Melbourne’s 761 property auctions were a return to form after the Easter and ANZAC weekend slump, up from 690 the same weekend a year ago with a 73.4 per cent clearance rate the highest in two months. Strong performance from the outer east suburban region reflects an area of market growth over the last year. Read the full story here.
Auction clearance rates falling in Sydney
While Sydney’s home auction market volume returned to form this weekend with 631 properties going under the hammer, weekend clearance rates fell below 80 per cent for the fourth consecutive weekend. Observers consider attributing this to a record number of listings in mid-April and the holiday distractions of the past fortnight. Read the full story here.
Housing prices leave South Australia’s unemployed trapped
The loss of 1000 jobs with the closure of Holden’s activities in Victoria leads to an examination of unemployment issues in the region. A combination of high housing costs across Australia, stagnant prices in SA and local family ties for unemployed workers makes them less likely to leave their existing residence, even if jobs are available elsewhere. Owning a home in SA may, perversely, lead to less mobility because of the difficulty in finding comparable affordable housing elsewhere. The Productivity Commission identified Playford–Elizabeth as one of the country’s worst areas for persistent unemployment, even before Holden exits the country. Read the full story here.
Home ownership rates are falling in Queensland
Despite increases in residential construction permits over the year, home ownership in Queensland has fallen from 32.1 per cent to 29 per cent over the last decade. “Narrowing the national housing supply gap will require sustained long-term effort to increase the number of dwellings we build as a nation,” said Federal Social Services Minister Kevin Andrews. Read the full story here.
Negative gearing tax treatment under review in budget discussions
Negative gearing on property investments represents about $13 billion in untaxed revenue due to investment property loss offsets and eliminating the tax break would lead to more stable and sustainable house price growth and a higher proportion of first time buyers. “There is a strong argument to scrap the tax break,” but doing so would “be an unpopular decision and might damage house price growth in the short term.” Read the full story here.
Negative gearing: keep your mitts off the tax deduction
Columnist Judith Slone argues that changing the tax treatment of negative gearing as is being discussed would produce little change in the market’s behavior and exists in other forms in places like the United States. “The principle that the costs associated with investing are tax deductible is near-universal around the world. … do we really want to deter people from investing in assets? After all, the tax deductibility of the costs of borrowing to purchase an asset covers all assets, not just residential property.” Read the full story here.
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