Victoria must cease new laws that will cripple housing
State Government urged to think twice about initiating legislation at a time when building and fuel costs are continuing to rise.
DEALING with a shortage of homes and facing increasing costs of building products and fuel is not the time to be initiate new laws, according to the Housing Industry Association.
HIA Victoria executive director Keith Ryan is calling on the Victorian Government to immediately halt plans for any new laws affecting home building, including yet more changes to the National Construction Code (NCC) and the Buyer Protection laws, including minimum financial requirements (MFR), that currently are expected to start on July 1.
“Under what circumstances can reducing the viability of home building businesses be considered a good strategy. Particularly in the face of rising energy prices and global uncertainty,” Ryan said.
“Pushing reputable Victorian builders to the wall will not help Victoria reach its housing goals, which we must remember is ultimately about reducing the cost to young people to get into a home, and reducing the pressure on renters.
“HIA already has significant concerns with elements of some of the new laws being proposed, so the message to government is clear – now is the time to push pause on any new red tape.
“The last round of changes to the NCC are barely settled in and we know that they added between $20,000 to $30,000 to the cost of an average family home.
Ryan said the MFR is a new regulation that limits the maximum revenue a home builder can earn each year, to an amount 20 times their net tangible assets.
“No other industry faces such intrusive controls on how they run their business and MFR represents a significant overreach by government into the private sector,” he added.
“This ignores the realities of running a small business and shows a lack of understanding of the industry and the pressures it is facing to deliver affordable homes to Victorians.
“Feedback from HIA members shows home builders have recently experienced cost increases of up to 36 per cent for plastic pipes and fittings and fuel surcharges of 15 per cent for deliveries.
“Materials with high energy and transport inputs – such as concrete, tiles, cement and steel – are also rising.
“Rising costs are making the implementation of MFR even more problematic. These increased costs squeeze builder’s margins and reduce their net tangible assets.
“And at the same time, increased costs force home builders to raise their contract prices and therefore increase the risk they will exceed their permitted maximum revenue.
“Let us not forget that the Victorian Government has committed to support industry to build 800,000 homes in 10 years.
“If it wants to achieve this, it must delay the introduction of any laws that make it harder or more costly to build a new home,” Ryan said.
