Development to slow
CBD residents have been told to expect a slow-down the rate of apartment development.
Speaking to Residents 3000 on May 4, local real estate agent Scott McElroy said the recent change to remove off-the-plan stamp duty exemptions for investors was the most significant of a number of recent changes.
Mr McElroy said the change would affect pre-sales as there would no longer be any incentive for investors to purchase before completion. And, without pre-sales, he said, developers would not be able to get development finance.
“If you’re an investor, you’ll wait until it is built. You’ll be able to see the finished product. The problem is though, it’s not going to get built,” Mr McElroy said.
“The developer won’t be able to get the money. They need pre-sales to get the project off the ground. Most developers need to spend 60 or 70 per cent to get it off the ground.”
“This is something that, over the coming months, could be a real game changer,” he said.
Mr McElroy also predicted that the well-intentioned rule change to exempt certain first home-buyers from stamp duty would merely increase the price of properties.
He estimated that eligible buyers of properties worth less than $600,000 would end up with an extra $25,000 to spend.
“This is a substantial amount of money and I guarantee you it is going to end up in the vendor’s hands,” he said.
“It was no different when the government doubled the first home buyers grant. The minute the grant was doubled, competition increased and values increased.”
Mr McElroy said CBD values were impacted by high levels of investor ownership, Airbnb activity, high owners' corporation fees, potential of being built out, lack of car-parking, building maintenance issues and overall presentation.