TREASURER Scott Morrison’s Budget offered little for home seekers wanting an immediate boost to their prospects of buying property but buyers will benefit from some key measures in the long run.
FEARS this year’s Federal Budget would include changes to negative gearing or capital gains tax on homes sales have proved unfounded and Treasurer Scott Morrison has instead taken a largely hands off approach to the housing market.
The Budget offered little in the way of major announcements for homeowners, investors or prospective buyers, with much of the real estate focus on measures to better increase housing supply.
The lack of major property tax changes suggested the Government felt confident last year’s Budget measures to crack down on investment activity and foreign spending had the desired affect of calming home prices, particularly in Sydney and Melbourne.
Median home prices have fallen for the last nine months in Sydney and the last five in Melbourne, the latest CoreLogic research showed.
First homebuyer participation in the housing market, meanwhile, has reached a five-year high nationally.
By leaving the current property taxing system largely untouched, Mr Morrison would have calmed the concerns of much of the real estate and development industry, who had feared the government might cave into strong pressure to overhaul negative gearing.
Mr Morrison also offered another surprise by leaving capital gains charges for sellers untouched.
Mr Morrison has instead offered other measures to boost housing supply — a key determinant of prices.
This included a commitment to establish the $1 billion National Housing Finance and Investment Corporation and release more land suitable for housing.
The Budget’s allocation of billions of dollars in transport infrastructure upgrades would also help unlock cheaper housing in further-flung regional areas by making them more accessible, according to realestate.com.au chief economist Nerida Conisbee.
She said the Budget commitment to spend $1 billion on an Urban Congestion Fund to reduce traffic, along with a $3.5 billion Roads of Strategic Importance initiative, would be key measures in boosting demand for cheaper regional housing.
“Traffic traditionally influences liveability and discourages people from living in further out areas, so this may have an eventual impact on affordability,” she said.
Other major projects with the potential to draw more house hunters into cheaper regional areas included the Federal Government’s funding of the first stage of the North South Rail Link in Western Sydney, a commitment of up to $5 billion to the Melbourne Airport Rail Link and $3.3 billion in continued upgrades of the Bruce Highway in Queensland.
Among one of the only real estate cuts was a drop in funding to state affordable housing services. The Commonwealth committed $1.6 billio n this year to support the services, a roughly $295 million drop from last year’s Budget.
Real Estate Institute of Australia president Malcolm Gunning said the Government doing nothing to change negative gearing represented an “ideal” outcome for the housing market, considering the stringent changes introduced last year to quell investor demand.
“The Government already has its hands around the golden goose. It needs to be careful not to strangle it,” he said.
Luxury Gold Coast ‘castle’ on the market
It’s the mega mansion that towers over water. Fit for a King or Queen.
Welcome to the South East’s real-life “castle” home. Nestled on Knightsbridge Parade West at Sovereign Islands on the Gold Coast.
“It’s got a very palatial feel to it… Most of the feedback is it’s very European, built very solid,” Ali Mian from Ray White Runaway Bay told 9News.
The floor plan is as big as eight tennis courts.
Seven bedrooms, nine bathrooms, a gym, sauna, pool, pontoon, cigar and games room, home theatre, all stretched across three floors.
Of course there’s a lift to help you get to each one.
And lots of room to store one, two, even 15 of your own cars.
The list keeps going.
“The entire upstairs is master penthouse we call it… and it’s got a roof top terrace.”
The land was snapped up in 2005, among four blocks that fetched $9.5 million. At the time it was dubbed Queensland’s most expensive.
It took 12 years in total to design and build the fortress.
Based on the Taj Mahal, as well as UK TV Show ‘Midsomer Murders’.
Since 2010 just two owners have called it home, and now it’s back on the market.
The owner is asking for $9.8 million dollars and says he won’t budge. That’s because five blocks down from the castle, a home sold for $7 million last month, and it’s half the size.
Property experts say it’s likely to receive exactly that.
“A lot of them are still being sold under replacement cost and the unique positions that some of these do offer they’re locations you won’t sort of see again” John Newlands from REIQ said.
So far there are three buyers interested.
All are already Gold Coast residents, one is a nearby neighbour.
Gold Coast property: Why this neighbourhood is Surfers Paradise’s best-kept secret
It’s one of the quirks of property journalism that when you discover somewhere exciting and new, well, you just have to write about it.
However, in doing so the secret is let well and truly out of the bag.
Did someone say Byron Bay?
So one can only hope that doesn’t happen in Budds Beach, which is technically part of Surfers Paradise – not that the die-hard locals want to be reminded of that.
It only has about 10 streets, stretching west from the Gold Coast Highway north of the glitter strip to the beach, which purists would say is actually part of the Nerang River … but that’s just semantics.
Height restrictions in some of its streets, unlike the soaring high-rise towers a few hundred metres down the road, mean that many residents have some sort of water view towards the precinct’s namesake of Budds Beach.
Yet, for a seemingly exclusive enclave, its property prices are surprisingly egalitarian with multimillion-dollar waterfront homes a hop, skip, and jump from older units priced from about $300,000.
“You’ve got million-dollar houses and million-dollar duplexes to high-rise apartments and walk-up apartments,” Harcourts Coast Sales Consultant Katrina Keegan said.
“There’s a lot of locals that have been there for 30-plus years and we’re getting a lot of people looking for a sea change because sometimes Surfers can be really overwhelming, just with the tourism factor of it.
“It’s perfect for any downsizer – many of those buyers are now coming to Budds Beach because they like the fact that it’s a little quieter and it is kind of Surfers Paradise’s best-kept secret.”
The precinct might be only about one kilometre long and a few hundred metres wide, but it seems to have an embarrassment of options for those lucky enough to stake a claim as an owner or a tenant.
There remains a smattering of holiday houses, often old Gold Coast beach shacks, however owner-occupiers are by far in the majority.
And what a lucky bunch they are, given they can stroll to a protected beach in mere minutes, perhaps stopping at the community’s social hub, Bumbles Cafe, along the way.
Lambert Wilcox Estate Agents director Mitchell Lambert has been frequenting Budds Beach since he was a boy and these days has been known to slowly pull up on a jet-ski, given the six-knot speed limit, to partake in its myriad amenities.
He said listings never last long – multiple offers are the rule rather than exception – with would-be buyers often living down the street because they never intend to leave Budds Beach.
“Most people who move into Budds Beach move out of Budds Beach in a box,” Mr Wilcox said.
“If you live in Budds this what you’re doing: you’re walking down to Bumbles for a coffee, you’re walking your dog, you’re going to the park, you’re going to have a swim in a really nice section of the river with nice sand, and then you’re going to watch the sunset.”
Oh dear. I fear Surfer’s Paradise’s best-kept secret is no longer.
Investors rush to Gold Coast property market ahead of federal election
The Gold Coast property market may be getting an unexpected shot in the arm from the federal election.
After a quiet finish to 2018, during which the median house price rose by only 1.6 per cent and units were down slightly by 1.2 per cent, Ray White Surfers Paradise CEO Andrew Bell has noted an increasing sense of urgency among buyers eager to lock in a purchase sooner rather than later.
These buyers were factoring in a change of government at the next federal election and the likelihood of changes to the tax treatment of investment properties, as previously signalled by Labor, he said.
“Elections often create uncertainty in the market, but this time it’s a little different because of proposed changes mooted by the Labor Party,” Bell said.
“The market is well and truly factoring a Labor victory and the likelihood of major changes to the taxation regime for property owners.
“Many are buying now to take advantage of the grandfathering provisions proposed by Labor for existing properties.”
Labor’s plans include the abolition of negative gearing on established properties and a reduction of the capital gains discount from 50 per cent to 25 per cent. Negative gearing would remain in place for newly built homes and apartments.
The current rules for capital gains tax and negative gearing would still apply for investors who already own properties.
“The proposed changes are the most significant in a generation for the property market and that’s prompted many buyers to bring forward their plans to step into the market,” Bell said.
“We tapped into this thought process in the planning for The Event last month, which led to an exceptional clearance rate during and following the auction program.”
Bell said the election stimulus had coincided with a cyclical increase in buyer inquiries for Gold Coast property from local and interstate investors.
“We’re certainly seeing an uptick in inquiry from investors keen to buy now before any of the proposed changes are made,” he said.
Bell has warned the proposed changes to property tax rules will affect the broader market, especially those who are unprepared.
“However, there are significant advantages for those who buy properties before these new laws come into effect,” he said.
“The market is definitely more anxious about what’s coming but there are many buyers looking to lock in their position now well ahead of the changes.”
Australia’s biggest auction event, held last month on the Gold Coast, reported a clearance rate of 60 per cent and rising, making it among the most successful RWSP auction programs held on the glitter strip, Bell said.
“There are compelling reasons still in play to support the Gold Coast property market going forward, and we don’t believe that will change any time soon,” he said.
“Strong migration rates, combined with the strength and diversity of the local economy should see buyer activity hold up well throughout the year.”
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