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Queensland Budget 2018: What it Means for the Property Industry

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Queensland Budget 2018: What it Means for the Property Industry
Queensland Treasurer Jackie Trad handed down the Queensland State Budget on Tuesday, delivering a surprise $1.5 billion surplus and putting an extra $200 million into people’s pockets.

This year’s budget focused on infrastructure, tourism and mining funding.

Property investors will also be met with a 0.5 per cent increase in the land tax rate for aggregated holdings above $10 million, as well as an increase in the additional foreign acquirer duty from 3 per cent to 7 per cent.

The government also announced it will cut back the first home owners’ grant.

So what does the state budget mean for the property industry?

Here is what you need to know.

Additional Foreign Acquirer Duty

Aligning with states nationwide, the Queensland government announced an increased rate for additional foreign acquirer duty.

The AFAD is an additional tax on relevant transactions that are liable for transfer duty, landholder duty or corporate trustee duty which involve a foreign person directly or indirectly acquiring certain types of residential land in Queensland by foreign persons.

The duty will rise from 3 per cent to 7 per cent and is forecasted to result in an increased revenue of $33 million per annum.

Infrastructure Improvements

The state government will dedicate $4.217 billion to transport and roads.

The Sunshine State’s long-awaited duplication of the Sunshine Coast rail line received $161 million.

The Toowoomba Second Range Crossing project received $543.3 million, a route to the north of Toowoomba from Helidon to the Gore Highway.

Brisbane’s Cross River Rail received $733 million to go toward the $5.4 billion project. The federal government failed to pledge any assistance towards the Cross River Rail project earlier this year leaving the state government to foot the bill.

There’s also $487 million over four years for upgrades to the M1 on Brisbane’s south and on the Gold Coast.

Queensland Budget 2018: What it Means for the Property Industry

Proposed Exhibition station on Cross River Rail. Artist’s Impression.Image: Cross River Rail Authority

First Home Buyers Grant Slashed

First home buyers have come to expect a $20,000 starter grant since 2016 will now see it cut to $15,000 if they buy a house from July onwards.

The $5,000 boost had been added to the grant in 2016 by former Treasurer Curtis Pitt, with the measure supposed to be in place for just one year.

It was extended twice in six-months until the end of 2017 and then to June of this year.

Land Tax Increase

Under the new taxes introduced in Tuesday’s budget, foreign landowners with more than $10 million worth of landholdings will now be in line for a 0.5 per cent increased rate of land tax.

Individuals with properties worth more than $10 million will now incur an additional rate of 2.25 per cent (or 2.5% for trusts or companies) for every dollar of taxable value over $10 million.

This is expected to bring in $71 million in revenue in its first year, with a projected 11 per cent increase in 2018-19 land tax revenue.

Source: brisbaneinvestor.com.au

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Brisbane and Queensland hit record property rises

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Brisbane and Queensland hit record property rises
Brisbane’s annual median house price hit a new record of $670,000 over the March quarter, according to the REIQ.

The REIQ’s March quarter Queensland Market Monitor found that against a backdrop of cooling southern markets and falling listings volumes, Brisbane house sales demonstrated “admirable” resilience, buoyed by steady population growth driving demand and underpinned by good economic fundamentals.

REIQ media and communications manager Felicity Moore said that anyone thinking of selling was going to find willing buyers in good supply.

“In this market, we could potentially see a rise in off-market sales as eager buyers pressure sales agents to see property before it hits the market,” the manager said.

The unit market eased over the 12 months to March 2018, losing 1.8 per cent off the annual median price of $442,000.

Ms Moore said that the unit market was at the tail end of an unprecedented level of supply. Rising demand would undoubtedly absorb excess stock, and the only question remaining was just how long that would take.

“Queensland has become the number-one destination for internal migration, taking over from Victoria in the latest ABS Census data, and our overseas migration is at its highest level in years, which means demand for accommodation will continue,” Ms Moore said.

The rental market is operating in the healthy range, with vacancies at 3.1 per cent for the March quarter and rising demand levels easily absorbed almost 3,200 new rental properties hitting the rental pool this quarter.

Ipswich

The Ipswich house market grew by 3.0 per cent to a new annual median house price of $340,000. March was a quiet quarter for this market, falling by 1.5 per cent, but over the year, it performed well.

The growth in the house market was offset by falls in the unit market, contracting by 3.0 per cent over the 12 months to March 2018 to an annual median unit price of $319,900.

Logan

The Logan house market delivered among the strongest performances for all markets in the March report, adding 4.0 per cent to the annual median house price to $395,000.

The unit market was one of the few markets to grow, adding 0.7 per cent to an annual median unit price of $271,000. However, over the past five years, the unit market has fallen by 7.5 per cent.

Moreton Bay

The Moreton Bay annual median house price grew a steady 2.4 per cent over the 12 months to March to deliver a median house price of $435,000. This growth is the smallest in Greater Brisbane.

The unit market felt the pain of the combined factors of strong supply and the affordability of houses, with a 3.8 per cent contraction in the annual median unit price to $346,250, down from $359,900 this time last year.

Redland

Redland LGA delivered “rock star” growth of 3.9 per cent for the year to a median house price of $530,000. The heavy lifting was done in the suburbs of Birkdale and Cleveland, which delivered 6.3 per cent and 6.7 per cent growth, respectively. The lifestyle and affordability options in this region are proving very popular with buyers.

Similar to the house market, the Redland unit market delivered stellar growth over the 12 months to March 2018, adding 3.4 per cent growth to a new median unit price of $409,500. This was by far the strongest unit growth in all of Greater Brisbane.

Gold Coast

The Gold Coast has taken the gold medal for annual median house price growth again, adding 6.0 per cent growth to a median house price of $620,000, the highest growth in the state.

The unit market added 1.9 per cent to deliver a median unit price of $428,000 for the year.

Toowoomba

The Toowoomba market has been a consistently steady performer, delivering 1.1 per cent growth for the year to March 2018 to a median house price of $355,000.

The unit market has defied regional trends throughout most of 2016 and 2017; however, gravity is now catching up and this market contracted 2.9 per cent to $300,000. The market remains 17.6 per cent larger than it was five years ago.

Sunshine Coast

The house market of the Sunshine Coast Statistical Division (SD), incorporating the Sunshine Coast LGA and Noosa Shire, has delivered moderate and sustainable growth for the quarter, the past year and the past five years.

A typical house in the Sunshine Coast SD increased in value by $31,250 for the past year to reach an annual median price of $576,250. Noosa continued holding the title of the most exclusive market compared to the Sunshine Coast local government area as Noosa houses generally cost $100,000 more.

In March 2018, the Noosa median house price reached $665,000 compared to the Sunshine Coast median house price of $563,000.

The Noosa unit market also performed well for the past 12 months, growing a stunning 7.1 per cent to reach an annual median price of $525,000 and remaining as the most expensive unit market in Queensland.

Fraser Coast

The Fraser Coast house market continues to be a steady performer, with annual median prices holding steady for the past quarter and increasing very modestly (only 1 per cent) for the past year. A typical house in Fraser Coast had an annual median price of $315,000 in March 2018.

The unit market performance was weak in the March quarter. However, its performance for the past year was better compared to the house market as the annual median unit price increased by 2.2 per cent. A typical unit in Fraser Coast had an annual median price of $259,500 in March 2018. Only about 11 per cent of the regional dwellings were units.

Bundaberg

The Bundaberg house market has held its ground over the past five years, with a house costing about the same today as it did five years ago. However, the market showed small growth levels of 1.8 per cent over the past 12 months, which is encouraging.

A house in Bundaberg cost an annual median price of $285,000 in March 2013 and March 2018.

The unit market performed a bit better than the house market over the past five years. A unit in Bundaberg increased in value from $251,400 in March 2013 to $259,000 in March 2018.

Gladstone

Gladstone has stared down some of the most challenging market conditions in the state. This market lost 8.5 per cent over the 12 months to the March quarter to have a median house price of $280,000. This market is more than 38 per cent below where it was five years ago.

The unit market fell by 36 per cent over the past 12 months to an annual median unit price of $167,500.

Rockhampton

The Rockhampton property market slipped moderately for the past year, with house prices falling by 1.9 per cent to $265,000 and unit prices contracting by 1.3 per cent to $295,000.

Units continued to outperform houses, as they’ve done for much of the year, and ended the year more expensive than houses. This atypical performance may be the consequence of the limited unit market, which represents less than 10 per cent of the region’s dwellings.

Mackay

The Mackay house sales market has delivered an outstanding 4.1 per cent growth to the annual median house price to reach $333,250 and live up to last quarter’s forecast of a stronger start to 2018.

This market is now officially in recovery.

However, the unit market performance remained weak as unit prices fell by 7.8 per cent to $212,000 for the past year. Mackay is the second most affordable unit market in the state.

Townsville

Townsville delivered a surprising fall of 3 per cent in the annual median house price for the year to March to reach $325,000.

Even more surprising, units grew a massive 5.7 per cent for the year to March to $280,000.

Cairns

Cairns delivered steady growth of 2.5 per cent over the past 12 months to arrive at an annual median house price of $410,000 in March 2018.

The Cairns house market has been one of the top two regional performers (excluding the south-east corner) for the past five years of all the areas analysed in the Queensland Market Monitor. House prices increased by 17.1 per cent, or $60,000, from $350,000 in March 2013.

The unit market was weak in the year to March, with the annual median unit price falling by 1.7 per cent to $232,000.

Source: brisbaneinvestor.com.au

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Brisbane house prices have hit a record high

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Brisbane house prices have hit a record high

Brisbane’s property market performed well in the past quarter with median house prices reaching a record high. Picture: AAP/ Ric FrearsonSource:News Corp Australia

BRISBANE’S house prices have hit a record high with new figures revealing the median had now hit $670,000.

While the property market continued to cool in southern states, new figures released by the Real Estate Institute of Queensland showed the median house price within the Brisbane local government area was 3.1 per cent higher in the March quarter.

REIQ CEO Antonia Mercorella said the growth demonstrated “admirable resilience’’ in the local market.

She said the price rise was buoyed by steady population growth and strong demand and a lack of new listings.

Stock on market was down to just 6.1 per cent — the lowest in the state.

As a result Ms Mercorella said buyers had to act fast if they wanted to snare a property with days on market now at just 32 days.

Matt Lancashire of Ray White New Farm, said the past quarter had been a strong one for the Brisbane market

“Our last quarter was the most positive quarter in this financial year for us,’’ he said.

Mr Lancashire said the unit market in the inner city was starting to fire again and importantly Brisbane’s property market including the luxury end, was seen as really good value.

He said in the past couple of months there had been a huge amount of interstate interest in the market.

The report said the outlook for the house market in the Brisbane local government area remained solid while parts of the unit market continued to face difficult conditions because of oversupply.

“We expect to see greater equilibrium between supply and demand over the next 12 to 24 months,’’ it said.

REIQ chairman Peter Brewer said the figures showed that Queensland was a “safe haven’’ for property investment.

“Interstate migration is still strong, that helps give us stability around prices as well,’’ he said.

Mr Brewer said with pledges for spending on infrastructure through Federal and State governments on things like Queensland roads, property was becoming more attractive here.

“Overall it is a pretty healthy report for Queensland compared to other states,’’ he said.

Mr Brewer said growth in Brisbane and Queensland was “steady, nice, comfortable and sensible’’ and that wasn’t a bad way to be.

“Real estate is still the number one spectator sport and people still watch it with passion and we are very, very, safe.’’

Other council areas outside of the Brisbane area also performed well during the quarter. The Logan local government area delivered one of the strongest performances during the quarter

with its median house price up 4 per cent to $395,000.

The report found the “lifestyle markets’’ of the Gold Coast and Sunshine Coast had continued to drive the growth of sales and rentals.

The Gold Coast median house price was down by 0.3 per cent in the quarter, but grew by 6 per cent in the past 12 months to $620,000, the highest growth in the state, while on the Sunshine Coast the median house price rose by 2.3 per cent for the quarter and 5.2 per cent for the past 12 months to $576,250.

Source: brisbaneinvestor.com.au

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Foreign investment in Australia’s housing market collapses: FIRB

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Foreign investment in Australia’s housing market collapses: FIRB

The FIRB has revealed a fall in foreign investment in new apartments in Australia.Source:Supplied

FOREIGN investment in Australia’s housing market has fallen, amid waning investor appetite and tighter lending standards.

OFFICIAL data has confirmed a collapse in approvals for foreign investment in Australia’s housing market, amid waning investor appetite, higher charges and tighter lending standards.

The Foreign Investment Review Board’s annual report reveals a 67 per cent fall in residential real estate approvals last financial year — down from 40,149 approvals to 13,198.

The value of FIRB approvals also plunged, from $72.4 billion to $25.2 billion in fiscal 2017.

The report reveals 18 per cent of approvals to foreigners were for residential real estate in Queensland in 2016-17.

Foreign investment in Australia’s housing market collapses: FIRB

Proportion of residential real estate approvals by state and territory in 2016-17. Source: FIRB.Source:Supplied

Victoria and New South Wales remained the favourite destination for investment, accounting for nearly three-quarters of all approvals granted.

The FIRB said a significant factor contributing to the reduction in approvals was the introduction of application fees from December 2015.

“The introduction of fees resulted in investors only applying for properties they intend to purchase,” the report said

Foreign investment in Australia’s housing market collapses: FIRB

FIRB Residential Real Estate Approvals by Year.Source:Supplied

“Prior to the introduction of fees, individuals often made several applications earlier in the process when considering multiple properties, even though they might have only ended up purchasing a single property.

“This suggests that the resulting reduction in approvals may not imply a corresponding a reduction in actual investment in residential real estate. That is, the actual decline is likely to be lower than implied by the data.”

Foreign investment in Australia’s housing market collapses: FIRB

The FIRB has revealed a significant drop in foreign investment approvals for residential real estate in Australia.Source:Supplied

Along with the introduction of state-based taxes on foreign investors, the FIRB said weaker demand from China was another factor behind the decline in approvals granted.

Investment in new apartments from mainland Chinese investors dropped significantly in 2016-17.

AllenWargent Property Buyers chief executive Pete Wargent said the figures would have some significant impacts on the new apartment sector, construction trends, and the broader economy — especially in Sydney.

Foreign investment in Australia’s housing market collapses: FIRB

The FIRB says weaker demand from China impacted the fall in approvals.Source:Getty Images

Mr Wargent said he expected Sydney to experience the greatest number of failed apartment projects, with increasing signs of discounting on new apartments.

“Perhaps this was an inevitable end-game for this cycle, where development has been too much skewed towards apartments for investors, and too little towards the types of medium-density dwellings that people want to reside in,” he wrote in his blog.

But Chinese international real estate website Juwai.com chief executive Carrie Law played down the reported decline in Chinese demand.

Ms Law said that in the second half of 2016, Chinese buyers were investing in Australian real estate at an almost irrational pace.

“It was like money falling from heaven for vendors and developers,” Ms Law said.

“In early 2017, capital controls, financing restrictions, and foreign buyer taxes reduced Chinese investment to more reasonable levels.

“Since November 2017, we seem to have entered a period of more sustainable long-term growth.”

Ms Law said Chinese buying enquiries for Australian property in March were 5.7 per cent higher than the month before and in April they were 22.3 per cent higher.

“Unfortunately, this year’s FIRB data is not directly comparable to that of prior years, due the change in regulations and buyer behavior,” she said.

“The big declines are partly due to lower demand, and mostly due to the changed application fees.”

Source: brisbaneinvestor.com.au

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