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{{propApi.successMessage}} {{region}} Change locationWrong time to inflict more unnecessary regulation on home building industry
Wrong time to inflict more unnecessary regulation on home building industry
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HIA Victorian Executive Director, Keith Ryan, said the state is already dealing with a shortage of homes and is now facing increases in the cost of building products and fuel, resulting from the conflict in the Middle East.
“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,” said Mr Ryan.
“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.
“The MFR is a new regulation 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.
“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 ten 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,” concluded Mr Ryan.
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