The Urban Development Institute of Australia (UDIA) has reiterated its call for the Federal Government to provide the property development industry with greater certainty in relation to its proposed Carbon Tax.
In a letter to Treasurer Wayne Swan, the UDIA has repeated its call for detailed economic modelling on how the carbon pricing scheme will affect the cost of new housing in Australia.
UDIA National President Peter Sherrie said there was concern within the industry the Carbon Tax may induce a sharp decline in land and housing demand.
The decline would be similar to that which occurred in the aftermath of the implementation of the Goods and Services Tax, he said.
According to Mr Sherrie the treasury modelling which accompanied the Government’s 10 July announcement didn’t specify what impact the Carbon Tax or the post- July 2015 market-based mechanism will have on the price of new land and housing in Australia, or on the housing industry in general.
“There have been various suggestions that the cost of an average new house will increase by between $2000 and $6000 under a Carbon Tax,” he said.
“We believe comprehensive industry-specific Treasury modelling is crucial to determining how the sector will be affected.”
Mr Sherrie said Australia can ill afford an uncertain investment climate in the property development industry.
“[The industry], is one of the major drivers of the national economy, directly accounting for 7.3 per cent of GDP and directly employing around 975000 Australians”, he said.