Canberra developers have called for rates and land tax relief as part of a stimulus package for Canberra’s economy, saying that it is critical that construction continues to keep the local economy rolling.
Property Council CEO Adina Cirson said she has been in talks with the Canberra Business Chamber and the Master Builders Association about construction’s role in the post-COVID-19 economic recovery. She’s telling the ACT Government that the only way to recover the economy is to ensure construction continues.
“We’re trying to look at every single angle to make sure that projects get started, that we identify critical projects and, most importantly, the big infrastructure projects that the government has on its cards at the moment,” said Ms Cirson.
“Major Projects Canberra is coordinating on a daily basis with all industry groups, and giving direct feedback to the government and the ministers and we’re able to be part of that process.
“I think the collaborative way not only that industry associations in this town, but also the way that government is listening and reacting, on an hourly basis almost to the issues that we’re raising, is a really positive sign about how we can move through this together,” she said.
Display units for apartment sales are considered the same as open homes, and subject to the same social distancing measures, complicating the sales process for developers.
Morris Property Group head Barry Morris says that because of this, the sales side of the business has dropped to zero but the market is substantially different.
“They’ve been put into the same market, inspections by appointment only, and people aren’t making appointments,” he said.
But perhaps the most significant overarching issue for the sector is the sharp decline in confidence and willingness to buy property.
Village Building Company CEO Travis Doherty says that the drop in sales has the potential to undermine confidence around projects and marketing, timeframes and the viability of projects.
“So while retail is being impacted we’re still seeing interest in the property sector and obviously interest rates are incredibly competitive, better than what we’ve seen before,” he said.
Capital Estate Developments, part of Capital Airport Group, is also heavily invested in the importance of keeping construction rolling as much as possible.
Nick McDonald Crowley from the group identifies the lack of any certainty over timeframes as a significant problem.
“What are we dealing with? Is it a three-month, six-month, nine-month, 12-month, two-year scenario? Developers have an allergic reaction to uncertainty and we’re living it and breathing it every day,” he said.
But the sector is arguing that in these deeply uncertain times, land tax relief and rates relief could ensure the stability of the sector. Major developers are calling for more certainty from the ACT government over rates and land tax relief and help with payroll tax.
Some of those concessions are in place in other jurisdictions including Queensland.
Adina Cirson says that landlords are doing everything they possibly can to hold on to their commercial tenants and many are giving 100 per cent rent abatements.
“What they need from the government is assistance to maintain those tenants, over the longer term,” she said.
“We’ve asked for six months of cash rebates for rates for all commercial landlords and payroll tax waivers, that really will see that money flow through to the landlords which will then relieve tenants. We’re really hopeful there’s going to be something big in that package because our members are doing all they can to help their tenants at this time,” she said.
While construction looks likely to continue, the property sector is facing down major challenges during the COVID-19 crisis. Region Media talks to major developers and the Property Council about how they're responding.
Posted by The RiotACT on Monday, 6 April 2020