The Housing Institute of Australia (HIA) has come out in praise of the Abbott government’s successful repeal to scrap the carbon tax.
“The carbon tax has had a direct impact on energy production costs, which in turn flowed through the manufacturing and fabrication phases of building material, product and assembly production,” HIA Chief Industry Policy and Media, Graham Wolfe said.
When the carbon tax was introduced in 2012, there was much speculation as to how the property market would be affected. Supporters of the tax claimed it would encourage innovation to improve the energy efficiency of new homes which would significantly reduce energy costs in the long run. While others, like HIA, said it would just put more pressure on housing affordability as the input costs of building new homes would rise.
“HIA has advocated against the carbon tax since its inception, as it represents yet another impost on one of the most heavily taxed sectors in the economy… It has impacted on domestic manufacturing, jobs and material input costs in building new homes.” Wolfe said.
Australian Broker spoke with Wolfe about his thoughts on house prices – and the flow on effects to brokers – now the tax has been repealed.
“It’s very difficult to determine because there has been some product substitution – going offshore or using a different product that had less carbon costs embedded into it. There has been a market shift because of this and because of the impact of the timeline for the tax being embedded into the products. As we reverse, there is going to be certain stock held that will have the carbon tax embedded into it that will continue to filter through as commerce absorbs those materials held in inventory. The impact of removing the carbon tax is not going to be seen immediately," he said.
“There are also other market factors that will impact on house prices that have occurred over the last 18 months that may have a more substantial impact on the price of a house. So whilst the costs might change, the prices may very well have changed in response to other market dynamics and other implications," Wolfe added.
