14 June 2017
Jennifer Duke via domain.com.au
Housing was a hot button topic for the 2017/2018 federal budget, so it’s no surprise there were a raft of changes for real estate.
The new measures have impacted on a variety of housing rules from first-home buyers’ savings strategies to what investors can claim at tax-time.
Here are the five big announcements to know about.
More supply is just one part of the housing push with a raft of initiatives rolled out in the 2017/2018 federal budget. Photo: Pat Scala
1) Foreigners can only buy up to 50 per cent of a development
Under the new budget rules, developers will no longer be able to sell every property in their new development to overseas buyers.
Instead, a maximum of half the development can be sold to foreign buyers with the rest to be sold locally. The budget documents note this is to provide a “clear message” that new housing stock is expected to increase supply for Australian buyers.
Before this change developers required pre-approval to sell properties to foreign buyers but there was no limit on the proportion of sales.
Effect on revenue: No impact
In place from: May 9, 2017
2) First Home Super Saver Scheme
First-home buyers weren’t ignored by the budget with a new First Home Super Saver Scheme announced. The new super saver scheme will allow first-time buyers to put up to $15,000 a year, to a maximum of $30,000 under the scheme, into their superannuation.
These funds can later be withdrawn for a home deposit, including any earnings the deposits made.
This means they will have a tax incentive to save more, and it can be taken advantage of as a couple with each claiming $30,000.
Effect on revenue: Cost of $250 million ($9.4 million funding given to ATO)
In place from: July 1, 2017 (contributions), July 1, 2018 (withdrawals)
3) An ’empty home’ tax on foreign investors
Foreign investors who keep properties vacant for more than six months will be faced with a vacancy tax. This is described as a charge on “underutilised residential property”.
The cost of this tax will be the equivalent of their foreign investment application fee – some several thousand dollars – and will be charged annually.
This change is intended to get more vacant homes onto the rental market.
Effect on revenue: Gain of $16.3 million ($3.7 million funding given to ATO)
In place from: May 9, 2017
4) Stopping investors from claiming travel deductions
Investors who previously had tax deductions for travel expenses related to their investment property will no longer be able to make these claims.
The government has ruled them out, even for those travelling to collect rent, maintain or inspect a premises, saying many have been incorrectly obtaining this deduction. This has included situations for “private travel purposes”.
Effect on revenue: Gain of $540 million
In place from: July 1, 2017
5) Retirees given incentives to downsize
Australians aged over 65 who sell their home of a decade or more will soon be able to put up to $300,000 in sale proceeds into their superannuation.
This incentive to downsize is expected to help free up larger homes for families to move into.
Effect on revenue: Cost of $30 million
In place from: July 1, 2018
14 June 2017
A new rental affordability study has highlighted the challenges very low and low income households face in Perth’s private rental sector.
The study, Housing Affordability (Rental) – A study for the Perth metropolitan area, looks at rental affordability for households on very low (less than $43,000), low ($43,000-$69,000) and moderate incomes ($69,000-$103,000), and is the result of a second collaboration between the Housing Authority, Real Estate Institute of Western Australia (REIWA) and Shelter WA.
The report found:
- There is insufficient affordable rental options in Perth’s private rental sector, which is placing pressure on the region’s social housing system.
- 35 per cent of Perth rental households fall into the lower income categories, however only 19 per cent of rentals in Perth in the 2015-16 financial year were affordable to very low or low income earners.
- Perth’s rental stock lacks diversity, with over 70 per cent of all rentals across the metropolitan area have three bedrooms or more.
- The central sub-region contains the bulk of affordable rental housing in Perth. It provides 65 per cent of affordable housing for very low income earners and 49 per cent for low income earners.
REIWA President Hayden Groves said all sectors of the property market need to work together to increase the number of affordable rental properties.
The Housing Authority’s General Manager Strategy and Policy Tania Loosley-Smith noted that although the Western Australian property market has been in a cyclical downswing for the past few years, there is still a significant shortage of housing that is affordable for Western Australians on low incomes.
“By a range of measures, this shortage has entrenched over decades and deepened in the last 10 years. It affects our vulnerable citizens, as well as the key workers who are the backbone of our economy,” Ms Loosley-Smith said.
“The Housing Authority is committed to addressing these challenges in order to ensure Western Australian families, our local communities, and our economy thrive. That said, achieving these outcomes needs both Commonwealth and State leadership.”
Ms Loosley-Smith said she welcomed the Commonwealth Government’s commitment to establish a National Housing Finance and Investment Corporation, and its focus on models to increase affordable rentals for people on low incomes.
“Large scale market investment in our rental sector, particularly at the affordable end of the market, is the missing part of the Australian housing continuum and can only be tackled effectively at a national level. This, combined with ongoing funding for the social housing system under the National Affordable Housing Agreement and ongoing State efforts on housing supply and diversity is critical to ensuring that all Western Australians have a place to call home,” Ms Loosley-Smith said.
At the state level, the Housing Authority in late 2016 launched the Assisted Rental Pathways Pilot. According to Ms Loosley-Smith, this innovative initiative provides opportunities for social housing applicants—with the desire and means—to move successfully into the private rental market.
“This Pilot is a unique partnership between the government, not-for-profit support providers and participants. It offers rent subsidies and individually tailored support services for up to four years to help people succeed in the private rental market. The project offers benefits for both participants and landlords, and is important in addressing the key finding of the study—the lack of affordable rentals in Perth, despite a high overall rental vacancy rate.”
Mr Groves said housing affordability was a critical issue for West Australians and the report emphasised the glaring need for a greater emphasis on the provision for affordable, accessible and appropriate housing options.
“It is clear that the current stock of private rental accommodation does not meet the needs of our community and more needs to be done to address the requirement for choice and housing diversity. The planning system needs to mandate and address housing diversity within the WA planning system,” Mr Groves said.
Shelter WA spokesperson Stephen Hall said the research highlighted the lack of accessible and affordable private rental accommodation in Perth for very low and low income households, with only a small number of three or more bedroom properties available to these income brackets.
“This research shows that only a small number of three or more bedroom properties are affordable for lower income families. Shelter WA is concerned that families, especially large families, could be forced to reside in inappropriate and unaffordable housing.”
“It is also concerning that households, on very low incomes, including those on disability and aged pensions, are confronted with so few rental options in the Perth metro area. Seniors and those living with a disability, often already have difficulties in their lives, which can be exacerbated by unaffordable and insecure housing.”
“Improving inefficiencies in the planning system, replacing stamp duty with a progressive land tax, and ensuring social and affordable housing is provided in and around new developments such as Metronet, can improve the availability of affordable accommodation for Perth households,” Mr Hall said.
The Housing Affordability (Rental) – A study for the Perth metropolitan area is a follow up to a study released last November which focused on the impact of housing affordability on home ownership.
14 June 2017
Housing affordability and rental affordability improved in Western Australia in the March quarter 2017, according to the findings of the latest Adelaide Bank/REIA Housing Affordability Report.
The report found affordability in WA’s housing market improved over the quarter, with the proportion of income required to meet loan repayments decreasing 0.9 percentage points to 23.4 per cent.
Affordability also improved over the year, with figures showing the proportion of income required to meet loan repayments in the March quarter 2017 declined by 1.1 percentage points compared to the March quarter 2016.
WA’s rental market was more affordable in the March quarter than it was in the December quarter, with data revealing the proportion of family income required to meet the median rent price decreased by 0.5 percentage points to 18.6 per cent.
Compared to the same time in 2016, the proportion of income required to meet the median rent decreased by 1.6 per cent.
First home buyers
The volume of first home owners in the market decreased by 6.5 per cent in the March quarter to 3,562, and by 1.8 per cent when compared to the March quarter 2016.
The report found that of all first home buyers in Australia, 17.2 per cent were from WA. Additionally, that proportion of first home buyers in WA equated to a significant 31.5 per cent of the state’s owner-occupier market.
The average amount WA first home buyers spent on their loans in the March quarter decreased by 4.1 per cent to $307,800. Affordability in this sector improved further when compared to the same time last year, by 4.9 per cent.
There were 11,301 loans (excluding refinancing) taken out in the March quarter, which is a dip of 6.4 per cent on the December quarter 2016 and 3.2 per cent on the March quarter 2016.
The average loan size amount also decreased in the March quarter, by 3.8 per cent to $337,812. Compared to the same time last year, this figure is down 0.6 per cent.
For more information about the market give us a call on 9475 9622 or email us at email@example.com
07 June 2017
There are fears the launch of a “rent bidding” app will push Aussie rents up even higher. Photo: Jim Rice
Following a lengthy period of falling rents and sharply rising vacancy rates, early signs are now emerging that the Perth rental market may be steadying.
Latest Domain data reports that the median asking rent for a Perth house over April remained at $360 per week, the same as reported over the previous month. Although steady over the month, Perth house rents are 10.0 per cent lower than recorded over April 2016.
Median asking rents for units were also steady at $300 per week over the month but similar to house rents have fallen sharply over the past year – down by 14.3 per cent.
Similar to rents, Perth vacancy rates have also stabilised over April at 3.9 per cent for houses and for units down from 4.2 percent recorded over March to 4.1 per cent. Total vacancy rates for both houses and units combined fell to 3.9 per cent over the month which was the lowest result since March 2016.
Although rents and vacancy rates have steadied over the past month, Perth remains the most tenant-friendly mainland capital with relatively low rents and a wide choice of available homes. By contrast, vacancy rates in most other capitals are generally tight and tightening for both houses and units.
Sydney remains the most expensive capital for tenants with a median asking weekly rent over April of $550 for both units and houses. This is an increase of 3.8 per cent for each over the past year and 52.8 per cent higher than Perth for houses and remarkably 83.3 per cent higher for units.
For more information on property management contact Ron Padua on 0404 428 843 or email firstname.lastname@example.org
24 May 2017
State Treasurer Ben Wyatt today announced the $15,000 First Home Owner Grant (FHOG) for newly built homes will be cut back to $10,000 on 1 July 2017.
Mr Wyatt said the previous Liberal Government’s decision to increase the FHOG by $5,000 in December last year was not an effective mechanism for stimulating additional construction of homes.
“Given the disastrous state of the finances which we have inherited, we need to remove any ineffective spending.
“Ceasing the boost early will allow the State Government to fund higher priority areas while ensuring Western Australian first home buyers continue to be eligible for generous Government assistance,” Mr Wyatt said.
REIWA analysis shows that the introduction of the grant in January 2017 did little to stimulate activity levels in the new-build market.
At the time of the grant increase, REIWA President Hayden Groves said the Institute was concerned the $5,000 boost would widen the gap between established and newly built properties for first home buyers.
REIWA Councillor Suzanne Brown said now that the FHOG is returning to $10,000, REIWA hopes this will help to even out the playing field, albeit marginally, between the established and newly-built market.
“However, there is still work to be done to help first home buyers purchase an established property as the gap remains significant,” Ms Brown said.