The keys to Saint Mary’s Catholic Church in South Brisbane will be handed back next month as sacked Father Peter Kennedy declares he’s leading a church in exile. The congregation is preparing to move 200 metres down Peel Street to the TLC building, with a minor refurbishment to occur to better accommodate the services.
We see realestate.com.au has today finally launched its new site for mobile phone access. The content is a reformated version of the same stuff you can see the old fashioned way (on your desktop!) but with the growing numbers of big screen phone owners REA wanted to upgrade the look and feel for your iPhone, Blackberry etc. We’d expect to see a lot more for sale signs on front lawns quoting the property ID number so buyers and tenants can get a drive-by viewing!
Anna Bligh last night became the first Australian woman to be elected as a state premier, with many attributing her historic win to Queensland’s graduation from being seen as the backward state. To long term South Brisbane residents, Anna is a local whose kids attended West End State School where she attended school functions and sent her boys to have their hair cut in Vulture Street.
If you’re going to do a thorough review of Australia’s taxation system then everything’s got to be reconsidered. So with Treasury head Ken Henry’s rummaging around in the tax-breaks closet we weren’t surprised to hear negative gearing again pulled out for discussion. One of our landlord clients rang us concerned, online investor blogs have started a nervous chatter and the weekend’s Courier Mail headlined with “Negative gearing attacked for driving up property prices”.
What is it? The ATO says “A rental property is negatively geared if it is purchased with the assistance of borrowed funds and the net rental income, after deducting other expenses, is less than the interest on the borrowings“. So it costs more for you to own the property than a tenant will cover with rent payments.
Okay so we’re real estate agents, we have a vested interest in encouraging property investment. But so does the 32% of Australia’s population that rents. Who will provide their housing if we discourage investors?
A recent get-together of unions, welfare reps, conservationists and consumer groups discussed the Henry Review. The group, calling themselves “Community Tax Forum”, says Australia is a low taxing nation. Blaming negative gearing for high home prices their spokesperson said, “There’s no doubt we’ve got the most generous system in the world for rental investors”. Maybe they have images running through their heads of wealthy old landlords banging on poor pensioners’ doors demanding more rent…
The Real Estate Institute prepared a paper on the topic as far back as June 2008. Their findings: 72% of property investors using negative gearing earn $63,000pa or less. Just 11% earn over $95,000pa. Most are Mum and Dad investors building their retirement nest eggs. The Property Council says negative gearing costs the tax man $2billion a year, but taxes on property generate $29billion.
Of course Paul Keating had a crack at this tax break in July 1985, limiting a property investor’s interest deduction to that property – that is, not letting them claim the loss against other income. Either people forget too easily or they choose to ignore history’s lessons. Following the 1985 change new housing construction plummeted and rents rose 32% in Brisbane, 37% nationally. By 1987 Mr Keating had backflipped and rental supply eventually caught back up to demand.
Property investments don’t stay ‘negative’ as rents rise and principals are repaid, and at some point they’re sold with capital gains tax incurred by the investor. So in time the Treasurer will get his pound of flesh. And in the meantime our nation’s tenants can enjoy more reasonable rents.
Despite our role as real estate agents we would welcome your opinion! Do you agree with tax breaks for property investors?
Fresh back from a seminar today with leading market commentators RP Data, here’s a bunch of recent stats we noted down: Brisbane’s current rental vacancy rate is just 1.3%. That works out to less than 5 days per year so Senior Research Analyst Cameron Kusher says that’s just people moving in and out – with no real vacancy at all.
We’re now Australia’s second most affordable capital city for both apartments and houses (last year’s 3.4% drop in our median house price helped) and Cameron says while rental yields are growing investors are generally still thin on the ground. And while we all saw a big slowdown in property across Brisbane last year RP Data confirmed how few sales actually occurred: Our sales volumes for 2008 were down 84% on our ten year average!
In a Laundromat: AUTOMATIC WASHING MACHINES: PLEASE REMOVE ALL YOUR CLOTHES WHEN THE LIGHT GOES OUT; In a London department store: BARGAIN BASEMENT UPSTAIRS; In an office: WOULD THE PERSON WHO TOOK THE STEP LADDER YESTERDAY PLEASE BRING IT BACK OR FURTHER STEPS WILL BE TAKEN; In an office: AFTER TEA BREAK STAFF SHOULD EMPTY THE TEAPOT AND STAND UPSIDE DOWN ON THE DRAINING BOARD; Outside a secondhand shop: WE EXCHANGE ANYTHING – BICYCLES, WASHING MACHINES, ETC. WHY NOT BRING YOUR WIFE ALONG AND GET A WONDERFUL BARGAIN?; Notice in health food shop window: CLOSED DUE TO ILLNESS; Spotted in a safari park: ELEPHANTS PLEASE STAY IN YOUR CAR; Seen during a conference: FOR ANYONE WHO HAS CHILDREN AND DOESN’T KNOW IT, THERE IS A DAY CARE ON THE 1ST FLOOR; Notice in a farmer’s field: THE FARMER ALLOWS WALKERS TO CROSS THE FIELD FOR FREE, BUT THE BULL CHARGES
It’s been announced in Business South Bank’s ‘Connected’ newsletter that John Kotzas has been appointed as the new Director of QPAC. John takes charge at an exciting time for QPAC following the completion last week of the $34 million refurbishment.
In February I commented on Silhouette in South Brisbane as being tightly held (owners not selling for extended periods) – but I’ve since found a building with even less turnover. Park Avenue in South Bank is a boutique building of just 56 apartments nestled amongst the South Bank Parklands and adjacent to the Goodwill Bridge. The last sale there was Apt 38 which sold in June 2001 for $1.1m. We don’t see them available often, but a 2 bed, 2 bath has been on the market since January this year for $1.25m.
Carpe Diem….seize the day as Walt Whitman wrote! If poetry’s your thing and you’d like to see how they do it in West End, drop by Ahimsa House at 26 Horan St on Sunday March 29 from 2- 4.30pm to hear “The Kurilpa Poets”. Their feature poet for March is Co-convenor of The Kurilpa Poets, and one of Brisbane’s gifted kavi (poet[s])-Vijan (Vij) Chandra. In his poetry Vij Chandra explores human relationships, the loneliness in a crowd, the wistfulness of fleeting unions, the pining for love, the endless waiting to fulfill dreams, and the urgent, mortal necessity to live life to the full.
West End's "Bicycle Revolution"
According to the song there’s 9 million bicycles in Beijing, and it seems we’re almost at that number in West End – especially on a Saturday morning. Yes, I’m guilty of very nearly running down one of them early morning last weekend near West End’s Bicycle Revolution as it happens. My apologies again if that was you! Alberto’s Shot seems to be the place to finish up for the morning ride – and why not? The coffee is great and the atmosphere matches. There are a number of nice bike routes around Brisbane for amateurs like me as well as the lycra wearers. I haven’t had the bike out for a while, but I have ridden between West End to the city via South Bank just for fun.
