The Independent Member for Denison, Andrew Wilkie, is urging the State Government to adopt measures to keep real estate affordable for local buyers including charging extra stamp duty to foreign investors.
“House prices have skyrocketed in Hobart which is great if you already own a property,” Mr Wilkie said. “But for first-home buyers, or those trying to re-enter the market, it can be tough.”
Eyewatering prices in Sydney and Melbourne have sent interstate buyers to Hobart and there is also increased competition from international buyers. The latest data from the Foreign Investment Review Board shows overseas buyers spent $40m on Tasmanian residential real estate in 2015-16 and anecdotal evidence suggests foreign investment has strongly increased since then. The extra bidders and record low interest rates have driven strong growth which has pushed Hobart into 34th spot in the Knight Frank Global Residential Cities Index for property price growth.
Mr Wilkie said governments needed to consider all options to make sure home ownership did not become restricted to high-income earners, or those lucky enough to be born in the right decade or have rich parents.
“Something has to give if younger generations are ever going to be able to buy their first home,” Mr Wilkie said.
Mr Wilkie said the Tasmanian Government should consider following NSW, Victoria and Queensland and introducing a foreign investors’ stamp duty surcharge to make housing more affordable for Australian residents. In these states, foreign buyers pay as much as double the stamp duty of Australian buyers. Other measures to cool residential real estate markets such as Singapore’s additional stamp duty on investment properties should also be considered as well as land tax adjustments.
Mr Wilkie said there also needed to be a discussion nationally about what measures the Federal Government could introduce.
“Some political parties have proposed cutting or axing negative gearing but this can’t be considered in isolation and any reform shouldn’t be retrospective,” Mr Wilkie said. “Capital gains tax should be also discussed.”