THE public awareness campaign against property taxation has succeeded in its objective, according to the Real Estate Institute of Australia.
REIA president Adrian Kelly said the campaign aimed to ensure that all political parties, candidates and, importantly voters know the consequences of the opposition’s policy on negative gearing and capital gains tax.
“Negative gearing has been one of the most publicly debated issues of the campaign. Rarely an interview with a politician or a current affairs program passes without the matter being discussed. It is well and truly an election issue.”
Mr Kelly said the campaign had been aided by a network of real estate groups, and campaign content has already reached nearly eight million Australians.
“The commentary and debate beneath REIA’s daily posts confirms the importance of a healthy property sector in the lives and aspirations of ordinary Australians.
“Whilst we still have a week and a half to run of the campaign, I am quite sure that public awareness has improved significantly and I am encouraged by the likelihood that Senate crossbenchers will reject any legislation around the proposed changes should a Labor government be elected,” Mr Kelly said.
THE Housing Industry Association said the contraction in the housing market over the past six months has occurred faster and is larger in scale than the contraction experienced after the GFC.
Speaking in the wake of the Reserve Bank board’s decision to leave the official cash rate on hold at the historic low of 1.5 per cent, senior economist Geordan Murray said the decline in industry activity has occurred in an environment when lending rates have remained relatively stable.
“Had the RBA lowered rates today it may have eased some of the pressures in the housing market, but the acceleration in the downturn in building activity during 2018 was largely due to regulatory imposts from state and Federal governments.
“Governments should be looking at measures to make home ownership more accessible to households, both as owner-occupiers and investors.”
Mr Murray said removing the counter cyclical measures introduced at the peak of the housing cycle would be a good place to start.
“This includes reviewing the appropriateness of assessing loan serviceability against an interest rate of seven per cent, almost double the current market rate. Reversal of the punitive rates of stamp duty on foreign investors is also overdue.
“These measures would assist in restoring the confidence in the housing market that was lost in 2018.
“The industry continues to complete work on existing projects but there are now fewer new projects getting under way. Approvals for the construction of new homes for the first three months of 2019 equates to an annualised level of home building of around 180,000 starts. This compares to 220,000 starts in 2018.”
Employment conditions in the building sector across the nation are expected to ease throughout 2019, unless there is an improvement in housing activity.
“Any measures that increase the tax burden on homes, such as an increase in Capital Gains Tax, would cause a further contraction in the market and exacerbate employment losses,” concluded Mr Murray.