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Confidence in Queensland’s property sector falls for first time in nearly 2 years

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Confidence in Queensland’s property sector falls for first time in nearly 2 years

CONFIDENCE in Queensland’s property sector has fallen for the first time in nearly two years on the back of the latest tax grab proposed by the state government, a new survey reveals.

CONFIDENCE in Queensland’s property market has fallen for the first time in nearly two years on the back of the latest tax grab proposed by the state government.

The ANZ/Property Council Survey released today, taken in the weeks either side of the November state election, has recorded a drop of two index points for Queensland in the March 2018 quarter — the first decline in 20 months.

The state now has the lowest confidence levels of all Australian jurisdictions.

The re-elected Palaszczuk Government has announced plans to increase land tax rates by 2.5 per cent on properties worth more than $10 million and more than double the tax rate for foreign investors from 3 to 7 per cent.

Property Council Queensland executive director Chris Mountford said the results confirmed industry concern about the proposed property tax hikes, which he argued would hurt jobs growth and home values.

“At a time when we need to do more to catch up with other markets, increasing taxes on property is a big economic risk,” Mr Mountford said.

“The impact of these proposed tax increases can already be seen in the figures.

“Forward work schedules, staffing level expectations, and Queensland’s economic growth predictions are all down.”

The ANZ/Property Council Survey Queensland results for the March quarter of 2018.Source: The Courier-Mail

The ANZ/Property Council Survey Queensland results for the March quarter of 2018.Source: The Courier-Mail

The Property Council is urging the Government to reverse the proposed tax increases, saying ordinary Queenslanders would pay the price because businesses would be forced to pass on the cost to consumers.

“The proposed land tax hike is ultimately going to flow through to affect capital values, and impose higher rents and costs on businesses,” he said.

“I think there’s a general lack of understanding that foreign buyers are a key ingredient to getting new housing construction starts going.

“If we’re making it harder for those people to invest in Queensland, ultimately that’s going to flow through to lower levels of activity.”

The latest ANZ/Property Council Survey shows a drop in confidence in the Queensland property industry. Photo: Glenn Hunt/Getty Images. Source: Getty Images

The latest ANZ/Property Council Survey shows a drop in confidence in the Queensland property industry. Photo: Glenn Hunt/Getty Images. Source: Getty Images

For the last two years, Queensland has consistently lagged behind the major states when it comes to confidence, only remaining in front of Western Australia, where the end of the resources boom created significant economic challenges.

But the latest survey shows a surge in confidence in WA.

“Clearly confidence is starting to return to the WA market,” Mr Mountford said.

“They’ve turned a corner and yet we haven’t had that sentiment shift.

“If anything, we’re still bumbling along behind the other states.”

New homes under construction in Mango Hill, north of Brisbane. The latest ANZ/Property Council Survey shows a drop in confidence in the Queensland property industry. Image: AAP/Dan Peled. Source: AAP

New homes under construction in Mango Hill, north of Brisbane. The latest ANZ/Property Council Survey shows a drop in confidence in the Queensland property industry. Image: AAP/Dan Peled. Source: AAP

But ANZ senior economist Daniel Gradwell said that he was not too concerned about the confidence drop in Queensland during the quarter,

“Overall sentiment is still sitting at pretty solid levels, even though it has dropped off recently,” Mr Gradwell said.

“I think it’s fair to say Queensland has essentially moved past its mining-related downturn.

“We’re starting to see economic activity improve, particularly across the labour market with unemployment at its lowest level in about four years.

“So confidence is already translating into actual economic activity.”

The latest ANZ/Property Council Survey shows a drop in confidence in the Queensland property industry. Photo: Glenn Hunt/Getty Images.Source: Getty Images

The latest ANZ/Property Council Survey shows a drop in confidence in the Queensland property industry. Photo: Glenn Hunt/Getty Images.Source: Getty Images

St George Economics noted in its latest economic outlook for Queensland that the state’s economic growth had picked up over the past year, with business investment gaining momentum, commercial construction strengthening and robust employment growth.

Nationally, the survey reveals New South Wales has lost its throne to Victoria as the property industry with the strongest outlook.

It gathered responses from 1374 professionals within the residential and commercial property sector.

“It’s a large sample size, so we’re confident it’s reflective of what’s actually happening on the ground,” Mr Gradwell said.

Originally published: www.news.com.au

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Opinion

Why Brisbane property is set for great capital growth

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Why Brisbane property is set for great capital growth

Over the last 10 years, Brisbane has suffered the GFC and floods. As a result, prices are now extremely affordable for a capital city. The Brisbane market has some of the best growth prospects nationwide, so let’s explore why this market is set to take the gold medal for capital growth.

Increasing population

Since the GFC, net migration levels have been very poor for Queensland. However, net interstate migration to Queensland has tripled over the last three years. Interstate migration to Queensland fell to a low of 5,753 in 2014, increasing to 11,581 in 2016 and 15,716 in 2017.

The majority of these people are moving from Brisbane, the Sunshine Coast and the Gold Coast. This increase in migration levels is due to housing affordability compared to other states, improving employment markets and the lifestyle factors that come with those two factors.

Infrastructure

There is a surge of major development and infrastructure projects currently underway in Brisbane, to the sum of $12 billion.

Examples of these major projects are:

  • Queens Wharf ($3 billion) – Comprising of 1,000 hotel rooms across five hotels, a residential precinct of 2,000 units, a 100-metre sky deck, 50 bars and restaurants and a pedestrian bridge connection to Southbank. This will completely reshape the Brisbane’s river CBD precinct.
  • Cross River Rail ($5.4 billion) – The project will deliver a 10.2-kilometre rail link from Dutton Park to Bowen Hills, with 5.9 kilometres of tunnel under the Brisbane River and CBD, connecting to both northern and southern rail networks in and out of the CBD.
  • Brisbane Quarter ($1 billion) – This project is a mixed-use precinct incorporating office, retail, hotel and residential uses.
  • Brisbane Live ($2 billion) – A new entertainment precinct located on top of the Roma Street rail interchange hub. Facilities include a $450 million, 17,000-seat arena along with multiplex cinemas, an amphitheatre and proposed commercial, residential and hotel towers.

Jobs growth

Last year was one of the strongest years for job growth in Brisbane’s history. In the last 12 months, Brisbane’s jobs growth has increased by 7.6 per cent. As a result, unemployment has fallen across the board to 5.5 per cent.

Recent jobs growth has been driven by Queensland’s service industries. While the resources sector has cut 22,000 jobs over the past two years, four other industries each created more jobs than were lost in the resource sector over that period: health, education, professional services and accommodation and food services (which is closely related to tourism).

Affordability

The median dwelling across Brisbane cost 6.3 times higher than the median household income. As a comparison, Sydneywas ranked the second worst most unaffordable market in the world. House prices are a whopping 13 times higher than the median household income.

These factors are significant for Brisbane’s capital growth prospects over the coming years. Well-located houses (not units) are expected to be some of the best preforming sub-markets in Australian real estate.

Where else but Queensland!

Source: www.smartpropertyinvestment.com.au

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Opinion

Brisbane’s Ferny Grove Village sells for $16.2 million

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Brisbane's Ferny Grove Village sells for $16.2 million Read more: http://www.afr.com/real-estate/brisbanes-ferny-grove-village-sells-for-162-million-20180422-h0z3wp#ixzz5E7ke1wiD Follow us: @FinancialReview on Twitter | financialreview on Facebook

The Ferny Grove Village shopping centre in Brisbane’s western suburbs has changed hands for $16.2 million. Supplied

Village shopping centre in Brisbane’s western suburbs has changed hands for $16.2 million.
WA-based syndicator Kerching Capital secured the 4408sq m neighbourhood shopping centre at 51 Mcginn Road, Ferny Grove through CBRE’s Michael Hedger and Joe Tynan.

It is anchored by a 2539sq m Coles supermarket and also has 19 specialty retailers.

Rich church

A local Catholic Church group has snapped up former laboratory property on a substantial site of just over 3 hectares in south Canberra for $3.81 million.

The property at 150 Narrabundah Lane, in the semi-rural suburb of Symonston, initially accommodated the Therapeutic Goods Administration, before being refurbished for its most recent use as an IT data facility.

The purpose-built 1271sq m building is 10 kilometres from the Canberra CBD.

CBRE’s Adrian Woolgar and Michael Heather managed the sale.

Private investor deals

Private investors traded a retail investment leased to a restaurant and a karaoke lounge at 301 Clayton Road in Clayton, Melbourne, for $1.385 million.

Investors fought it out before it sold at a net yield of 4.4 per cent.

Allard Shelton’s James Gregson, Michael Ryan and Martin Huang handled inquiries.

Private investors also traded a service centre and retail property leased to Caltex Woolworths 122-134 Boundary Road in Melbourne’s Braeside for $4.15 million.

Colliers International’s Raphael Favas and Daniel Wolman negotiated the sale of the 2795sq m property.

A local investor paid just over $3 million for a shop at 321 La Trobe Street in the Melbourne CBD at a yield of 4.28 per cent.

The 108sq m property is leased to Japanese restaurant Ikkoryu Fukuoka Ramen.

CBRE’s Max Ruttner, Alex Brierley and JJ Heng marketed the property.

Investor deals continue in WA

Private owners have exchanged a newly completed medical centre at 373 Warnbro Sound Avenue, Port Kennedy in WA for $2.9 million at a 6.22 per cent yield.

Vend Property’s Jeff Klopper sold the architecturally designed, one-storey building for a private owner.

Industrial strata sell-off

Spanos Family Investments has offloaded a 280sq m industrial strata unit at 8/23-31 Bowden Street, Alexandria in Sydney’s south for $1.765 million.

Spectre Management NSW bought the property through JLL’s Tom Reesby, Charlie McKenzie and Edward Washer.

Chester Hill unit

An owner-occupier Dalou Pty Ltd has purchased a 2080sq m industrial facility at Unit 1, 171 Orchard Road, Chester Hill in Sydney’s west for $2.35 million.

Danalir Computer Services sold the property with vacant possession.

The front unit in a complex of five offers a 4.5m to 7m internal warehouse clearance, two roller doors, dual drive-through access, rear hardstand and truck manoeuvreability.

Knight Frank’s Nick Trencevski and John Swanson acted on the deal.

Small but big deal

The property partly leased to the Biggie Smalls eatery at 86 Smith Street, Collingwood, in Melbourne has sold for $3.58 million on a yield of 3.51 per cent.

The refurbished, three-level 267sq m building also has basement levels and a first-floor office.

Fitzroys’ Chris Kombi and Terence Yeh sold it to a foreign investor.

Student accommodation up for grabs

A block of 14 student accommodation studios opposite Deakin University’s Burwood Campus has sold for $3.105 million at auction.

A foreign investor bought the 216 Burwood Highway property at a yield of 4.2 per cent in a first foray into Australia.

CBRE Melbourne’s Mark Wizel, Nathan Mufale, Dylan Kilner and Leon Ma executed an international marketing campaign.

Developer flip

A Chinese developer has purchased a permit-approved 1337sq m development site in Doncaster in Melbourne’s east for $3.775 million.

The auction of 26 and 28 Bordeaux Street attracted 120 inquiries. It can yield 10 large townhouses close to the Westfield Doncaster Shopping Centre.

It was flipped by another developer and marketed by Savills’ Benson Zhou, Julian Heatherich and Dorothy He.

Source: www.afr.com

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Opinion

Property tax hikes will hit economy hard

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Property tax hikes will hit economy hard

The state government’s planned property tax increases risk wiping the state off the global investment map, warns Chris Mountford,
executive director of Property Council Queensland.Kevin Farmer

THE state government’s planned property tax increases, due to come into effect on July 1, risk wiping the state off the global investment map.
As the government begins work on the State Budget, the Property Council is ramping up efforts to highlight the hidden effects of the tax hikes.

These tax hikes will increase the cost of doing business, damage Queensland’s economic competitiveness and impact on every Queenslander.

With Queensland preparing to leverage the Commonwealth Games to attract new investment opportunities, these tax increases couldn’t come at a worse time.

Election campaign costings, released in the days prior to the November 2017 state election, revealed the government’s intention to introduce new land tax thresholds for aggregated land holdings with an unimproved value above $10 million.

Individuals, companies and trusts who are within this new threshold will be subjected to a 25% increase in the rate of land tax from July 1.

The government has also committed to increasing the stamp duty surcharge on foreign buyers of residential property from 3% to 7%.

The end result of this decision will be higher business rents, higher costs for new homes and damage to Queensland’s reputation as an investment destination.

Businesses who lease premises from larger landlords can expect additional rental and occupancy costs.

New homebuyers can expect an additional $800-$1000 added to the cost of purchasing a new home.

We once were able to lure investment from interstate and overseas with attractive tax rates, but we now find ourselves uncompetitive with our southern neighbours.

The Property Council is calling for the government to abandon the tax increases and commit to review and modernise Queensland’s property tax framework.

Our current land tax thresholds haven’t been changed in a decade, leading to significant bracket creep as property values have increased dramatically.

We need a simpler, fairer and more attractive property tax system to unlock investment and create jobs.

An all-encompassing review of Queensland’s outdated thresholds and property tax rates needs to be undertaken to put Queensland back on the investment map.

Chris Mountford is executive director of Property Council Queensland.

Source: www.sunshinecoastdaily.com.au

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