Three measures could undo SA property sector warns industry leader
SOUTH Australia may be able to boast the highest the nation’s highest level of property sector confidence for the sixth consecutive quarter but recent state legislation proposals mean positive sentiment could easily fall off a cliff says a property industry leader.
SOUTH Australia may boast the highest national level of property sector confidence for the sixth consecutive quarter but recent state legislation proposals mean positive sentiment could easily fall off a cliff says a state property industry leader.
The latest ANZ/Property Council survey shows that statewide confidence in SA sits at 144 for the September 2019 quarter, increasing its nation leading position by seven points on last quarter.
“While every state recorded a quarterly increase, SA experienced the most modest uplift across all states despite remaining the most confident market in the nation,” Property Council SA executive director Daniel Gannon said.
“While confidence levels are more than 20 points above SA’s historic average and currently sit 16 points above the national average, recent government decisions will cause significant headwinds over the horizon.”
There are clear reasons why SA confidence levels could soon plummet he said.
The state government’s $120 million land tax aggregation Budget measure will take a sledgehammer to ‘mum and dad’ and institutional investors even before the Valuer General’s statewide revaluation measures kick in he said.
He was equally derisive of SA’s ’s anti-competitive land tax regime, “which at 3.7 per cent for the top aggregated tier is a disincentive to invest or continue to invest in the state”.
The foreign investor tax has remained in the state government’s forward estimates Mr Gannon said despite adding another layer of taxation for investors and homebuyers.
“At a time when forward work schedule expectations are up, state and national economic growth expectations are the country’s benchmark, and house capital growth expectations are an investment lighthouse for the nation, risky tax changes are the last thing we need,” he said.
“Recent announcements in the space and defence industries along the City Deal for Adelaide should be the economic catalyst SA needs.
“However, instead of doubling down on these economic green shoots, the state government is caught up in a jellyfish of destructive land tax changes that could scare off investors and hurt superannuants.”
Mr Gannon said key reforms to maintain confidence levels were needed, including to amend last month’s land tax aggregation proposal and apply a handbrake to the tatewide revaluation initiative, which with a 10 per cent increase would deliver an extra $75 million every year in land tax revenue.