First-time buyers across a range of age and income spectrums
– including key workers like teachers and nurses – accessed the
first home loan deposit scheme during the first six months of 2020.
One in eight first-home buyers availed of the scheme with NSW
taking the largest share of the guarantees, according to a National
Housing Finance and Investment Corporation report.
Out of the 10,000 scheme allocations, 2263 went to NSW residents,
1845 to Queenslanders and 1617 to Victorians. Demand was lower
in WA and South Australia due to long-standing FHB support, the
NHFIC chief executive Nathan Dal Bon says demand for the scheme in the six months to June 30 continued despite
the onset of the pandemic. Major cities attracted nearly 62% of buyers, while 38% opted for regional areas.
The majority who bought in capital cities purchased in areas up to 30km away from the CBD, with fewer than
a quarter buying within 15km.
Decentralisation will become more prevalent for
future home buyers, according to industry experts.
The traditional town planning model – where CBDs
are filled with office towers, retail and high-density
apartments surrounded by urban sprawl – is losing
its appeal, says Propertyology head of research
He says Australians are in the midst of re-evaluating
their priorities. More manageable mortgages, lowdensity
locations (that are less susceptible to future
lockdowns), regional lifestyle destinations and
working from home will become important to buyers.
Pressley predicts a new era of regionalisation is
likely to produce about twenty low-density towns
and cities that will benefit from significant internal
Social demographer Mark McCrindle says locations
with a low risk of future lockdowns with an industry
mix conducive to this new world will be the ones to
watch. This includes a good quality detached house
in a location that offers plentiful open space and a
The results of a new survey have revealed what property investors are most concerned about in the current market but also found that they feel more positive than other property owners.
According to the latest edition of ME’s Quarterly Property Sentiment Report, perceptions of the market is mixed. A slim majority feel neutral towards the market (37 per cent), while more than a third feel positive (35 per cent) and 28 per cent feel negative.
However, investors feel more positive than owner-occupiers or first home buyers, at 44 per cent of respondents.
According to ME’s general manager of home loans, Andrew Bartolo, the positivity in investors and younger age brackets shows the sentiment that price declines provide a good opportunity to purchase property.
Property investors are also optimistic about property prices. More investors expect the value of their property to rise over the next 12 months more than those who think they will hold steady or decline; 32 per cent are expecting a rise, as opposed to 30 per cent expecting declines and 30 per cent not expecting any movement.
Overall, property owners in metropolitan Tasmania are expecting value rises the most at 50 per cent, followed by those in metropolitan NT (40 per cent), and then metropolitan South Australia and Queensland, both at 36 per cent.
“Enduring positivity about price expectations is possibly linked to Australians’ long-held belief that property prices will always go up,” Mr Bartolo said.
Given that a large proportion expect prices to rise in the next 12 months, 58 per cent of respondents plan to sell their property, while 34 per cent plan to buy property.
For investors, 44 per cent plan to buy property and 23 per cent plan to sell. Two-fifths (39 per cent) said they do not plan to buy or sell.
The largest property fears
First home buyers are most concerned with housing affordability (94 per cent), followed by owner-occupiers (87 per cent). Investors are least concerned, at 83 per cent.
Affordability was a greater concern for investors than many other issues, such as: switching from interest-only loans to principal and interest loans (at 74 per cent), the value of their property declining (64 per cent), declining property prices resulting in owing more on a property (53 per cent), and tighter credit policies making refinancing more difficult (53 per cent).
“People often forget house prices doubled in recent years, so falls of 10-15 per cent won’t do much to improve affordability over the long term,” Mr Bartolo said.
“Concerns about credit may change given the recent APRA announcement on serviceability.”
Meanwhile, 59 per cent of investors were happy that property prices were declining, which could make property purchases a more appealing option.
“Cooling property prices present new opportunities for those trying to get into the market,” Mr Bartolo said.
“If you’re planning to buy, it’s important to think long-term and always buy affordable.”
“Consider whether you can comfortably repay your mortgage over the long term regardless of changes to interest rates, your lifestyle, and without having to rely on less dependable sources of income like rent and bonuses.”
BRISBANE house prices are continuing to grow, with new figures revealing they have hit a record high for the 26th straight quarter — making the Queensland capital the envy of its cooling counterparts.
The latest Real Estate Institute of Queensland Market Monitor, to be released today, shows the annual median house price within the city’s local government area rose 1.1 per cent in the 12 months to the end of December to reach a new high of $675,000.
The Brisbane LGA median house price has jumped 25.9 per cent since December 2013, when it was $535,000.
The last time the city recorded an annual drop in its median house price was back in December of 2012, according to the REIQ, but it has climbed slowly and steadily ever since.
According to the REIQ, Brisbane’s housing market “continues to be one of the nation’s most consistent capital-city performers”, delivering moderate but sustainable price growth — so far defying the downturn gripping Sydney and Melbourne.
Among the top suburbs for house price growth in the Brisbane local government area were Sandgate, Hendra, Mount Ommaney, Albion and Hemmant.
TOP GROWTH SUBURBS FOR HOUSES IN BRISBANE LGA
Suburb Median price Annual change %
1. Sandgate $750,000 18.1%
2. Hendra $1.115m 14.7%
3. Mount Ommaney $1m 13.8%
4. Hemmant $545,000 13.3%
5. Albion $858,000 13%
(Source: REIQ, based on 12mths to December 2018)
REIQ chief executive Antonia Mercorella said the figures showed Brisbane house values had continued to rise at a time when many capital cities were seeing prices go backwards.
“Because (Brisbane) hasn’t experienced that incredible accelerated growth, we’re not going to have that boom/bust experience that other capitals have.” Ms Mercorella said.
But she said that while Brisbane’s growth had been buoyed by increased interstate migration, improving economic fundamentals and strong demand, its resilience was flagging.
“Brisbane has so far withstood the headwinds facing the property markets in Sydney and Melbourne,” she said.
“Our property market has all the ingredients for a strong performance in 2019, including low unemployment, high levels of infrastructure spending that is creating jobs and high interstate migration levels, which creates demand for housing.
“But what we need is a clear signal from the government that responsible lending doesn’t mean limited lending. Currently, limited access to finance is threatening to stifle the market.”
Ms Mercorella said it was realistic to expect home price growth in Brisbane to be flat for the rest of 2019, but the city had the fundamentals to “really take off” in the near future.
“There are plenty of reasons to be confident and more people are wanting to invest in the Brisbane market because of what’s happening in Sydney and Melbourne,” she said.
“Not only are we affordable, but we offer a good return on investment.”
Ms Mercorella said areas that were most likely to feel the slowdown would be the growth corridors on the outskirts of Brisbane, such as Ipswich and Logan —areas where first home buyers and investors were most prevalent.
“Investors are likely to be the ones facing most of the brunt of tougher conditions in 2019,” she said.
“In addition to a federal election, which always slows activity in the real estate market, there is the threat of looming negative gearing cuts and CGT reforms, plus Queensland investors are also facing the headwinds of a rental legislation review.
“These factors all add up to a potentially very sluggish 2019.”
But buyers’ agents say investors are recognising the growth potential in the Brisbane housing market because of its affordability and lifestyle.
Daniel Walsh, of investment buyer’s agency Your Property Your Wealth, said he had noticed a clear shift in property investment activity away from Sydney and Melbourne to Queensland in the past 12 months.
“Two or three years ago, people were wanting to invest in NSW and Victoria; now we’re seeing them turn to Queensland” Mr Walsh said.
“We had been investing heavily in Victoria over the past two to three years, but yields have started to diminish.
“It’s more attractive in Brisbane in terms of investors seeing greater rental returns and affordability.”
Mr Walsh is forecasting Brisbane to be a standout performer over the next three to five years.
“We’ve had wages increase, job numbers increase, more people are moving to the area and now all these green shoots are showing we’re ready for a boom in Queensland,” he said.
“It’s got all the ingredients for a boom, we just haven’t seen it just yet.”
Over the next six years, the top 10 infrastructure projects in the pipeline are forecast to inject $17 billion into the city and result in significant job creation.
Tourism is one of the most promising growth industries driving the local economy, according to the REIQ.
State government figures released in September show Queensland’s share of the cash international tourists spend in Australia grew more than all other states.
Tourism Industry Development Minister Kate Jones said international visitor expenditure grew 11.5 per cent — more than double the national rate.
“We also saw record highs in international visitor numbers, with 2,762,000 visitors spending $5.9 billion in Queensland,” Ms Jones said.
28 and gerard 29
Lizzy and Gerard Tibbetts are looking at buying a house in Sandgate, which recorded the strongest median house price growth in 2018.
The couple recently sold their home in nearby Brighton and have inspected a three-bedroom character home at 12 Wolsey St, Sandgate, which is on the market for offers over $749,000.
“We’re looking to have kids in the next few years, so we’re after something a bit bigger and those sorts of houses that have a bit of history,” Mrs Tibbetts said.
“That’s why we like it here — it’s by the water and has a lot of original homes.”
The pair, who have been married about 18 months, also love the community feel of Sandgate and its affordability and proximity to the CBD.
“I can get there on the train in half an hour, but not pay the prices you would in suburbs like Paddington,” Mrs Tibbetts said.
“And it’s not cut up into 300 sqm blocks!”
Marketing agent Zac McHardy of Harcourts Pinnacle – Aspley said he was not surprised Sandgate had recorded growth of more than 18 per cent in its median house price in the past year because it had been experiencing a period of gentrification.
“There’s a lot of older homes in the area with older people living there and a lot of them are being sold and people are renovating them and moving in or selling them off, and that’s making a huge difference to the area,” Mr McHardy said.
He recalls moving out of Sandgate when he was 17 because there was “nothing to do”, but that had changed dramatically.
“There’s an actual lifestyle here now,” he said.
“It’s the only place in the Brisbane City Council area on the north side of town that offers waterfront you can actually use properly.
“The whole place is just a community; just a cool place to live now.”
Mr McHardy said mostly owner occupiers were moving into the suburb, but interstate investors were also buying in.
“We’re already seeing the difference (in price),” he said.
“Shorncliffe is just too expensive, so people move to Sandgate, but it’s now starting to become expensive, so they’re moving to Brighton and then they’ll move to Deagon.”
Closer to the CBD, the more affluent suburb of Hendra has also recorded double digit house price growth in the past year.
The median house price has shot up nearly 15 per cent to $1.1 million.
It’s not as positive a story when it comes to the Brisbane LGA unit market, but there are solid signs of improvement.
The annual median unit price fell 2.2 per cent to $440,000 in the 12 months to December, according to the REIQ.
But some suburbs bucked the trend and recorded double-digit growth in unit prices, including Acacia Ridge, Rochedale, Yeronga, Gordon Park and Carseldine.
Agents continue to find the investor-level unit sector challenging, but demand for units aimed at owner-occupiers has improved, according to the REIQ.
The most popular price range for units in the Brisbane LGA is $350,000 to $499,000.
TOP GROWTH SUBURBS FOR UNITS IN BRISBANE LGA
Suburb Median price Annual change %
1. Acacia Ridge $444,017 36.6%
2. Rochedale $747,500 34.1%
3. Yeronga $525,000 21.4%
4. Gordon Park $382,500 17.7%
5. Carseldine $375,000 15.4%
(Source: REIQ, based on 12mths to December 2018)
Originally published as New high for Brisbane house price
2 minute read
In the lead-up to the 2019 federal election, Australians will need to consider three important tax issues that could greatly impact individual taxpayers.
Speaking to Nest Egg, Rami Brass, who leads tax services for national accounting firm RSM, said that there are currently three front runners for the top tax issues in the upcoming federal election, and they all stem from the Australian Labor Party’s proposed tax policies. These issues are changes to negative gearing, capital gains and franking credits.
Under the proposed Labor Party policy, negative gearing will be limited to new housing. Losses from negatively geared property, other than new housing, will not be allowed to be claimed against salary and wage income, but will be able to be claimed against positively geared properties, Mr Brass said.
“Individuals who have negatively geared share investments will continue to be able to offset negative gearing losses against investment income. However, as with negatively geared property, any excess losses will not be able to be offset against salary and wage income or against any future capital gain on the sale of the investment,” he said.
“Essentially, the ALP policy will result in the addition of a new category of tax loss: the investment loss. This will result in a new layer of complexity when preparing individual tax returns, with taxpayers impacted having to appropriately calculate, apply and carry forward investment losses in addition to dealing with capital losses.
“It also raises issues in regards to existing properties and what happens when loans are refinanced and there are borrowings in regards to improvements on existing rental properties.”
Australians who have or are looking to acquire investment assets may also be impacted by Labor’s proposed policy to halve the capital gains tax discount from the current 50 per cent to 25 per cent.
“It is not all bad news, though, with the ALP indicating the policy will not apply to investments made before the implementation date and will be fully grandfathered, in line with the approach to negative gearing changes,” Mr Brass said.
“Combined with the proposed ALP limitations on negative gearing, individual taxpayers looking to capitalise on existing tax concessions to build their wealth will face challenging times with complex and conflicting changes to existing law.”
Finally, the Labor Party is proposing to disallow cash refunds of imputation credits. Under current laws, the imputation credit system allows a taxpayer to be entitled to a credit for the tax paid on dividends paid by companies to shareholders, Mr Brass said.
“A taxpayer who receives franked dividends can use the imputation credit to reduce their tax payable, and where there is no tax payable, or excess imputation credits, the taxpayer is entitled to a cash refund,” he said. “Under the proposed ALP policy, individual taxpayers will no longer be eligible for refunds of excess franking credits.”
Mr Brass said that the original intent of the imputation system was to prevent double taxation, so shareholders who would ultimately be taxed at marginal rates on the distribution of company profits would receive a credit for the share of tax paid by the company on that profit.
“The concern of the ALP, which may be justified to an extent, is that where the marginal tax rate of the individual is lower that the company tax rate, the government loses out on tax revenue,” he said.
“Unfortunately, the individual taxpayers likely to be impacted most by the proposed change will be low-income earners which on face value appears unfair and inconsistent with overall ALP policy.”