Rate Rise Worsens Investment Drought

REINSW President, Mrs Cristine Castle, today called on the NSW Government to abolish land tax on all residential investment and provide stamp duty relief to over 65s to counter some of the impact of today’s interest rate rise by the Reserve Bank of Australia (RBA).

“Even though a 0.25% increase on the standard variable rate of 7.82% on a loan of $250,000 over 30 years will only increase mortgage repayments by less than $10 a week, it will hurt overcommitted families and act as a further disincentive to residential property investors,” Mrs Castle said.

“The residential investment drought hitting NSW is just as real as the drought hitting farmers but fewer property investors means higher rents, and higher rents mean greater inflation and that means higher interest rates. It is an increasingly vicious circle.”

Mrs Castle said the Iemma Government must act now to alleviate the investor drought by abolishing land tax on residential investment.

“The mum and dad investors who purchase a few rental properties to fund their retirement simply cannot cope with stamp duty, interest rate rises, rising land valuations and crippling land tax bills and many of them are asking: ‘Why bother providing affordable accommodation for other needy families when the Government is just bleeding us dry?’,” Mrs Castle said.

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