The CEO of a leading Western Australian real estate group says a massive 33 per cent collapse in property sales during the March quarter should act as a warning to the state government that an increase in property taxes in recent years has been counter-productive.
Peard Real Estate Group chief executive Peter Peard said property sales in Western Australia fell by 33 per cent from 8,798 to 5,852 during the March 2016 quarter.
“Traditionally, there is a pick-up in sales during the March quarter with property sales generally increasing,” Mr Peard said. “A 33 per cent drop in property sales clearly shows that the real estate sector is in distress.
“Since 2013, land taxes in Western Australia have risen by over 50 per cent and these high taxes have been discouraging many people from buying investment properties.”
At the same time, Mr Peard noted that the state government’s poor financial record and loss of WA’s triple AAA rating has underpinned consumer confidence in real estate.
“In particular, the disastrous mid-year economic review released last December showing state debt would blow out to near $30 billion this financial year certainly had a negative impact on consumer confidence during the following three months and this is underlined by the collapse in property sales during this period,” he said.
“The end result is that there has been a major drop off in property investment activity in Perth and owner-occupier buyers are now very hesitant to make a decision about buying a property.”
Mr Peard said the last 18 months has been a very challenging time for the property sector in Western Australia, with a growing number of people losing jobs in the industry because the revenue is simply not there for companies to employ them.