Today’s SQM Report confirms the REIQ’s position that Labor’s proposed changes to negative gearing will damage not only the Queensland real estate sector, but the broader Queensland economy, triggering falling house prices, rising rents and billions in lost stamp duty revenue.
REIQ CEO Antonia Mercorella said Labor’s policy, in its current form, would see investors flee the real estate market.
“The projected lost stamp duty revenue could be $2.3 billion. This puts a big hole in the Government budget. That’s schools not funded, hospitals not funded, roads not repaired – every taxpayer and member of the community is affected,” Ms Mercorella said.
“SQM modelling clearly shows if Labor’s proposed changes are implemented the far-reaching economic impact will be significant.
“Renters will bear the most immediate economic cost, with rents potentially rising up to 22 per cent.
“The median rent for a three-bedroom house in Brisbane, according to the latest REIQ QMM report, is $435 a week. If SQM’s modelling is accurate this means renters will have to find at least another $95 a week.
“That’s a couple of tanks of fuel, that’s half the average weekly grocery bill for a young family. That’s not easy to suddenly have to find an additional $95 a week,” Ms Mercorella said. “It will cause housing stress in many families.
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“Labor’s proposed negative gearing policy is reckless. It was announced at a time when Sydney and Melbourne house prices were rising rapidly and the market needed to cool. That is no longer the situation. Southern housing markets are facing falls of around 20 per cent, possibly more over the long term.
“The real estate market is the cornerstone of Queensland’s economy and employs more than 50,000 Queenslanders. We are seeing a significant slowdown already, in the lead-up to the federal election as investors wonder how this policy will affect them. Tightened lending practices are also adding to this pressure, with banks adopting highly restrictive lending criteria.
“Under Labor’s changes, house prices nationally could fall up to 12 per cent. This could equate to the average Brisbane house, valued at $675,000, losing as much as $81,000 in value. This could push new home owners into a negative equity situation,” Ms Mercorella said.
“We urge all voters – property owners and renters – to think very carefully about the vote they cast at the ballot box and what it means for the Queensland economy, for every day families and their budgets,” Ms Mercorella said.