State puts improved Queensland’s confidence at risk

Following the federal election, and before the Queensland Budget was handed down, the property industry’s sentiment increased on both a national and state level, according to the latest ANZ/Property Council Survey.

Industry sentiment in Queensland increased from 113 index points to 124 index points over the quarter, while national industry confidence has climbed from 115 index points to 128 index points.

The Property Council’s Queensland Executive Director, Chris Mountford, says the rise in sentiment can be attributed to the fact that the industry’s fears over proposed changes to negative gearing and capital gains tax have been put to bed following the federal election.

“We saw a degree of confidence return to the industry immediately following the federal election, which has been captured in this quarter’s results,” explained Mr Mountford.

“From a financing standpoint, over the last quarter, we have also seen discussion of potential credit loosening, adding hope that some sanity on mortgage lending may be around the corner.

“This survey reports the first positive result in debt finance availability expectations in four years, which have risen from -15 index points, in March 2019, to 9 index points.”

While the latest results show increased sentiment in office and residential capital growth expectations, Mr Mountford explained the survey would have likely captured different results in the wake of the 2019/20 Queensland State Budget.

“Despite the strong results we have witnessed this quarter, it is important to remember the survey does not capture the industry’s views of the Queensland Budget, which was released after the survey was completed,” Mr Mountford noted.

“The State Budget has imposed devastating and harmful taxes on our industry, driving investment away from Queensland and increasing the cost of doing business.

“The increased land tax slugs, for properties over $5 million and $10 million, coupled with the 2% surcharge on foreign owners, impacts our ability to attract crucial overseas investors, and cripples Australian business with foreign stakeholders.

“In the last three years, we have seen nine new or increased taxes imposed on the property sector. These taxes are unjustifiable, unsustainable, and will ultimately be passed down to the businesses that operate on this land.

“It is clear that the Government will continue to target our industry, with no regard to the long-term consequences.

“When it comes to tax competitiveness, Queensland’s land tax rates are far higher than New South Wales or Victoria.

“Policy makers should be ramping up efforts to support the property industry, restoring confidence in Queensland and creating new jobs,” explained Mr Mountford.

Source: Property Council of Australia