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First National says budget fails property issues
Released 17 May 2011



The Federal Budget fails to tackle government obstacles faced by developers, the shortage of land releases, excessive taxation on new housing or the fears surrounding a climate of rising interest rates according to First National.    

First National Real Estate Chief Executive Ray Ellis said doing nothing to remove government impediments to development would assure that housing affordability only continues to worsen.

“The Federal Treasurer continues to ignore calls to reform inefficient taxes like stamp duty and does not understand talking about ending negative gearing will effect the very working families this government has sworn to protect,” Ellis said.

“Investors have been slow to return to the property market and ending negative gearing or adding investment property exit taxes, as the Treasurer has suggested, will see them leave the market, possibly for good. The shortage of investment property ownership is already showing up directly in rapidly rising rents.”

Ellis said rents have surged by 7.6% in New South Wales and by 6.5% in Victoria in the year to March.

“That hits the people hard who can least afford it, working families who rent,” he added.

First National Real Estate indicated that with expectations of falling unemployment, not enough is being done to curb inflation or wages growth.

This is likely to force the Reserve Bank’s hand on interest rates sooner, further damaging investment in a climate where the rising value of the Australian dollar is encouraging offshore investment.