Queensland Says No New Taxes on Foreign Property Buyers in Bjelke Petersen-like Strategy
The Queensland government has ruled out introducing new taxes on foreign buyers of residential real estate.
They are the only state that actually monitors foreign investment, so were in the box seat to implement such a tax regime.
The rejection comes after the populist Victoria Labor government’s recent budget unveiled a new tax regime that will seek to tax foreign buyers and foreign owners.
Queensland has vowed not to follow Victoria’s lead and introduce any new taxes on foreign property investors.
Treasurer Curtis Pitt said Queensland welcomed foreign property investment.
“We’re ruling out any stamp duty surcharges for foreign investors who purchase a house in Queensland,” said Pitt.
“We’re also ruling out any land tax surcharge for foreign investors in this state.”
The Victorian state budget, revealed on Tuesday, included a 3%t stamp duty surcharge for homes from July and land tax increases of 0.5% from 2016 for offshore-based investors.
News Ltd reported Queensland executive director of the Property Council, Chris Mountford saying the action will strengthen Queensland’s position on the global investment map.
“In particular it creates a compelling case to invest in Queensland over Victoria.”
Nothing new for Queensland as that was how former premier Joh Bjelke Petersen saw the state into an upswing when Queensland didn’t have death duties like other states.
It was in 1977 when the Premier of Queensland Joh Bjelke Petersen abolished death duties and a wave of Australia’s elderly headed towards the Gold Coast with the high rise following as dying in Queensland became a tax avoidance scheme and Surfers Paradise became a retirement haven.
By JONATHAN CHANCELLOR via propertyobserver.com.au
There are fewer homes for rent in Brisbane than a month ago, new figures show. Picture: Thinkstock.Source:ThinkStock
THE number of properties available for rent in Brisbane is shrinking, but it still has the second highest residential vacancy rate of any capital city in the nation.
Data released by SQM Research reveals the Queensland capital’s vacancy rate slipped to 3.2 per cent in March, with 10,246 properties available for rent — down from 3.4 per cent in February.
But the Brisbane rental market is not nearly as tight as some other capital cities, with Hobart and Canberra both sitting on a vacancy rate of just 0.6 per cent.
Brisbane’s vacancy rate slipped to 3.2 per cent in March, according to SQM Research.Source:Supplied
Only Darwin has a higher vacancy rate at 3.6 per cent.
SQM Research managing director Louis Christopher said asking rents were also rising in some capitals, particularly in Melbourne.
“Reflecting the tight rental conditions in Melbourne, asking rents for houses were up by 1.1 per cent over the month to 12 April 2018, while asking rents rose 4.7 per cent over the year,” Mr Christopher said.
“We can expect continued strong growth given the high population growth that Melbourne is currently experiencing, creating rental demand.”
Rental vacancy rates fell nationally in March, new research shows.Source:News Limited
But in Sydney, the vacancy rate is higher than it was a year ago and asking rents are falling as a result.
Capital city asking rents rose by half a per cent nationally last month to $563 a week for houses.
Unit asking rents rose 0.2 per cent to $443 a week.
The asking rent for a three-bedroom house in Brisbane remains at $447 a week, while for units it stands at $366 — the same as a month ago.
The average weekly asking rent for a unit in a capital city in Australia is $443. Photo: AFP/Greg Wood.Source:AFP
Think you’re paying a lot in rent? If you’re in Brisbane, chances are you’re paying less than those living on the Gold Coast, Sunshine Coast and even Redland.
New figures from the Domain Group’s March quarter Rental Report show Brisbane is one of the cheapest capital cities to rent in the entire country, beaten only by Adelaide and Perth, while rising rents in other parts of south-east Queensland have well and truly outstripped Brisbane’s lacklustre rental market.
In the Brisbane LGA, rents have remained flat the entire past 12 months. The median asking rent for houses is still $450 a week, with no yearly or quarterly change. Units have also remained flat over the March quarter, at $390 a week, dropping only slightly by $5 a week since the same time last year.
Units in the Redland LGA are attracting higher rents than those in Brisbane, according to the new Domain report. Photo: Reinhard Dirscherl / Alamy
Meanwhile, on the Gold Coast, the median asking price for a rental house has risen by 6.5 per cent over the past year to hit $490 a week – that’s $30 a week more than this time last year.
Unit rentals have also gone up on the glitter strip by nearly 5 per cent to $430 a week, making the Gold Coast the most expensive region to rent a property in south-east Queensland.
Houses on the Sunshine Coast have a median asking rent of $490 a week, while units in Redland are asking $400 a week. In Ipswich, house rents have increased by 2.9 per cent and units by 3.7 per cent over the past year.
Units and houses on the Gold Coast have the highest weekly median rent asking prices of any of the south-east Queensland LGAs.
But the news isn’t all bad for Brisbane. Stagnated rents were a welcome relief from the ever-increasing cost of living, according to national research manager at PRDnationwide, Dr Diaswati Mardiasmo.
“While these figures may not look particularly exciting, the thing that stands out for me is how affordable Brisbane is,” Dr Mardiasmo said.
“The cost of living is continually going up – rises in electricity, rises in rates, rises in water bills and private health – so to hear that your rent is staying the same will be a relief to so many tenants.”
WEEKLY MEDIAN ASKING RENTS (HOUSES)
And tenants who are not stretched financially are far more stable, which benefits landlords too, she said.
“I’m looking at it from the perspective of the renter who can have that stability and affordability but you know, this lack of price increase also benefits landlords,” she said.
“When rents don’t go up, tenants stay where they are. When rents go up, often they’re forced to move out because they can’t afford to pay more. When that happens, often the landlord is left with a vacant property before they can find a new tenant, which is a lot worse.”
Amid the widely publicised unit oversupply and falling unit prices, rental yields have held strong.
Brisbane unit yields sit at 5.06 per cent after strengthening by 2.8 per cent over the March quarter. Yields are also up 1.3 per cent year-on-year.
“When you consider the fear of oversupply and the vacancy rate, these figures are actually quite heartening,” Dr Mardiasmo said.
“There’s been a lot of negative commentary surrounding the unit market in particular, so from an investors point of view, the fact that yields are holding well is comforting.
MEDIAN WEEKLY ASKING RENT (UNITS)
REIQ zone chairman Andrew Henderson conceded the Gold Coast was fast becoming a difficult market to break into, for tenants and buyers alike.
“What’s changed recently is the buyers. We used to have 50-50 owner-occupiers and investors but these days 80 per cent of our buyers are owner-occupiers,” he said.
“What that means is that properties that used to be rentals are now being bought by owner-occupiers; the pool of rentals is shrinking.
“At the same time, you’ve got strong migration, so the demand for rentals is increasing. It’s super competitive for applications. And of course, as the cost of renting increases, it’s harder to save to buy a property.”
Dr Mardiasmo said that overall, the Brisbane rental market was “where it should be”.
“I would say to people in Brisbane: look around you. There are other capital cities where people have to commute for an hour-and-a-half just to get to their workplace.
“In Brisbane you only need to live 15 to 20 minutes out to be able to afford a place and still be able to live. We don’t need to wish for figures that make headlines, our situation right now is quite nice.”
It will take a large shift in Brisbane’s housing market if investors are to see any increase in rents in the near future, experts say.
It comes as the latest Domain Rental Report shows rents were flat in Brisbane over the December quarter.
The median asking rent for houses is still $400 a week, with no yearly or quarterly change. Units rents are now slightly weaker, at $370 a week, down from the same time last year, when landlords were asking $375.
An influx of new apartments is keeping down median rents, says property manager Haesley Cush. Photo: Tammy Law
Domain data scientist Nicola Powell said stagnated rent had been the norm in Brisbane for five years or more. Dr Powell didn’t expect that to change any time soon.
“I think it will take a large shift in the market. These tighter lending conditions will make it harder for investors to get finance,” she said. “It will take a while to see an output in terms of increased rents.”
Dr Powell said housing stock was tightening, but not enough to counteract the recent influx of apartments.
“We’re already seeing the advertised stock in the greater Brisbane area decline and that is for houses and for units,” she said. “In the unit market they’re still impacted by oversupply.”
Partner at Living Here property management Haesley Cush said the news came as little surprise.
“The last 12 months has seen a number of new accommodation precincts come out of the ground. What that does is drag down the median price,” he said. “They’ve offered huge incentives and it’s left mum and dad investors unable to compete.”
Mr Cush said until landlords were financially pushed into a corner, they wouldn’t be too concerned about the flat rents. “They’ve been a little more accepting of lower rents and may not be expecting year-on-year growth,” he said. “At the moment it’s easier for a decrease to happen in the market, because of the low interest rates.
“But if there was a rise in interest rates, landlords would be more bullish.”
Dr Powell said that it wasn’t all bad news for Brisbane though. Despite flat prices and declining yields for both houses and units (down 0.3 per cent and 0.2 per cent, respectively), she said the river city still had the benefit of the third-highest yields in the country.