No stamp duty and reduce APRA mortgage buffers keys to making housing accessible: Mirvac

The developer says the government needs to look at reducing APRA mortgage buffers and offering loans to make housing accessible.

Mirvac CEO Campbell Hanan says out-of-the-box thinking is needed to address housing affordability. Picture: NCA NewsWire / Ian Currie

One of Australia’s biggest developers, Mirvac, says out-of-the-box thinking is needed to address housing affordability, with government-backed home loans and a review of APRA mortgage service buffers needed to make housing more accessible to younger people.

Mirvac CEO Campbell Hanan told The Australian on the sidelines of a Property Council conference in Townsville on Thurs­day that the government should have a robust conversation around mortgage service buffers set by the Australian Prudential Regulation Authority.

It echoes calls by National Australia Bank and the Australian Banking Association for APRA to lower the interest rate test for first-home buyers from 3 per cent above the cash rate to boost housing affordability.

“There’s a huge opportunity for (APRA mortgage buffers) to be reviewed, and that will make the ability of first home buyers to borrow money just a little easier,” Mr Hanan said.

Mirvac chief executive Campbell Hanan at the Property Congress in Townsville. Picture: Property Council of Australia.

“There are a lot of avenues that the government can explore. We would love to see some kind of lending scheme to assist and help young people into their first home like we see in the US with Fannie Mae and Freddie Mac.”

Mr Hanan described tackling housing affordability as one large puzzle, and he welcomed the Victorian government’s decision to remove stamp duty on built properties for the next 12 months. Under the plan, anyone buying an apartment, unit or townhouse of any value off the plan will not pay stamp duty.

Mr Hanan said having stamp duty only on the land value rather than the end value was a great step, and he would welcome the complete removal of the tax to make buying and selling easier.

“If you have a third of the value of a piece of land being tied up in contributions, whether that is taxes or infrastructure contribution, those things deeply impact affordability and so any change in stamp duty is welcome for young Australians trying to buy their first home.”

Removing stamp duty on new builds, such as proposed in Victoria, will help to make housing more accessible.

The main challenge in the housing sector remained the lack of construction capability and construction resources to meet the needs of the density needed to increase supply. Mirvac has branched into modular housing, such as prefabricated homes, which are built quicker and often cheaper as they require less labour than standard bricks-and-mortar homes.

The construction of modular housing is also not exposed to supply chain shortages, including disruptions due to severe weather events.

“The government is encouraging more modular housing, different ways of construction, and looking at some kind of extra deep depreciation benefits or tax incentives to do so. All of those things will help affordability,” Mr Hanan said.

“Ultimately, the whole housing issue at the moment has moved from one of being all about suppliers to now about supply and affordability.”

Additionally, Mirvac is eyeing opportunities to build affordable housing near key infrastructure, particularly train stations, which aligns with government efforts, particularly from NSW and Victorian governments, to increase density in areas well-serviced by public transport.

This strategy reflects a shift towards urban living, where access to transport is becoming a critical factor in housing development. Mr Hanan said Mirvac was ­committed to its core mission of creating quality communities, particularly through projects such as Green Square and Harold Park. “We’ve always been an apartment developer and a pretty good one,” he said.

The Transport Orientated Development policy in NSW allows for high-density development within 400m of 31 metro and railway stations, along with easier pathways for approval.

The reporter travelled to Townsville as a guest of the Property Council of Australia.

Originally published as No stamp duty and reduce APRA mortgage buffers keys to making housing accessible: Mirvac