House hunters will ultimately bear the cost of a NSW government decision to increase the registration fees for land and property, with developers saying they will pass the price hike on to home buyers.
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The watched housing pot is nonetheless bubbling
Some folk have gone so far as claiming the housing market is cooling. Well, trying telling that to the people in the pot, who would most obviously be Sydney and Melbourne first home buyers.
The Baird government lifted the fees of registering land and property ahead of the sale of its land titles registry to boost its appeal to buyers. Some fees were doubled.
"The cost of registering a 150-lot strata plan, like a residential tower, has gone up from $22,000 to $43,000," said Jane Fitzgerald, head of the NSW arm of the Property Council of Australia.
"So if I'm a developer, I now have to pay twice as much and I'm simply going to put up the price of that apartment. It's not helpful in an already unaffordable housing market."
The Baird government is planning to spend the $700 million it expects for the registry on new sports facilities, angering lawyers, unions and property professionals who say the system is world-class, efficient and raking in $50 million a year.
The property industry's warnings comes after Fairfax Media reported that a privatised land titles system would make title insurance a necessity and see surveyors and conveyancers pass increased insurance costs to consumers.
Key members of the Property Council include Lendlease, Mirvac and Meriton. Ms Fitzgerald said they were struggling to understand why the fee hikes were so "extreme".
"We don't know why we haven't gotten robust answers around this and that's why I speculate about what the reasons might be," she said.
The lack of public consultation and independent assessment of the fee hikes and sell-off is in sharp contrast to one of Land and Property Information's 2013-16 goals of "building the confidence of our stakeholders by strengthening our robust and transparent governance processes".
Labor's finance spokesman Clayton Barr said the developers' warnings indicated a problem with the fee hikes.
"No one is in a better place to understand the cost of providing housing to the market than the developers, and when they're furious, we should all be furious," he said.
"The fee hikes are going to follow new housing and areas of high density, so in the inner west and south western suburbs of Sydney."
He said the legislation to allow the asset sale was pushed through the lower and upper houses within 24 hours in mid-September, preventing public scrutiny and debate.
"They have shown enormous fear of transparency in the entire process," he said.
Under Australia's Torrens title system, land titles are guaranteed by the government and the occurrence of fraud is rare. A Certificate of Title is an official land-ownership record.
Finance Minister Dominic Perrottet said the price restructure would spread the cost of registration more evenly between big developers and private individuals.
"For mums and dads buying a home, their Land and Property Information (LPI) lodgement fees have reduced by up to $61," he said.
"Under the new pricing model, more than 90 per cent of users lodging plans with LPI, particularly small developers and mums and dads subdividing blocks, will pay less than they previously did."
General secretary of the Public Service Association Anne Gardiner said land titles office staff were experts in their field, motivated to ensure accuracy and eliminate fraud, not to increase profits.
They were able to get the government to guarantee the workers ongoing employment after privatisation for four years, up from two years.
"Up to 400 people could lose their jobs as public sector workers. This isn't a job for them, it's a vocation, they're doing a service they're very proud of," she said.
The UK government was forced to abandon plans to privatise its land registry after a public uproar over the fact every potential bidder was linked to tax havens.
This week Treasury instructed potential buyers to formally express their interest with sale advisor JPMorgan before the end of the month.
Interested parties include overseas companies such as Serco and Borealis Infrastructure's Teranet, local players such as PEXA and Link Group, and infrastructure managers such as Hastings and Macquarie's MIRA.
Do you know more? ehan@fairfaxmedia.com.au
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