Sold: 6 Curtin St, Bell Park sold for $756,000 at auction after competition from four bidders. But some investors still baulked at the sale over Labor’s tax reforms.
Labor’s landmark tax reforms had an immediate impact on Geelong’s property market as potential buyers stepped back to consider the full implications of the federal budget announcements.
But it didn’t stop homes from beating price expectations.
Three investors were among four groups who raised a hand for a Curtin St, Bell Park house at an auction on Saturday.
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Harcourts North Geelong agent Joe Grgic said he expected the buyer, who paid $756,000 for the three-bedroom brick veneer residence, to be an investor.
While competition for the 576sq m property listed with a $669,000 to $709,000 guide was strong, especially between two bidders including an intending owner-occupier that ended as underbidder, the buying pool evaporated somewhat following Treasurer Jim Chalmers’ budget speech.
“We do expect (the market) at this stage to tighten up, and we had multiple investors looking earlier in the week, but then after the budget pull out,” Mr Grgic said.
“One of them was looking to buy in a trust, and they actually said, “look, Joe, I’ve just got to work out with my accountant how I move forward. Until that point I’m out of the market’.
Harcourts North Geelong director Joe Grgic said the market was expected to tighten up as investors mull the impact of tax changes.
“It’ll be interesting to see whether people who’ve owned their properties, and especially Boomers, look to offload properties before the change in CGT.
“But a lot of them, if they’ve owned property for a long time, are not negatively geared anyway.”
The reforms restrict negative gearing for residential property to new builds from July 1 2027. After that, rental losses on existing residential investment properties bought after budget night will be quarantined so they can only be offset against other residential property income.
The 50 per cent CGT discount would be replaced with inflation-adjusted indexation to restore the taxation of real gains.
The big switches will be grandfathered for existing investments, and new builds will keep the option to use the 50 per cent discount to help boost supply.
Mr Grgic said there were still fundamental reasons drawing investors to Geelong.
McGrath Geelong and Newtown director David Cortous labelled the government’s tax changes ”greedy”.
“Talking to a number of buyers agents and buyers that we deal with, we’re still economically a very strong proposition with employment, and the way our city is going, being an hour away from Melbourne, and compared to other main cities around Australia – whether it’s Wollongong, Newcastle, Gold Coast – we’re still a very good value proposition.”
But McGrath, Geelong agent David Cortous said investors were taking time out to consider how to structure their next property purchase, considering the reforms to negative gearing, the CGT on investment properties and how trusts were taxed.
“Obviously it only happened last week, and people haven’t got their ducks in a row yet, so that real pain will happen. But yes, there is still investors in the market – it has taken out some investors,” Mr Cortous said.
For sale: The auction of 83 Nicholas St, Newtown was cancelled after two investors walked away but agents are in negotiations with first-home buyers.
“There is no doubt the greed of our government is at an all-time high,” Mr Cortous said.
“People need to be careful and be very wary of their structures for investing in anything moving forward,” he added.
Mr Cortous said he cancelled the auction of a two-bedroom Nicholas St, Newtown home after two investors walked away after the budget was announced.
The 370sq m property is listed with a $790,000 to $850,000 guide.
But in a potential win for the aim of Labor’s reforms, Mr Cortous said the agents were in negotiations with first-home buyers to purchase the property.
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