Budget blow to real estate market
REAL estate investment has made millions of Australians richer, but many are today wondering whether it’s still worth the effort.
This week’s Federal Budget crackdown on two key residential property tax deductions is the latest in a series of attacks to cause alarm among the nation’s three million real estate investors.
Sharp rises in interest rates, tougher regulations, and warnings of looming price falls have made property investing more expensive and murkier.
With most of the measures designed to tackle problems faced by Sydney and Melbourne markets, industry professionals outside the capitals have been left in uproar with the Budget believed to be shortsighted in its support to struggling regional markets.
Real Estate Institute of Queensland Townsville Zone chair Damien Keyes said the Budget offered limited help to North Queensland’s housing market.
“Treasurer Scott Morrison announced measures to limit investor activity and this is disappointing. In particular, we’re disappointed that the Government has limited the allowable deductions for investors, especially around travel benefits,” he said.
“We’re concerned this may discourage investors from considering regional Queensland as an investment opportunity.
“Townsville welcomes all investors and all property buyers, regardless of where they come from and to have our Federal Government actively dampening the potential opportunities is frustrating.”
BMT Tax Depreciation CEO Bradley Beer said Budget changes made buying second- hand properties less attractive.
“If you buy a house from someone and it’s three months old, you won’t get to claim on your three- month- old stove or carpet, and that’s not right,” he said.
“This discourages people from buying a second- hand property. It hinders the concept of capital growth if you have property investors leave the market.”
Canstar group executive of financial services Steve Mickenbecker said the Budget changes would cost investors money but were “at the smaller end of the equation in terms of whether property investment works or not”.
“The big deal is that negative gearing is still in place,” he said.
• Don’t miss Damien Keyes’ column on how the budget will impact Townsville in today’s Realestate Guide.