What Effect Will The ETS Have on Real Estate

I was just wondering if anyone had come across any reports or information that looks at the implications that the ETS will have on real estate?

 

I haven't seen any articles that addresses this specifically, and I suspect that it's mainly because of the uncertainty of what will actually happen and the price yet to be set on carbon.

There could also be a factor of the Federal Government not wanting to discuss the issue - at the moment the Federal Govt is happy to quietly blame the state governments for their excessive development fees and charges - with fairly good reason in many cases. However, if you consider that making cement is one of the most energy intensive industries after Aluminium smelting (with places like the ACT virtually madate houses on slabs) and the cost of electricity going up something like 30%, the impact won't be subtle and the Fed Govt will get the blame.
It would be interesting to see an assessment, given the 'embedded energy' in construction materials and transport costs.

It's probably good news if you hold IPs already. All of the new housing stock will be going up in price to cover carbon taxes (by any other name) and increased building wages (as food, transport, etc inflation pressures wages) ... unless Australia goes nuclear (really quickly), or goes back to building mainly in wood or some new and less carbon intensive materials!

Want to take a guess? Say 10% on your average brick and tile construction - more if including green technologies become legislated?

Dave

 

Sounds like it will further exacerbate the "housing affordability crisis" given that disposable incomes will likely fall at the same time as costs rise.

Should make for another large blow to property developers.

 

Agree, and it won't be popular news.

Ironically it would seem that apartments that provide 'high density' living and the environmental benefits of that (lots of people near transport hubs, least amount of land clearing, etc) are the most reliant on concrete and steel and have lower land content. So you'd expect these to be hit hardest. ... how high can you build in mud brick?

Dave