Cash rate unmoved for another month
Cash rate unmoved for another month
Posted on Tuesday, August 04 2015 at 2:41 PM
In a move that had been widely predicted, the Reserve Bank of Australia announced today that the cash rate will remain at 2.0 per cent. It came down to that level on May 6, 2015, and has remained there ever since.
Governor Glenn Stevens said in his statement:
“Low interest rates are acting to support borrowing and spending. Credit is
recording moderate growth overall, with growth in lending to the housing market
broadly steady over recent months.
“Dwelling prices
continue to rise strongly in Sydney, though trends have been more varied in a
number of other cities. The Bank is working with other regulators to assess and
contain risks that may arise from the housing market.
“The Board today judged that leaving the cash
rate unchanged was appropriate at this meeting. Further information on economic
and financial conditions to be received over the period ahead will inform the
Board’s ongoing assessment of the outlook and hence whether the current stance
of policy will most effectively foster sustainable growth and inflation
consistent with the target.”
CoreLogic RP Data head of
research Tim Lawless says: “With dwelling values continuing their stellar run
of growth through July, the housing market was likely to be a key topic of
conversation for the Reserve Bank when they deliberated the cash rate today.
“Australian regulators,
including the RBA and APRA, were probably hoping to see value growth in the
housing market decelerating during the winter months, however the opposite has
been true in Sydney and Melbourne.
“Last month, Sydney’s
annual rate of capital gain reached its highest level since 2002, with dwelling
values tracking 18.4 per cent higher over the year, while Melbourne values were
11.4 per cent higher.
“While growth conditions
remain exceptionally strong in Sydney and Melbourne, the other capital city
housing markets are seeing much more benign rates of capital gain, highlighting
the fact that low interest rates aren’t having as strong a stimulatory effect
on housing market conditions outside Sydney and Melbourne.
“The third highest rate of
annual capital gain across the capital cities was Brisbane, where dwelling
values have increased by only 3.9 per cent over the past 12 months, and values
are falling in Darwin and Perth.
“We are expecting investor
demand will start to moderate as investment loans are both more difficult and
costly to obtain. Additionally, the cumulative effect of low rental yields,
worsening affordability, record levels of new dwelling construction and the
maturity of the growth cycle are likely to act as a disincentive to any further
acceleration in investment demand across Sydney and Melbourne, despite the
steady interest rate environment.”
Real Estate Institute of
New South Wales president Malcolm Gunning said low interest rates were
continuing to help boost the property market.
“There has been great
activity across Sydney and NSW since interest rates were cut earlier this year.
Property buyers are using these record lows to their advantage and as long as
they factor in future interest rate rises, now is a great time to upgrade,
enter the market or invest.”
The official cash rate has
fallen 275 basis points since November 2011, with the RBA cutting interest
rates twice in 2013 in May and August and at its February and May meetings this
year.
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Loans to investors still high – but investors should take care
Posted on Friday, July 31 2015 at 4:13 PM
Property investors are being warned to watch their home loan interest rates, while new investors will face a tougher time securing an investment loan, following new research into home loan market lending growth by comparison website finder.com.au.
The finder.com.au analysis of data from the
Australian Prudential Regulation Authority (APRA) shows that 16 banks have
grown their investment home loan lending by more than 10 per cent in the past
year to June 2015, including three of the four major banks: ANZ, Commonwealth
Bank and NAB.
Banks have collectively grown their
investment lending by 16.5 per cent in June 2015 compared to June 2014. Total
investment loans by the 73 banks monitored by APRA has grown from $435.7 billion
in June 2014 to $507.4 billion in June 2015.
Investment lending in the past year has grown more than
three times that of their owner-occupied lending. These banks have collectively
grown their owner-occupied books by just 4.5 per cent (compared to 16.5 per
cent for investment loans), from $829.9 billion in June 2014 to $866.8 billion
in June 2015.
Money expert at finder.com.au Michelle
Hutchison says APRA’s move to curb investment lending has done little to ease
growth.
“While APRA has
implemented measures to curb investment lending growth, many banks have clearly
not responded as their lending has continued to rise.
“In fact, 16
banks have increased their investment lending by more than APRA’s recommended
10 per cent growth rate in the past year, including some of our biggest banks.”
The biggest
increase in investment lending growth was by Macquarie Bank by 81.6 per cent to
$9.0 billion, largely due to acquiring loans books from other institutions.
The third-largest
investment home loan lender in Australia – ANZ – saw the second-biggest spike
in investment home loan growth, of 51.4 per cent year-on-year to $83.5 billion.
In contrast, the biggest investment lender in Australia –
Westpac – grew its investment lending by just 9.9 per cent in the past year to
June 2015, to $152.5 billion.
Growth over the past two years to
June 2015 saw investment lending by these banks increase by 28.6 per cent.
Compared to owner-occupied lending, it grew by 12.2 per cent.
Taiwan Business Bank saw the
biggest growth in
investment lending of 300 per cent over the past two years, while Macquarie
Bank also had the biggest growth for owner-occupied home loans since June 2013
of 155.7 per cent.
“Borrowers need to be mindful that
some lenders may pull back on investment lending harder than others, by
following the lead of AMP earlier this week and ceasing offering investment
loans, or increasing rates or tightening down on lending criteria,” Hutchison
says.
“In this turbulent market, it’s
vital to do your research and compare providers and their offerings, weigh up
the pros and cons, and ensure you’re getting the best possible deal for your
personal situation.”
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Affordability index sees fall in June quarter
Affordability index sees fall in June quarter
Posted on Friday, July 31 2015 at 12:03 PM
The Housing Industry Association (HIA) Affordability Index fell in the June 2015 quarter, signalling a deterioration in affordability conditions.
“The
positive impact of a second interest rate cut for the year in May was
overwhelmed by an increase in the CoreLogic RP Data median dwelling price and
the persistence of sluggish earnings growth,” HIA chief economist Dr Harley Dale says. “The net negative impact of these
factors saw the national HIA Affordability Index fall by 2.9 per cent to 79.7
in the June 2015 quarter.
“The
national affordability result masks wide variations around the country, an
unsurprising finding given the lack of geographical consistency to the current
residential cycle,” he adds.
During
the June 2015 quarter, affordability deteriorated by 3.6 per cent in capital
city markets, driven by Sydney and Melbourne. This was in stark contrast to a 2.7
per cent improvement for regional Australia. Compared with the June quarter
last year, capital city affordability worsened by 0.6 per cent, while in
regional Australia affordability saw a 5.2 per cent improvement.
“The
large differences in the results for the capital city Affordability Index and
its regional counterpart, together with the variation in outcomes between
capital cities, exposes the folly of sweeping generalisations that refer to an
Australian housing boom,” Dale says. “That is simply not what is occurring – in
many parts of Australia the extremely low interest rate environment is
delivering historically favourable affordability conditions.
“It’s
against this backdrop that authorities have escalated their requirements for
the rationing of credit to residential investors. The risk is that this will
obstruct new housing supply, aggravating affordability conditions in markets
around Australia,” he concludes.
ABS figures
released earlier this week show that total new home building approvals fell in June 2015, due to a
sharp decline in approvals for non-detached housing. Approvals for detached
housing continued an 18-month trend of relatively strong and steady levels.
In June
2015, the number of new home building approvals declined by 8.2 per cent to
17,868 in seasonally-adjusted terms. During the June 2015 quarter, approvals
totalled 56,351, 4.8 per cent lower than in the previous quarter.
“Both the
monthly and quarterly declines in new home building approvals were driven by
falls in non-detached housing approvals,” HIA economist Diwa Hopkins says.
“It
certainly looks like this segment of approvals has peaked, with each of the
last three months of activity falling well short of the record-high level
reached in March this year.
“In
contrast, detached house approvals have been tracking fairly steadily at
relatively strong levels for the past 18 months. Approvals in this segment of
the market have maintained an average of 9,650 per month since January 2014.
The last time such levels were similarly maintained was over a decade ago.”
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50% of investors plan to buy in next year
50% of investors plan to buy in next year
Posted on Monday, July 27 2015 at 10:11 AM
Recent research by property investment experts MRD Partners has revealed that more than half of property investors would like to buy a property over the next 12 months, and also that Queensland is the state of choice for property investors looking to buy.
More than half of
respondents to MRD’s Australian Property
Investor Survey indicated the Sunshine State was where their next
investment would be.
Queensland outstripped its
rival states of New South Wales, Victoria and Western Australia in popularity
by four to one, South Australia by six to one, Tasmania by 32 to one, and the
Northern Territory and the Australian Capital Territory by 48 to one.
WA was the second choice
behind Queensland, but it was a distant second, with only 13.61 per cent of
respondents indicating the state was their preferred investment location.
Nick Lockhart, MRD Partners’
managing director, says it was no surprise Queensland was the focus for
investors going forward, explaining that there had been plenty of speculation
over the past 18 months pointing to southeast Queensland in particular as the
place to invest, largely because it was long overdue for an upturn.
“Investors know all markets
go through what we call a ‘property cycle’, where there is typically a boom,
followed by a flat market and some price correction before it lifts again, and
Brisbane is the only capital not to have experienced a substantial lift since
the GFC,” Lockhart says.
“The Brisbane market has
moved from recovery to growth but has not yet entered what we could call a
‘boom’ market, so there’s plenty of opportunity for people to get in now and
buy before that growth comes.”
Survey respondents indicated they believed the Queensland market was “on
the comeback”, along with the ACT, SA and Tasmania. New South Wales and
Victoria were considered to be at the top of the cycle, while the property
market in WA and the NT were labelled as “in a slump”.
Lockhart notes that the WA
market has recently stagnated – or fallen in some instances – due to the
slowdown in mining, which is creating opportunities in the state for investors.
But he also notes the
majority of investors who indicated a desire to buy in WA were those from the
state, which was evidence of a preference to buy “in their own backyard”.
“Alongside WA, NSW and
Victoria were also high on the shopping list for investors, which was to be
expected,” he adds.
“Even though these states
have experienced significant growth recently, they will always be popular
markets as they have a history of strong growth.”
The survey found the
majority of property investors were positive about the market, with more than
51 per cent of respondents indicating they would buy over the coming year and
50 per cent indicating they believed negative gearing would remain despite
recent political debate about its possible removal.
Investors from the ACT
expressed the highest sentiment, with 89 per cent wanting to buy in the next
year, followed by those from NSW at 66 per cent.
WA, SA and Tasmania were the
only states where the majority of investors indicated they did not want to buy
over the next 12 months.
“Now is an amazing time to
invest due to the historically low interest rates on offer – but only in
certain markets,” Lockhart says.
“Investors should focus on
those markets that are in the recovery stage or entering the growth phase of
the cycle and should avoid markets that are at – or near – the top of a recent
growth phase.
“One of the exciting things about the Australian property market is that
it has markets within it at varying stages of the growth phase at any one time.
In that sense, there’s usually an attractive place for investors to invest, and
at this time the most attractive would have to be Brisbane and southeast
Queensland.”
The MRD survey results
dispel the common belief that property investors are “rich”, with nearly 87 per
cent of respondents identifying as being from a low-(23.71 per cent) or
middle-income (62.89 per cent) household.
Investors surveyed preferred
to buy a house and land (62.8 per cent) as opposed to townhouses (15.46 per
cent) and units/apartments (14.01 per cent), and were almost equally split on
whether they preferred to buy in the inner city (47.34 per cent) or in areas
further from CBDs (45.41 per cent).
“People still believe the
value of a property investment is in the land,” Lockhart says.
“In the past two decades master-planned housing estates have
sprung up making housing further from our CBDs more appealing. With them comes
a mixture of retail and commercial facilities, as well as residential housing,
usually with lakes, parks, community facilities, schools, hospitals and
bikeways.”
Article source: http://feedproxy.google.com/~r/API_Property_News/~3/VNUS1xmGJhk/50-of-investors-plan-to-buy-in-next-year
ANZ increases investor loan rates
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ANZ increases investor loan rates
Posted on Thursday, July 23 2015 at 3:13 PM
ANZ today announced interest rates for residential investment property loans will increase to manage investor lending growth targets and in response to changing market conditions.
ANZ said there was no change to other variable lending rates
including the standard variable rate for owner-occupied home loans or for
business lending. Fixed rates for new owner-occupied home lending will be
reduced by up to 0.40 per cent.
Effective Monday, 10 August 2015, ANZ’s variable residential investment property
loan (RIPL) index rate will rise by 0.27 per cent to 5.65 per cent.
Fixed rates for new residential investment lending will also increase by up to
0.30 per cent.
“Although interest rates for residential property investors are at
very low levels historically, the decision to raise interest rates for residential
investment lending has been difficult but necessary in the current environment,”
ANZ CEO Australia Mark Whelan says.
“It allows us to balance the mix of our lending between
owner-occupied and investment lending as well as the impact of changing market
conditions. This includes a decision to cut fixed rates for new owner-occupied
home lending.
“This is a considered decision that takes into account our
customers’ position and the criteria we look at when setting rates including
our competitive position, our regulatory obligations and the state of the
residential property market.”
ANZ has also introduced a series of other measures recently to
improve the mix between investor and owner-occupied lending. For residential
investment lending, these include reducing interest rate discounts, increasing
the deposit required to at least 10 per cent and increasing interest rate
sensitivity buffers.
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Most still feel now’s a good time to buy
Most still feel now’s a good time to buy
Posted on Friday, July 24 2015 at 1:51 PM
A majority of survey respondents think it’s a good time to buy property despite rising capital city home values over the past three years according to the CoreLogic RP Data Nine Rewards Consumer sentiment survey, released today.
Over the June 2015 quarter, 60 per cent of
respondents agreed that now was a good time to buy a property or home, though
this proportion fell from 71 per cent of respondents at the same time a year
ago, and is down from 80 per cent over the second quarter of 2013.
CoreLogic RP Data research director Tim Lawless says
a majority of respondents still feel that it’s a good
time to buy property.
“With the current growth period having run for
so long it isn’t a surprise to see a fall in the proportion of respondents who
think now’s a good time to buy, particularly in the hottest market – Sydney.”
The regions where survey respondents were most
optimistic about buying conditions were in Tasmania, regional South Australia,
Brisbane and in regional Queensland.
This comes as no surprise to Lawless, who says
these regions are yet to see a substantial run up in prices.
Conversely, he says, “Sydney and regional New South
Wales-based respondents were the least optimistic about buying conditions,
which can probably be attributed to the high rates of capital that have been
recorded over the past few years.”
Sixty-five per cent of respondents thought it
was a good time to sell; the highest reading in the history of the survey,
which began in the first quarter of 2013.
Sydney and Melbourne-based respondents were the
most optimistic about selling conditions. Given the strength of the housing
market in these cities.
“Perceptions around selling conditions in the
Northern Territory and Perth, where property values are now in decline and
listing numbers are rising, were more subdued,” Lawless says.
The survey also asked respondents about their
expectations for capital growth over the next six and 12 months. Forty-eight
per cent of respondents expect home prices to rise over the next six months,
while 45 per cent are expecting prices to rise over the next 12 months. Only 14
per cent of respondents expect prices to fall over the coming year.
Respondents in Tasmania were the most optimistic
about the likelihood of capital growth for their state, with 60 per cent
expecting prices to rise over the coming year.
Lawless believes this result confirms an
improvement in local sentiment across Tasmania, where the market’s previously
recorded weak conditions but has recently started to show some capital gain.
Sydney and Melbourne also saw more than half the
respondents indicating that they expected further growth in property prices
over the next 12 months.
Across the country, respondents from regional
Western Australia were the most pessimistic about local housing market
conditions, with only 14 per cent of respondents indicating they expect prices
to rise over the next 12 months.
Lawless says: “With attitudes around future
capital growth broadly still strong, it’s interesting to note that when
respondents were asked whether Australia’s housing market was vulnerable to a
significant correction, three quarters of respondents felt that it was. This
was the highest reading we’ve received for this question, which suggests that
despite a perception that prices will still rise, more Australians are becoming
concerned about a correction in the housing market.
“Respondents based in regional Western
Australia, the Northern Territory and Sydney were the most wary about the
market’s vulnerability, with 86 per cent, 80 per cent and 79 per cent of
respondents respectively indicating they were concerned values could fall
significantly.”
Another aspect of the market surveyed in June
was respondents’ perceptions around foreign buying. When asked if they thought
foreign buyers were making it more difficult for those living in Australia to
own their home, 73 per cent responded yes.
The effect of foreign buying was perceived to be
most evident in Sydney, regional New South Wales, Melbourne and Tasmania, where
are least 79 per cent of respondents thought foreign buyers were making it more
difficult for Australian residents to purchase their own home.
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States shout louder for stamp duty changes
States shout louder for stamp duty changes
Posted on Friday, July 17 2015 at 2:29 PM
Several states across the country are calling for more action on the subject of stamp duty and, particularly, the scrapping of it.
The presidents of the Real Estate Institutes of Western Australia and NSW, David Airey and Malcolm Gunning, have called for a wider and “more mature” debate around property tax reform and specifically the role negative gearing plays in the provision of rental housing.
The Reserve Bank of Australia (RBA) this week expressed concern about the high use of negative gearing around the nation, estimated to cost taxpayers $12 billion annually.
Airey says negative gearing provides much needed rental accommodation across the nation and helps moderate rental prices through the tax breaks to investment property owners.
“It should be remembered that negative gearing is not a specific tax break but in fact is a tax provision for earning income on assets,” he says.
“It’s too simplistic just to target negative gearing as an issue for review without looking at the wider housing system and the clumsy patchwork of property taxes across the country.”
Gunning says the REINSW has been highlighting the inefficiencies of stamp duty for too long without action from the state’s government.
“Stamp duty clearly distorts prices and adversely effects property transactions,” he says.
“We have to stop the talk and start to see action. The state has got to put its own self-interest aside for the benefit of the broader economy.
“While we’re calling for an abolition of stamp duty, a first step, as a revenue neutral initiative, is to address the stamp duty brackets, which haven’t been adjusted for 30 years.
“This will have no impact on the state because there is clear evidence that a reduction in stamp duty rates will generate additional sales.”
Gunning says that the REINSW recognises that ultimately, if stamp duty is going to be abolished, an increase in GST will be necessary, which will take involvement from the federal government.
“However, it’s time for the NSW Government to stop hiding behind the Commonwealth and start making real decisions for the future of our great state. Something can and should be done now.”
Airey says that a recent report independently commissioned by the Real Estate Institute of Australia and conducted by ACIL Allen, debunked the myth that negative gearing was a sop to the rich.
“The report found that two-thirds of property investors earned a taxable income of less than $80,000 per year and that 73 per cent of those who negatively geared owned just one property.
“Too many people are quick to jump on the negative gearing bandwagon with unsubstantiated claims that it adds to overall house prices and doesn’t add to new stock.
“There is no credible evidence for this and it distracts people from the real issues that contribute to affordability, including stamp duty,” Airey says.
In its recent pre-budget submission to the state government, the REIWA reiterated its call for reform of property taxes.
“Stamp duty’s the biggest hurdle to the ingoing costs of a new home. It is a huge sum of money and it can also be prohibitive to retirees looking to downsize.
“We need a mature debate about abolishing this inefficient and outdated tax and replacing it with a modest land tax across all owners. This will help greatly with affordability and assist state governments with a more predictable revenue stream,” Airey says, adding that the current federal tax system review is a good opportunity for a mature discussion on taxes, the GST and particularly property taxes.
“I encourage the Barnett Government to commit to a review of state taxes in the lead-up to the next state election. For too long discussion around property taxes has been ill informed and ad hoc. We really need to pull it all together and thrash out the issues properly in an integrated way rather than focus on isolated bits of what is quite a complex housing system.
“The problem with property taxes is not negative gearing, it’s negative discussion,” Airey concludes.
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Massive home building boom set to move into oversupply
Posted on Monday, July 20 2015 at 10:56 AM
According to economic forecaster BIS Shrapnel, the record-beating residential building boom has already reached its peak and will soon begin to run out of steam.
The
company’s Building in Australia 2015-2030
report says that national dwelling commencements are estimated to have reached
their peak over 2014/15 and will begin to gradually decline from this level in
coming years.
“After
recording strong growth over the past few years, we estimate that total dwelling
starts reached just over 210,000 in 2014/15, an all-time record high,” associate
director Dr Kim Hawtrey says. “From this level, national activity is then
forecast to begin trending down over the following three years, with the
currently high-flying apartments sector leading the way down.”
While
a sizeable dwelling stock deficiency coupled with record-low interest rates drove
building activity to its current highs, Hawtrey warns that the national market will
shift into a mild oversupply by 2018.
“Low
interest rates have unlocked significant pent-up demand and underpinned the current
boom in activity,” he says, “but as population growth slows while construction
activity remains strong, new supply will begin to outpace demand.
“This
will see the national deficiency of dwellings gradually eroded and some key
markets will begin to display signs of oversupply.”
In
the company’s latest forecasts, net overseas migration is expected to continue
its recent downwards trend and gradually ease in response to softer employment
and economic growth, resulting in a weaker outlook for population growth.
However, residential building activity has continued to grow and new dwelling
completions are estimated to have pushed above the underlying demand for
dwellings in 2014/15 for the first time since 2011.
Based
on BIS Shrapnel assumptions about household formation per thousand head of
population, the Building in Australia
2015-2030 report estimates the national dwelling stock deficiency reached a
peak of around 108,000 dwellings by June 2014.
After
a strong 2014/15 this has slipped back to approximately 85,000 as at June 2015.
“After
a sustained period of underbuilding, new dwelling supply is now exceeding demand,”
Hawtrey explains. “With investors and upgrader/downsizers providing enough
momentum to sustain activity at historically strong levels, we estimate that
the national deficiency will have been largely satisfied by 2018, although the
outlook will vary significantly between markets.”
Importantly,
the research shows that despite reaching its peak in 2014/15, new dwelling
starts will continue to track at historically high levels over the coming
years. Low interest rates will continue to support demand, with investors and upgrader/downsizers
expected to remain the driving force across the national market.
“While
we are forecasting a fall in activity from its current peak, this will mostly
be felt in the higher density segment of the market,” Hawtrey says. “After
climbing to nearly 100,000 starts, there will be an inevitable adjustment in
the other dwellings sector as they move back to more sustainable levels.
Detached houses – the late bloomer in this cycle – will prove more resilient,
holding up in 2015/16 before beginning a more subdued decline beyond that.”
Residential building
outlook
According
to the report, housing starts are estimated to have grown by 16 per cent in
2014/15 to reach a record high of 210,000. The stellar result was underpinned
by 24 per cent growth in the other dwellings sector, which is estimated to have
peaked at 95,500, while detached houses delivered a solid
result of 114,600 new starts.
From
this level, BIS Shrapnel expects to see activity begin to fall in 2015/16 (-5
per cent) as pressure is gradually alleviated in some markets. The decline will
be led by the other dwellings sector as it falls back from its unsustainable
high, while detached house starts will remain flat. Affordability concerns will
begin to emerge in the key Sydney and Melbourne markets, which will limit
demand despite interest rates remaining at record-low levels.
New
South Wales, Victoria and Queensland led the way in 2014/15, but only New South
Wales is expected to maintain growth into 2015/16 off the back of a strengthening
economy and a persistent deficiency of dwellings. Queensland will remain relatively
flat around a strong level as its market moves towards balance, while Victoria
will experience the most significant reversal of the three eastern states (-7
per cent). Off such a sustained period of strength, Victoria has been
over-building relative to demand and is estimated to see areas of the Melbourne
market move into oversupply.
Western
Australia will experience the sharpest decline of the five major states (-13 per
cent) as its economy slows in the wake of the mining boom and population growth
softens sharply. This will see a significant stock deficiency quickly
evaporate, and with vastly reduced pressure in housing demand in the key Perth
market, subsequently building activity will soften considerably.
Over the medium term, activity will slow
steadily to 163,800 new starts in 2017/18, with modest increases in interest
rates in late-2016 combining with softening pressure in key markets to limit
new development. From this level a new, more modest upturn will begin as rates
are cut once more and population growth begins to pick up.
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Aussies think stamp duty is “most unfair tax”
Aussies think stamp duty is “most unfair tax”
Posted on Monday, July 13 2015 at 11:57 AM
According to new research, there has been a significant shift in community attitudes toward tax reform in Australia. Stamp duty on property purchases ranks as the least fair and most punitive, with a majority of Australians wanting it abolished and strong support for increasing GST to retire stamp duty. In contrast, GST is considered the fairest of all current taxes.
A report from Newgate
Research, Community Attitudes Towards Tax Reform, commissioned by the
Property Council of Australia, finds that nine out of 10 Australians surveyed
support tax reform that makes the system simpler and fairer.
Almost three quarters (72
per cent) of Aussies believe it’s inevitable that GST will rise over the next
decade, while only two per cent believe it definitely won’t.
Most believe the GST is a
fair tax because it’s one that can’t be dodged.
Stamp duty, on the other
hand, is considered the most unfair tax, with most Australians agreeing that it’s
now a major barrier to buying a home.
More than two-thirds (68 per
cent) of Australians have been personally affected by stamp duty and it has
made it harder for around half (54 per cent) to afford a home.
The research also reveals that
housing affordability ranks as a key concern, with 86 per cent of those
surveyed claiming they’re concerned about housing affordability to some degree and
nearly two thirds (63 per cent) either “extremely concerned” or “very
concerned”. Seventy per cent believe it is “extremely” or “very important” for
the government to take action on this issue.
Three-quarters of
Australians also agree that stamp duty is driving up home prices and making it
unaffordable for young people to own their own home. More than two thirds of
the community support the idea of abolishing stamp duty.
Reducing the level of tax on
people’s homes is considered a higher priority than reducing the rate of
personal income tax.
Almost half (47 per cent) of
Australians support abolishing stamp duty in exchange for removing current GST
exemptions: a further 21 per cent are undecided and only 32 per cent oppose
this reform proposal.
A similar proportion (46 per
cent) support abolishing stamp duty in exchange for keeping GST exemptions in
place and increasing the GST to 12.5 per cent: 22 per cent are undecided on
this and 32 per cent oppose it.
Property Council chief executive
Ken Morrison says the research shows Australians support fair reforms to the
tax system.
“Broadening or increasing
the rate of GST has long been considered political poison, but that no longer
reflects the attitude of the community,” Morrison says.
“Australians clearly
understand the need for tax reform and as the research makes clear, they want a
tax system that is fairer and simpler.
“Changes to the GST need to
be taken out of the too-hard basket.
“Governments know stamp
duty distorts the economy, hurts housing affordability and is a rollercoaster
source of revenue.
“National tax reform
needs to replace our most distortionary taxes with more efficient revenue
sources.”
(The research is based on
the answers of 1,957 respondents surveyed nationwide in May and June 2015.)
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SA unemployment rate sounds alarm bells
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SA unemployment rate sounds alarm bells
Posted on Friday, July 10 2015 at 3:02 PM
The peak body for Australia’s $680 billion property industry says it’s time to get serious about creating “the best state to do business” in South Australia.
Australian
Bureau of Statistics (ABS) data released yesterday reveals that South
Australia’s unemployment rate has hit 7.8 per cent in trend terms or 8.2 per
cent in seasonally adjusted terms.
SA
executive director of the Property Council Daniel Gannon says this month’s
unemployment figures are startling and should be a call to action for the state
government.
“We
need to get serious about implementing the Premier’s vision as ‘the best place
to do business’,” he says. “That involves cutting red tape and creating a
taxation and business environment that’s internationally competitive.
“We
shouldn’t lose sight of the fact that South Australia is in competition with
the world when it comes to attracting investment.
“South
Australian businesses struggle with antiquated shop trading regulation, high
land tax rates, high penalty rates and a sluggish local government-based
planning system,” Gannon says.
“We
need lower costs associated with owning and developing land in South Australia,
cheaper utilities and regulation that doesn’t get in the way of creating jobs.
“We
need to create compelling reasons for interstate and international businesses
to invest here, and give young job-seeking South Australians a reason to not
increase our brain drain exodus.
“That’s
why last month’s announcement to phase out stamp duty on non-residential
property transfers was strongly endorsed by the property sector. Following [this]
jobs data, there is a strong case to fast-track this policy to create an
immediate incentive to invest.
“We
also need to think about infrastructure as a jobs driver. The state government
just released its Integrated Transport
and Land Use plan; however, funding hasn’t been locked in for initiatives
like extending the tram line.
“Let’s
create a plan for moving forward with public-private partnerships on
infrastructure. There are models out there globally, like the UK’s City Deals
infrastructure policy, that have some lessons for policymakers here in our
state.
“The
jurisdictions with the most competitive tax environments and the most liveable
cities will win the contest for skilled immigration and investment globally.
“With
more job losses on the horizon, the property sector has concerns for our
industry’s workforce – a workforce that accounts for 168,000 jobs and generates
almost 26 per cent of wages and salaries paid to South Australians.”
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