The impact of last week's Brexit decision on property markets in the United Kingdom and across the globe could take longer to materialise... Survey says investors to sell up if negative gearing changes go ahead...
Property market likely to be spared Brexit blow
While last week’s Brexit decision resulted in immediate turmoil across global financial markets, the impact it has on property markets in the United Kingdom and across the globe could take longer to materialise.
Since the shock decision at the referendum last week, trillions of dollars have been wiped from global equity values while the strength of the British pound has plummeted to its lowest point in three decades, but it appears property markets will remain relatively stable for the time being at least.
In a statement released after the decision, major real estate franchise LJ Hooker said Australia’s property market would not see any immediate Brexit impact given that property is not an asset that can be traded quickly.
“This result will have very little effect on our property markets over the next week. Real estate is not as volatile or liquid as equity, currency or commodity markets. This means they cannot be ‘sold off’ or react at the same speed,” the LJ Hooker statement said.
“The key indicators to watch in the short term are buyer enquiry volumes and property appraisal numbers; these will tell us if market confidence has been affected.”
More than half of one state’s property investors would abandon the asset class if Saturday’s election ends with a Labor victory.
Survey says investors to sell up if negative gearing changes go ahead
According to a survey conducted by the Real Estate Institute of Western Australia (REIWA), 55% of Western Australia’s current real estate investors would leave property if negative gearing changes, like the ones Labor are campaigning on, are introduced.
REIWA president Hayden Groves said that while rental conditions in the state are currently well in favour of tenants, that would easily change if such a large portion of investors deserted the market.
“While rental affordability in Perth is currently at an all-time high, in the long term we’re likely to see a significant impact on rental supply and affordability should negative gearing be removed,” Groves said.
“In the eighties when negative gearing was abolished, quarterly data shows that rent prices increased as much as $34. Those who rent will most definitely be worse off if negative gearing is removed or restricted,” he said.
According to Groves, there are around 175,000 rental properties across WA and the government would not be able to make up any shortfall in rental supply if investors leave the market.
(Your Investment Property)
While last week’s Brexit decision resulted in immediate turmoil across global financial markets, the impact it has on property markets in the United Kingdom and across the globe could take longer to materialise.
Since the shock decision at the referendum last week, trillions of dollars have been wiped from global equity values while the strength of the British pound has plummeted to its lowest point in three decades, but it appears property markets will remain relatively stable for the time being at least.
In a statement released after the decision, major real estate franchise LJ Hooker said Australia’s property market would not see any immediate Brexit impact given that property is not an asset that can be traded quickly.
“This result will have very little effect on our property markets over the next week. Real estate is not as volatile or liquid as equity, currency or commodity markets. This means they cannot be ‘sold off’ or react at the same speed,” the LJ Hooker statement said.
“The key indicators to watch in the short term are buyer enquiry volumes and property appraisal numbers; these will tell us if market confidence has been affected.”
More than half of one state’s property investors would abandon the asset class if Saturday’s election ends with a Labor victory.
Survey says investors to sell up if negative gearing changes go ahead
According to a survey conducted by the Real Estate Institute of Western Australia (REIWA), 55% of Western Australia’s current real estate investors would leave property if negative gearing changes, like the ones Labor are campaigning on, are introduced.
REIWA president Hayden Groves said that while rental conditions in the state are currently well in favour of tenants, that would easily change if such a large portion of investors deserted the market.
“While rental affordability in Perth is currently at an all-time high, in the long term we’re likely to see a significant impact on rental supply and affordability should negative gearing be removed,” Groves said.
“In the eighties when negative gearing was abolished, quarterly data shows that rent prices increased as much as $34. Those who rent will most definitely be worse off if negative gearing is removed or restricted,” he said.
According to Groves, there are around 175,000 rental properties across WA and the government would not be able to make up any shortfall in rental supply if investors leave the market.
(Your Investment Property)
