Negative Gearing, State & Local Government Taxes and Policies of Critical Concern To Property Developers/Investors
The survey, which canvassed 180 developers and investors across Australia, showed that 84% of respondents surveyed were either ‘very’ or ‘somewhat’ concerned at Labor’s proposed changes to negative gearing rules. Other big or serious development issues for developers included:
- State and local government taxes (73%)
- State and local government policies affecting development projects (72%)
- Finding suitable sites (65%) – for 25% of respondents this was a critical issue
- Cumbersome and lengthy local government approval processes (59%) – for 17% of respondents this was a critical issue
DF Partners’ Principal, Baxter Gamble, said the survey also identified that for more than half the respondents (54%) ‘obtaining finance from their banks’ was one of the biggest issues confronting them at present. Generating enough pre-sales was an issue for 52% while 46% said property buyers being able to obtain funds to settle was problematic.
“Interestingly, 76% of respondents said that in the past 12 months they had investigated obtaining finance from non-bank lenders. Mezzanine, joint venture, preferential equity and overseas funds were all investigated,” Mr Gamble said.
“The major reasons for seeking alternative finance included developers wanting to use less of their own funds (50.6%) and traditional lenders not taking into account previous track record or experience (27.5%).”
When asked how optimistic they were about the next 12 months, just 5.6% said they were very optimistic but 40% were optimistic. Thirty-two per cent were very concerned about the immediate future for Australia.
“By far, the most concerning aspect for the nation’s developers was the potential for a Labor Government to put an end to negative gearing.
“It is quite clear that developers see the possible end of negative gearing as a major roadblock in continuing to attract investors to buy into their developments,” Mr Gamble added.
* NOTES RE THE SURVEY
The survey was in the form of a questionnaire
It was conducted over the course of one month from 7 April
Sample size was 180 of whom 109 are developers and 71 are investors
In respect of developers, respondents represented:
|Private Company (< $5m / year turnover)||42.8%|
|Private Company ($5m – $20m / year turnover)||16.1%|
|Private Company ($20m – $50m / year turnover)||5.0%|
|Private Company ($50m+ / year turnover)||10.0%|
|Other (please specify)||18.9%|
Could your next project benefit from some expert development finance? Get in touch.
For expert advice:
Level 3, 31 Alfred St
Sydney NSW 2000
P / 02 8916 6246
Level 30/35 Collins Street,
Melbourne VIC 3000
P/ 03 8692 0082
Level 18, 175 Eagle Street
Brisbane QLD 4001
P / 07 3041 4136
Featured articles /
- Presales affecting property developers and how you can overcome the pre-sale hurdle.
- Our Domestic Credit Squeeze – The Perfect Storm and Opportunity for the RBA & Property Developers
- How property developers can thrive in a changing economy
- Development Finance Partners recognised as one of Australia’s most innovative and fastest growing companies
- CREDIT ALERT – “THE PARTY IS OVER”