While Queensland’s proposed new land tax draws mainstream media attention as per its validity, enforceability and just how the state’s property investor details as garnered and shared – or not – broking won’t be affected, Mr White explained.
“I can’t say I understand why the Queensland government are doing this, given they are in budget surplus – or were, based on the state government treasurer’s comments,” the Finance Brokers Association of Australian (FBAA) spokesperson said.
“Therefore without understanding why this is being done, I am unsure if this is a good thing or bad,” he added.
“My first response is ‘why’ and that I don’t see this as a positive thing for Queenslander or interstate investors.
“But depending on what is driving this, it may be a means to slow Queensland housing process form exploding due to interstaters basically being prepared to pay way over the odds for a property in Queensland, so they can escape their own state.
Mr White was quick to point out that Queensland has the highest migration of people into any state, but added: “Even if this was the case, I still don’t understand why the government is doing this, what the data says to support it, and if it will have a positive outcome.”
“I don’t think it will change the lending landscape so much, nor have a negative impact on brokers,” he explained.
“Rather it will shift where people may buy and or invest … but they still will [invest in property] somewhere, so the volume of lending continues – just possibly in a different state,” he said.
Which state’s investors are affected exactly
Sundry mainstream media reports highlight the sharing of interstate property ownership data is key to the success of the proposed Queensland land tax – due to come into effect in June 2023. However, more recently the Queensland government has suggested it can glean such information itself from publicly available registries and valuations.
Mr White described the situation as “all very confusing”, and added that: “as such, I feel [it] won’t play out and wouldn’t surprise me if it never enacts or happens when it’s due to commence.”
The NSW Perrottet state government was first to state it would not be handing over any data to Queensland about NSW residents who may own properties in both states. The tax is said to affect anyone with investment properties in multiple states including Queensland and exceeds the latter’s $600,000 threshold.
Queensland rental properties in decline
In context, according to the 2022 Property Investment Professionals of Australia (PIPA) 8th Annual Investor Sentiment Survey, nearly 30 per cent of rental dwellings have been stripped from the Queensland market in two years as more than 160,000 investment properties were potentially sold to homebuyers.
The survey found that a staggering 45.1 per cent of investors had sold at least one property in the Sunshine State in the two years to August this year.
Further independent analysis of the data found that nearly two-thirds (65 per cent) of all investment dwellings were bought by owner-occupiers over the period, which means rental stock in Queensland has potentially fallen by an extraordinary 29 per cent – or about 162,000 dwellings – in just two years.
The 8th annual survey – which is conducted online in August and this year received 1618 respondents from property investors – also found that 16.7% of investors have sold at least one property over the two-year period, which reflects a potential drop in rental supply of 10 per cent, or about 269,000 dwellings, given about 65% of these were bought by owner-occupiers.
In a sign of more rental stress to come, 19% of investors nationwide have signalled they intend to sell even more property over the year ahead, with the number one reason being Queensland’s new land tax law that will penalise owners of property in other states/territories.
PIPA chair Nicola McDougall said it was clear that investors have had enough of being the cash cow for all levels of government.
“From Coolangatta to Cairns, investors have deserted the Queensland market over the past two years, with more rental pain on the horizon as well,” Ms McDougall said.
“We had an inkling that investors had been selling their holdings over the past year or two, but these results show that even we had under-estimated the volume of rental properties that have been jettisoned from the market.
“The fact that 45.1 per cent of investors sold at least one property in Queensland is mind-blowing – especially since this was mostly a period when the ridiculous new land tax wasn’t even law.”