fund to $2 billion to help build more than 13,000 new homes.
Premier Annastacia Palaszczuk said the $1 billion investment boost would help more Queenslanders get into new homes and that short-term solutions and longer-term strategies were needed to address supply.
She said her government was now targeting the construction of 5,600 new social and affordable homes by June 2027.
The Summit heard that 97% of the rental market in Queensland is provided by private investors. The government only provides 3% of housing. Queensland needs 665,000 rental properties, however only 610,000 are available, so there is a massive shortfall of 55,000.
Mass migration coming from other states has accelerated dramatically since COVID.
It was not that many years ago that a lot of our ARAMA members were under pressure because people were moving out of older buildings in an oversupplied Brisbane apartment market, to all the new stock that was being built. Now there is not enough of that new stock to cope with demand and our members in long-term rental buildings have people on waiting lists hoping to find a rental property.
In the March quarter alone, there was another 32,000 people migrating to Queensland and that has put even greater demand on a stretched housing sector. Overseas and interstate migration will continue to increase over the next five to ten years.
The Treasurer, Cameron Dick, told the Summit that Queensland had enjoyed a decade of prosperity and opportunity despite news of rising interest rates and other inflationary pressures. He predicted a decade of prosperity and opportunity leading up to and well beyond the 2032 Olympics.
He said the Housing Investment Fund was designed to provide a long-term, sustainable source of funding to build homes for Queenslanders and that the additional investment also recognised the impact that rising costs of building materials and labour was having on prices right across the construction sector.
The state minister for Housing and Communities, Leeanne Enoch, who attended ARAMA`s recent TOP Awards event said the injection of a further $1 billion at this critical time would mean more housing for vulnerable Queenslanders sooner.
There are key reasons for a deficit in housing in the State. One is that about 20,000 dwellings have shifted out of the long term rental market into other uses – primarily short-term letting.
Among them are the traditional family homes that have now become party houses in the suburbs and that are rented out on Airbnb and other short stay portals. Owners can often make more money from short-term rentals than from long-term tenants. Another reason is that the tenancy laws in Queensland have shifted too far in favour of tenants making it more unattractive to invest in the long-term private rental market.
Those often-empty short-term rental, detached or semi-detached houses could become permanent homes for thousands of families.
ARAMA is asserting that Councils should restrict the use of these Class 1 and Class 1A dwellings to the longer-term rental market with a minimum of 90 days. That would incentivise landlords to make them available for housing.
ARAMA is also asserting that the tenancy laws be reviewed to make them fairer and more balanced in favour of the landlord and thus more attractive for investors to convert the glut of short term party houses to the long term private rental market.
Short term rental is not suited to houses in the suburbs; however, it is ideally suited to Community Title Schemes where a Management & Letting Rights business in on the spot and able to respond 24/7 to better manage the behaviour of guests and the balanced needs of guests, tenants and owner occupiers needs far better.
Queensland also has a lack of new housing supply to meet the increased rate of household formation. In the last 10 years the average number of people per household in Queensland has dropped from 2.6 to 2.5, and even though that sounds like not much of a drop it has resulted in the need for 14,000 extra dwellings as young people move out of home to start their own families.
These extra dwellings can be ideally found in Strata Title Community Schemes developed by incentivised developers and managed by professional on-site management.
In Queensland, there have also been about 14,000 houses that have been withdrawn for repairs and alterations. That includes houses that are waiting to be demolished and rebuilt. What might have taken six months to build new houses until quite recently, is now taking 12 to 18 months. This also applies to about 2,000 Queensland houses that have been impacted by floods and are uninhabitable.
Supply constraints on the building industry are significant. Builders have been going out of business and building costs have escalated through slow supply of material and a shortage of labour.
The Housing Summit heard that building approvals have increased, however that work has not kept pace with the number of approvals. Approvals are also taking longer because there is now a shortage of town planners to process the increased approval applications.
This all coincides with rising interest rates, low availability and a recent real estate boom that has pushed property prices higher and caused landlords to demand bigger rents to make a return on the increased costs of owning an investment property.
The vacancy rate in Queensland was about 4.0% in 2017 when there was a glut of apartments, however it is now sitting at 0.5%, while average weekly rents in Brisbane have climbed from $370 a week in 2010 to $540 a week in 2022.
The State Government has promised to work more closely with councils, developers, super funds, and philanthropists to create a pipeline for investment in housing.
Part of the extra $1 billion in funding will include more money for people who are homeless and to reduce red tape in response to natural disasters. The Government is also planning an increase in prefabricated homes, both as an emergency measure and as a longer-term solution.
The Premier wrapped up the day by saying there would be an audit of vacant land, owned privately and by the Government, to see where they can convert some of that into social housing or where they can sell it off to private investors to develop that land for the rental market.
We live in extraordinary times.
Our ARAMA members have been hit with absolutely everything, especially in the last five years with COVID, floods and fire that affected the way in which we manage schemes and provide both short and long-term accommodation. Management and Letting Rights came through COVID, and the worst economic conditions in Australia’s history, in much better shape than most other industries because it delivers value and service to strata title communities.
More than 50 per cent of our members are involved in long-term residential accommodation, and because of the long-term nature of those caretaking service agreements, they result in reduced costs of maintenance and cleaning and greater efficiency. The lived experience of the residents is also enhanced by having on-site management to look after the needs of people who stay there.
Long-term caretaking service agreements are in the best interests of a scheme yet there are small groups who will try to tell you the opposite without any facts to support their incorrect assertions.
Our industry has been under attack more than at any other time over the past 50 years.
One of the key messages from the Housing Summit was that developers and investors provide housing, and the property management industry helps to manage quality properties at an affordable rate.
The more that developers build residential properties and the more those properties are well managed, the more Queensland’s housing crisis will be alleviated.
That is a message for all the knockers of the Management and Letting Rights industry. Many of these groups criticising our fabulous industry have significant problems within their own ranks, including allegations of price gouging, misleading and deceptive conduct, and a lack of accountability for their self-serving actions.
ARAMA has always believed that a collaborative approach as illustrated by the principles of the Triangle of Management is the best way to solve problems in Community Title Schemes and to focus on what is in the best interests of the scheme.
The Premier wrapped up the housing summit by stating that we should stop demonising developers, investors, and professional building management.
The knockers should stop throwing stones at Management and Letting Rights and the Developers and the Investors. We all know what happens to people in glass houses when they throw stones!
This article was contributed by ARAMA.
You can find more information at: https://www.arama.com.au/
Original article source: https://www.arama.com.au/news-item/11788/arama-press-release-december-2022