- Severe rain has caused widespread devastation across the eastern states
- The market has performed well despite rising interest rates
- Mr McKibbin has scrutinised the property tax, especially how it is to be calculated
In his weekly commentary for the New South Wales market, the chief executive officer of the real estate industry peak body, Tim McKibbin of REINSW, has noted that along with ongoing mortgage stresses, natural disasters are having a serious impact on the housing market.
“While there may be some ‘flood fatigue’ in communities not affected, the latest pattern of severe rain has caused widespread devastation and affected the living arrangements of many owner-occupiers and tenants across New South Wales and other parts of Australia,” he said.
“The list of regions under Evacuation Orders or Prepare to Evacuate orders is very long. “The REINSW is working with agents in affected areas and has developed a Disaster & Flood Relief Toolkit for agents, property owners, tenants and landlords. It’s free.”
Steady performance across NSW
Mr McKibbin noted that despite real concerns in the market, it is performing steadily with flat prices and stable clearance rates being the norm over recent weeks, which he expects to continue.
However, mortgage stress fuelled by rising interest rates is affecting more and more Australians.
Three in five mortgage holders are now under financial stress, according to research from Mozo, with this set to increase if interest rates rise to the 5% to 7% range.
“As fixed rate loan terms expire, some people are now paying double the interest they were paying earlier in the year,” he said.
“With more rate rises likely, the level of stress for mortgage holders will only intensify, and more people will begin to experience difficulty in meeting repayments. It’s an issue the market will have to deal with increasing urgency.”
Tim McKibbin, REINSW
Property tax debacle continues
Mr McKibbin also noted this week will see the property Tax Bill continue to be debated, which he has strongly criticised.
“Notwithstanding the obvious point that taxing something makes it less affordable, the basis on which first home buyers are expected to make an informed choice about paying the property tax or stamp duty could not be less clear.
“A consideration of the NSW Government’s own published formula to calculate the property tax payable invites serious questions of transparency.
“First home buyers already face considerable challenges and should not need advanced mathematical skills to decode the charges they are to encounter. How can anyone make an informed decision when faced with such obscurity?”
