Property Industry Calls for Licensing Scheme Pause Over Monopoly Fears
Canberra developers embarking on joint-venture projects are facing substantial additional costs under a forthcoming licensing scheme, with industry leaders warning these expenses will inevitably be passed on to homebuyers. The Property Council has raised serious concerns about what it describes as a government-created monopoly, where only one approved firm can provide mandatory ratings reports required for developer licences.
Monopoly Pricing Concerns for Developers
Under the new scheme set to commence in October 2026, developers must submit ratings reports from an approved provider to secure their licences. The Property Council has revealed that this requirement could force developers to pay tens of thousands of dollars for individual reports, with particular impact on joint-venture projects where multiple entities might each need separate assessments.
Ashlee Berry, the Property Council's ACT and capital region executive director, expressed strong reservations about the scheme's implementation. "We're expecting future homeowners to foot the bill for what could be described as a 'jacked up' company extract," she stated bluntly.
Berry emphasized that at a time when building costs and land prices are already elevated, adding another fixed cost to every project would not necessarily improve standards. "It will just make it harder for projects to stack up, and drive up the cost of housing," she warned, noting that this particularly affects smaller family operators and mum-and-dad developers.
Government Response and Industry Pressure
The ACT government has defended its approach, explaining that Equifax was the only one of five eligible ratings firms to apply for approval under the scheme. A government spokesman confirmed that the City and Environment Directorate recently wrote to the other eligible firms encouraging them to apply to provide the service.
According to government statements, the registrar requires ratings reports to support a "cost-effective and efficient application process." The spokesman explained that while some information could theoretically be obtained through ASIC data, criminal history checks, or detailed company information, rating agencies complete assessments independently using proprietary data sources, resulting in a less burdensome process.
However, Berry countered this argument, stating that "it forces every developer to pay thousands of dollars for information that government can already obtain through ASIC and other agencies." She called for the government to pause the scheme's October commencement, fix the problematic details, and implement clearer guidance.
Calls for Practical Reforms
The Property Council has proposed specific changes to address their concerns:
- Remove the current ratings report requirement as it stands
- Consider delaying commencement beyond October 2026
- Work collaboratively to implement effective checks and balances
- Ensure any additional costs actually benefit consumers rather than simply increasing project expenses
Berry stressed the need for "targeted, practical changes" that would give buyers, developers, and builders greater confidence in the system. The Property Council has consistently warned about the potential impact of developer licensing on affordable housing in the Canberra region.
Despite these concerns, the mandatory licensing scheme remains on track to start from October 1, 2026, exactly one year after the scheme opened for licence applications. The government has indicated it will continue working with property developers to discuss how the licensing scheme applies to different projects and corporate structures.
The spokesman noted that whether every joint venture partner requires its own ratings report and licence "depends on the corporate structure and what functions the different entities perform in a particular development." This clarification suggests some flexibility in application, though industry representatives remain concerned about the overall cost implications.
As the October deadline approaches, the tension between regulatory objectives and industry practicalities continues to shape discussions about Canberra's development landscape and housing affordability challenges.
