Easter Anzac Lull, Budget Fears Rising!!

Article from The team at Jason Andrew

Barely an auction was called anywhere in the country over Easter and while the market slow crept back into action over the Anzac weekend, volumes were too low in any capital city to yield meaningful averages.

Despite the lack of firm evidence, several experts have now said the Sydney boom is officially over, with price growth slowing and increasing volumes of listings easing supply constraints. As in other capital cities, agents are reporting that buyers are increasingly reticent to pay a premium.

What had become clear by the end of the holiday break is that concerns are rising over the forthcoming Federal budget, set to be handed down on 13th May. Treasurer Joe Hockey has warned Australia to expect a tough budget, saying that a forthcoming Commission of Audit has found Government spending per capita has almost trebled over the past forty years.

Property pundits are speculating that negative gearing may be one of the areas targeted, with the possibility that tax benefits may be grandfathered (only available on existing property investments) or quarantined (only available on new properties). A change of this nature would see a radical drop in demand by investors. Also under the spotlight is the proposed inclusion of the principal place of residence in means testing for the age pension. If this were to occur, the flow-on effect would most likely be a rush of stock in certain segments as cash-poor pensioners are forced to free up liquidity. The other policy in question relates to overseas investment, with some experts suggesting foreigners may be limited to purchases of new property only – again, creating a softening in the current levels of demand.

Whatever lies ahead, the current uneasiness is a timely reminder that good property decisions can only be made with the information that’s directly at hand.