“Get in early” the founder and publisher of The Urban Developer said.
With an unprecedented amount of infrastructure projects currently underway, including Queen’s Wharf, Howard Smith Wharves and the Brisbane Airport duplication, Di Marco called upon the industry to look beyond the traditional media headlines and think about the longer-term prospects for the region.
“Invest for your children and grandchildren,” Adam told Sky News hosts, former Queensland Premiers Peter Beattie and Campbell Newman.
“You need to look at the scale of infrastructure projects currently underway and think about how these will impact the city and your investment.”
He cited a recent survey, undertaken by The Urban Developer, that captured the sentiment of the industry as evidence that the underlying attitudes towards development in the city were vastly different from what was reported in the traditional press.
With over 1,000 respondents, industry confidence was tracking at or above long-term averages.
“We have over two-thirds of the residential development sector reporting that they are either very optimistic or optimistic about the outlook for the sector.”
“For retail and commercial, the numbers are fairly similar” he said.
The prospects for the residential property market were also likely to be impacted by the scale of construction activity required to deliver these major projects.
“During construction alone, Echo’s Queen’s Wharf development will generate 2,000 jobs. After the project is completed in 2022, an additional 8,000 employees will be required to run the operation.”
According to Di Marco, these projects are unprecedented for the Queensland capital and will create a new wave of economic activity, tourism and investment.
“We’re on the cusp of something big.”
Originally Published: www.theurbandeveloper.com
Queensland is the next property hotspot, experts say
As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.
According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.
Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.
Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.
The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.
The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.
NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.
“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.
How much savvy QLD landlords negatively gear and what they claim on tax
MORE landlords in Queensland negatively gear their properties than in any other state. Here’s how savvy property investors can maximise their deductions at tax time.
PETER Button and Cathy Zappala are revelling in early retirement — and they have negative gearing to thank for it.
The Brisbane couple recently sold their eight investment properties, all located in and around the suburbs of Chermside and Wavell Heights, and put the money into their superannuation.
“We’re fortunate to be able to choose to retire now, and be able to travel and afford a house and not have any debt,” Mr Button, 62, said.
But the couple had to be sensible with money and savvy at tax time to get to that position.
“We put our necks on the line by getting ourselves $1 million worth of mortgages, so we were really careful to maintain good relationships with our tenants to keep them there and look after them,” Mr Button said.
Mr Button also made sure he maximised their deductions at tax time by keeping a record of all costs including legal bills, insurance, council rates, management fees, travel expenses and maintenance and repair costs.
All eight properties were negatively geared and the couple estimate they claimed around $7000 in expenses and up to $4000 in interest from each of them every year.
Mr Button also rotated fittings and fixtures in the properties every two to three years because he knew that by maintaining the properties, he could increase their sales value.
Almost seven out of 10 rental properties in Queensland are negatively geared, with landlords in the red claiming billions of dollars in expenses in their tax returns, according to data from the Australian Taxation Office analysed by comparison site finder.com.au.
In fact, more rental properties are negatively geared in the sunshine state than anywhere else in the country.
And those properties that still have a mortgage attached are deducting an average of $8,653 per year in interest on their home loans.
IS THIS BRISBANE’S MOST SOCIALLY RESPONSIBLE HOME?
Finder.com.au money expert Bessie Hassan said billions of dollars worth of tax could be saved through negative gearing, although claims differed between states and territories.
“Expenses like travel for landlords, gardening and lawn mowing can all be claimed by property investors,” Ms Hassan said.
“There are tax advantages of being negatively geared, and savvy investors are deducting thousands for cleaning, repairs, maintenance and even stationary.”
Ms Hassan said recent research into pivot loans, also known as ‘loan reducer’ home loans, suggested property investors were paying interest as low as 1.9 per cent on their personal owner occupier home loans by bundling with their investment properties.
“The perks for property investors in this country don’t stop at negative gearing, now landlords can even use their personal home loan to save on tax,” she said.
But housing tax policy has been a hot political issue as home prices reached sky-high levels in the east coast capital cities in recent years.
PENTHOUSE FETCHES MULTI-MILLION DOLLAR PRICE
The Australian Housing and Urban Research Institute is calling for a gradual phase-out of negative gearing tax concessions, saying it could save taxpayers more than $1.7 billion a year from the annual $3 billion cost of negative gearing tax deductions.
A new report by the AHURI recommends a cap on housing-related tax deductions that should be phased in over 10 years, starting with a $20,000 cap and falling by $1500 a year to a final limit of $5000.
“One of our key findings is that gradually reducing the generosity of capital gains tax and negative gearing provisions over a decade-long time frame would result in only a modest impact on the after-tax return from housing investors for most ‘mum and dad’ investors,” lead report author and University of Tasmania professor Richard Eccleston said.
Rental income for Queensland landlords increased 3.1 per cent in the past financial year, according to data from the ATO, and is tipped to continue to rise.
The latest quarterly rental review from CoreLogic reveals Brisbane’s median weekly rent rose 0.3 per cent over the past quarter and has increased 1.2 per cent in the past year to $435 — the strongest rental growth in the city since July 2015.
Brisbane’s gross rental yield at the end of June was a healthy 4.43 per cent.
Mr Button said he only increased rents in his properties to cover inflation, the majority of rent and rates.
“Any other maintenance costs we’d cover ourselves,” he said.
A new study by finder.com.au has found Brisbane property owners are also spending less on mortgage repayments than any other capital city.
Landlords in Brisbane spend on average 17 per cent of their income on home loan repayments.
That’s well below the ‘mortgage stress’ threshold of 30 per cent — touted as the danger zone for borrowers.
Brisbane homeowners spend $1,122 a month on their mortgage on average, which is roughly one sixth of the average national monthly wage of $6,794.
Ms Hassan advised would-be property buyers to reduce other debt obligations before applying for a mortgage.
“You don’t want to just scrape by after paying all your expenses because interest rates would only have to increase slightly to feel mortgage stress,” she said.
STATE BY STATE BREAKDOWN OF POPULAR TAX DEDUCTIONS
State Interest Land tax Council Rates Travel Total Negatively geared
on loan(s) expenses deductions properties
NSW $9,984 $3,168 $1,014 $450 $16,552 50%
QLD $8,653 $1,744 $1,456 $574 $12,876 68%
VIC $8,898 $859 $1,034 $372 $12,566 59%
WA $9,881 $851 $1,145 $513 $13,705 64%
SA $7,144 $608 $903 $461 $10,515 62%
ACT $9,399 $1,456 $1,136 $362 $14,345 67%
TAS $5,777 $463 $922 $515 $9,756 54%
NT $10,443 $1,032 $1,005 $660 $16,800 62%
AUS $9,115 $1,392 $1,135 $471 $13,861 60%
(Source: finder.com.au, ato.gov.au)
HOW MUCH INCOME GOES TO YOUR MORTGAGE?
City Average mortgage repayment Monthly wage Proportion of monthly wage
Adelaide $1,328 $6,254 21%
Brisbane $1,122 $6,682 17%
Melbourne $1,266 $6,820 19%
Perth $1,404 $6,822 21%
Sydney $1,701 $6,858 25%
(Source: finder.com.au, ato.gov.au)
Three reasons Brisbane is doing better than Sydney and Melbourne
Brisbane’s ‘fairer’ property prices had sparked migration from southern capitals. Picture: AAP/Ric Frearson.Source:News Corp Australia
BRISBANE now has a more optimistic picture than Sydney and Melbourne — as working class suburbs deliver the strongest growth in the past decade for the state.
A WORKING class suburb in Brisbane has beaten the bluechips to pull off the highest growth the state has seen in the past decade.
Underwood in Brisbane’s south has seen a massive 65.6 per cent rise in median house prices between May 2008 and May this year, according to latest figures by property data experts CoreLogic.
It comes as a prominent Sydney property expert declares there is now more optimism for Brisbane than Sydney and Melbourne thanks to the city weathering the unit glut, interstate migration, a fairly valued market and the economy picking up again.
None of the usual bluechips were on the top 10 list which saw Ashgrove come in second (53.4 per cent) followed by Sunnybank (50.7 per cent) which rode a wave of Asian buyer interest in recent years.
SQM Research head Louis Christopher said there was growing evidence that Brisbane had coped better than Sydney and Melbourne with recent housing market woes, prompting fresh optimism.
Brisbane listings figures out yesterday showed the city rose the highest of all the capital cities last month, but unlike Sydney and Melbourne where the effect of a rise in listings was a drop in asking prices, in the River City prices rose almost in defiance.
That, according to Mr Christopher, showed the worst was over for Brisbane, with the city proving it had coped with the oversupply.
“We’re a little more optimistic on Brisbane than Sydney and Melbourne right now,” he told The Courier-Mail.
The comments come as the Reserve Bank yesterday decided to keep its cash rate target on hold at the record low of 1.5 per cent, with no sign that it is likely to move any time this year or even most of next year.
“Generally speaking when you see a big rise in listings, it’s not a good sign as absorption rates are falling like in Sydney and Melbourne, but Brisbane is coming from the perspective that it had its downturn,” Mr Christopher said.
“I think Brisbane is coping better than Melbourne and Sydney right now. I don’t believe prices for freestanding houses are falling in Brisbane like they are in Sydney and Melbourne … Potentially the worst is over for Brisbane.”
Three things were running in the River City’s favour, he said.
“The acceleration in interstate migration from southern states to Queensland” was a key factor, he said.
“That has occurred because the housing market is more fairly valued (in Brisbane) and there is a standard of living gain moving south to north”.
As well, he said, the “Brisbane economy is picking up again so job creation has been improving and just as well because I think one of the barriers moving (from the) south to Queensland has been, up to recently, because of the soft job market.”
“The mining downturn has been over for a solid 18 months so it’s meant that the move has been less riskier for people to do because they have been able to find work making the move.”
Mr Christopher said even better was that housing construction had peaked in Brisbane.
“This is good on the supply front. I think the worst is behind us. We still have an oversupply scenario but it’s not likely to get worse from here. Given the increase in interstate migration, (supply) will now wind down as the year progresses.”
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