Buyers are putting off entering the property market due to fears about what the Federal Budget may hold.
According to the annual QBE Australia report into mortgage and property market sentiment and behaviour, three in five respondents who intended to buy property said they would hold off until they could see the impact of the federal budget.
First home buyers were even more reticent, according to the report.
The survey was conducted toward the end of June by GfK Australia.
It found the appetite for residential property was still strong with more people wanting to buy in the next five years compared to the same time last year.
But there has been a significant drop in the number of people who think the timing is right to buy in the next year.
More than half of those surveyed thought property was overpriced and many were also worried that foreign investment would drive up prices further.
First homebuyer activity has hit near record lows and more than two thirds of respondents worried they may never be able to afford their own home.
Original article published at www.news.com.au by Michelle Hele, Real Estate On Line Editor, News Corp Australia
Queensland Budget 2018: What it Means for the Property Industry
This year’s budget focused on infrastructure, tourism and mining funding.
Property investors will also be met with a 0.5 per cent increase in the land tax rate for aggregated holdings above $10 million, as well as an increase in the additional foreign acquirer duty from 3 per cent to 7 per cent.
The government also announced it will cut back the first home owners’ grant.
So what does the state budget mean for the property industry?
Here is what you need to know.
Additional Foreign Acquirer Duty
Aligning with states nationwide, the Queensland government announced an increased rate for additional foreign acquirer duty.
The AFAD is an additional tax on relevant transactions that are liable for transfer duty, landholder duty or corporate trustee duty which involve a foreign person directly or indirectly acquiring certain types of residential land in Queensland by foreign persons.
The duty will rise from 3 per cent to 7 per cent and is forecasted to result in an increased revenue of $33 million per annum.
The state government will dedicate $4.217 billion to transport and roads.
The Sunshine State’s long-awaited duplication of the Sunshine Coast rail line received $161 million.
The Toowoomba Second Range Crossing project received $543.3 million, a route to the north of Toowoomba from Helidon to the Gore Highway.
Brisbane’s Cross River Rail received $733 million to go toward the $5.4 billion project. The federal government failed to pledge any assistance towards the Cross River Rail project earlier this year leaving the state government to foot the bill.
There’s also $487 million over four years for upgrades to the M1 on Brisbane’s south and on the Gold Coast.
First Home Buyers Grant Slashed
First home buyers have come to expect a $20,000 starter grant since 2016 will now see it cut to $15,000 if they buy a house from July onwards.
The $5,000 boost had been added to the grant in 2016 by former Treasurer Curtis Pitt, with the measure supposed to be in place for just one year.
It was extended twice in six-months until the end of 2017 and then to June of this year.
Land Tax Increase
Under the new taxes introduced in Tuesday’s budget, foreign landowners with more than $10 million worth of landholdings will now be in line for a 0.5 per cent increased rate of land tax.
Individuals with properties worth more than $10 million will now incur an additional rate of 2.25 per cent (or 2.5% for trusts or companies) for every dollar of taxable value over $10 million.
This is expected to bring in $71 million in revenue in its first year, with a projected 11 per cent increase in 2018-19 land tax revenue.
Ipswich’s top 5 growth hotspots
REDBANK Plains has again topped the council’s list for the fastest growing suburb in Ipswich.
According to Ipswich City Council’s latest Planning and Development report 21,520 people now call Redbank Plains home.
In just three months, between December and March, 354 new residents moved in, the report states.
Spring Mountain, South Ripley, Collingwood Park and Bellbird Park were the next fastest growing.
Last year, 640 new homes were built in the Redbank Plains, 421 new lots were created and 346 more were approved for construction.
A new $20million food precinct, including US giants Krispy Kreme and Carl’s Jnr opened in December along Redbank Plains Rd.
In 2016, the Town Square shopping centre underwent a major $75 million expansion, adding 50 new retail tenancies, the new Pig and Whistle pub and created more than 1300 new carparks.
In February last year, the shopping centre sold to Singaporean real estate investment manager Rockworth Capital Partners for a whopping $160 million.
Ipswich City Council invested $85 million in the upgrade of Redbank Plains Rd to cater for population growth, recognising the demand for travel would continue to increase along what has become one of the most important roads for the economic prosperity for the city.
A new Catholic primary school is also due to open in Redbank Plains in 2020.
Top 5 Ipswich growth suburbs
- Population: 21,520
- Increase: 354
- Population: 300
- Increase: 182
- Population: 2,187
- Increase: 154
- Population: 7,598
- Increase: 143
- Population: 7,718
- Increase: 135
Foreign investment in Australia’s housing market collapses: FIRB
The FIRB has revealed a fall in foreign investment in new apartments in Australia.Source:Supplied
FOREIGN investment in Australia’s housing market has fallen, amid waning investor appetite and tighter lending standards.
OFFICIAL data has confirmed a collapse in approvals for foreign investment in Australia’s housing market, amid waning investor appetite, higher charges and tighter lending standards.
The Foreign Investment Review Board’s annual report reveals a 67 per cent fall in residential real estate approvals last financial year — down from 40,149 approvals to 13,198.
The value of FIRB approvals also plunged, from $72.4 billion to $25.2 billion in fiscal 2017.
The report reveals 18 per cent of approvals to foreigners were for residential real estate in Queensland in 2016-17.
Victoria and New South Wales remained the favourite destination for investment, accounting for nearly three-quarters of all approvals granted.
The FIRB said a significant factor contributing to the reduction in approvals was the introduction of application fees from December 2015.
“The introduction of fees resulted in investors only applying for properties they intend to purchase,” the report said
“Prior to the introduction of fees, individuals often made several applications earlier in the process when considering multiple properties, even though they might have only ended up purchasing a single property.
“This suggests that the resulting reduction in approvals may not imply a corresponding a reduction in actual investment in residential real estate. That is, the actual decline is likely to be lower than implied by the data.”
Along with the introduction of state-based taxes on foreign investors, the FIRB said weaker demand from China was another factor behind the decline in approvals granted.
Investment in new apartments from mainland Chinese investors dropped significantly in 2016-17.
AllenWargent Property Buyers chief executive Pete Wargent said the figures would have some significant impacts on the new apartment sector, construction trends, and the broader economy — especially in Sydney.
Mr Wargent said he expected Sydney to experience the greatest number of failed apartment projects, with increasing signs of discounting on new apartments.
“Perhaps this was an inevitable end-game for this cycle, where development has been too much skewed towards apartments for investors, and too little towards the types of medium-density dwellings that people want to reside in,” he wrote in his blog.
But Chinese international real estate website Juwai.com chief executive Carrie Law played down the reported decline in Chinese demand.
Ms Law said that in the second half of 2016, Chinese buyers were investing in Australian real estate at an almost irrational pace.
“It was like money falling from heaven for vendors and developers,” Ms Law said.
“In early 2017, capital controls, financing restrictions, and foreign buyer taxes reduced Chinese investment to more reasonable levels.
“Since November 2017, we seem to have entered a period of more sustainable long-term growth.”
Ms Law said Chinese buying enquiries for Australian property in March were 5.7 per cent higher than the month before and in April they were 22.3 per cent higher.
“Unfortunately, this year’s FIRB data is not directly comparable to that of prior years, due the change in regulations and buyer behavior,” she said.
“The big declines are partly due to lower demand, and mostly due to the changed application fees.”