There is a heightened anxiety about the upcoming federal budget and its impact on property investment.
Industry veterans have been through past broken promises and policy implementation backflips, but they dread the current weakened circumstances and the gap between intent and outcomes.
Australia’s largest apartment developer Meriton’s Harry Triguboff sees current policy settings “choking both buyers and builders” and warns something has to give.
“The government can surely make the appropriate changes to improve the Australian housing market,” Triguboff suggests.
He argues federal and state governments, the RBA, APRA, “together with builders must find solutions”.
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Meriton’s Harry Triguboff sees current policy settings “choking both buyers and builders” and warns something has to give. Picture: Sam Ruttyn
“The government refuses to understand what the (building) costs are and what can be obtained for the apartments,” he says.
All agree that supply delivery is the mutually desired end result but Charles Tarbey, Century 21 owner, says governments are doing “an outstanding job” at removing “the desire for investment in real estate”.
“The talk of potential changes with negative gearing and imposing changes to the capital gains tax will impact the housing market in ways that will penalise mum and dad investors,” he envisages.
“It will create an environment whereby landlords will be forced to increase rents especially given the current economic climate.
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Meriton is Australia’s largest apartment developer.
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“And it will potentially reduce the value of property, as the value in owning property as an investment becomes less attractive.
“The government will be forced to provide housing, which, as decades of poor control have shown will either be undelivered or delivered over cost, or both.
“Federal and state governments think the answer to resolving ever-increasing government debt is to increase taxes instead of reducing government spending.
“The federal government needs to stop promising change, remove itself from housing promises and blue sky targets, and offer incentives to free enterprise to get housing supply back on track in a cost- effective manner.
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Labor’s housing policy is under fire. Picture: Tim Hunter.
“Unfortunately this is but a pipedream, so basically I have no doubt that investment in property will become less attractive and government debt – our debt – will continually spiral out of control.”
Starting out in a Western Sydney rental, and then buying his first home for $23,500 in Punchbowl, Tarbey has spent five decades in property.
Rumoured investment property tax changes in the budget include the curtailing of negative gearing, although future new house purchases may be exempt.
The speculation on the 50 per cent CGT discount is that there will be partial grandfathering, amid a reversion to the pre-1999 system of taxing real gains adjusted for inflation, with new homes also exempted from the change.
Charles Tarbey Century 21. Picture: Supplied
“We’re not looking at those areas,” Prime Minister Anthony Albanese said in May 2024 when asked on ABC Radio about getting rid of the 50 per cent CGT discount and negative gearing.
“Well, there’s a debate there, of course, about whether that would actually boost supply, but we have no plans,” he said.
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