Don’t budget for a decrease in demand
Wednesday 10 May 2017
Once again, the Budget has been delivered. Full credit to the Treasurer for introducing a range of measures aimed at addressing housing affordability I don’t think anyone really anticipates any of those measures will have much, if any, dramatic impact on the extraordinary strength we continue to experience across the residential property market.
The fact remains that it is demand that is driving property prices and of the measures announced by the Government overnight very few appear designed to dilute demand.
Greater opportunities for first home buyers to save for a property is a nice initiative, as is the financial incentive for retirees to sell their family home but the reality is competition for property is high so prices are going to remain strong.
Yes there are new measures designed to limit overseas buyers accessing new developments but I think you will find any hole left by blocking international buyers will quickly be filled with unmet domestic demand. So values will be maintained.
I will admit I am surprised at the projected estimated savings to come from the elimination of the tax deduction that was available for investors who travel to inspect investment properties. Again that might be a worthwhile government initiative but I don’t expect it will be enough to dilute investment demand.
Of course it is worthwhile for a government to evaluate and consider measures to address housing affordability but it is our appetite for property that is driving the sustained value we have been experiencing.
Residential property continues to be seen as a worthy investment and is a financial goal for individuals, couples and families. And with the double digit growth in value we have seen over recent years it is no wonder.
The Budget was interesting but our team will be as busy today as they were yesterday fielding calls from potential vendors and eager buyers.