The Gold Coast property market may be getting an unexpected shot in the arm from the federal election, according to Ray White Surfers Paradise Group (RWSP).
RWSP CEO Andrew Bell says he has noted an emerging sense of urgency among some buyers eager to lock in a purchase sooner rather than later.
These buyers are factoring in a change of government at the next federal election and the likelihood of changes to the tax treatment of investment properties as previously signalled by Labor.
“Elections often create uncertainty in the market, but this time it’ s a little different because of proposed changes mooted by the Labor Party,” said Mr Bell.
“The market is well and truly factoring a Labor victory and the likelihood of major changes to the taxation regime for property owners.
“Many are buying now to take advantage of the grandfathering provisions proposed by Labor for existing properties.”
Labor’s plans include the abolition of negative gearing on established properties and a reduction of the capital gains discount from 50 per cent to 25 per cent.
Negative gearing will remain in place for newly built homes and apartments.
However, for investors who already own properties, the current rules for capital gains tax and negative gearing will still apply.
“The proposed changes are the most significant in a generation for the property market and that’s prompted many buyers to bring forward their plans to step into the market,” said Mr Bell.
“We tapped into this thought process in the planning for The Event at the end of January, which led to an exceptional clearance rate during and following the auction program.”
Mr Bell said the election stimulus has coincided with a cyclical increase in buyer inquiries for Gold Coast property from local and interstate investors.
“We’re certainly seeing an uptick in inquiry from investors keen to buy now before any of the proposed changes are made,” he said.
Mr Bell has warned the proposed changes to property tax rules will impact the broader market, especially for those who are unprepared.
“However, there are significant advantages for those who buy properties before these new laws come into effect,” he said.
“The market is definitely more anxious about what’s coming but there are many buyers looking to lock in their position now well ahead of the changes.”
With a clearance rate of 60 per cent and rising, The Event 2019 was among the most successful RWSP auction programs held on the Gold Coast.
“There are compelling reasons still in play to support the Gold Coast property market going forward, and we don’t believe that will change any time soon,” said Mr Bell.
“Strong migration rates, combined with the strength and diversity of the local economy should see buyer activity hold up well throughout the year.”