Page 973 - Week 04 - Wednesday, 17 June 1992

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ANSWERS TO QUESTIONS

MINISTER FOR HOUSING AND COMMUNITY SERVICES

LEGISLATIVE ASSEMBLY QUESTION

QUESTION NO. 27

Land Tax

MR CORNWELL - asked the Minister for Housing and Community Services -

(1) How do you "monitor closely" (the Chief Ministers words in her July 1991 Budget Strategy Statement p 14) the impact of the land tax impost on low income private renters.

(2) What has that impact been in the six months to 1 February 1992.

MR CONNOLLY - the answer to the Members question is as follows:

(1) The impact of the land tax has been monitored through regular assessment of the following:

• the movement of rent in the private market;

• the vacancy rate for rental dwellings in the private market;

• the number of new investors in the private rental market;

• the cost of investment in the private rental market; and

• the number of people who have moved to the ACT.

(2) The medium rent of a 3-bedroom house was about $185 per week in February 1992, compared to $170 in August 1991, an increase of 8.8%. Higher rents have been primarily a result of a consistently low vacancy rate in the ACT, 19o in February 1992, continuing the downward trend since March 1991. The industry considers that a vacancy factor between 2% and 3% is a good balance of supply and demand. The level of demand in the ACT has been high since January 1990 and is the highest in Australia.

Information published by the Australian Real Estate Institute indicates that the introduction of land tax has not discouraged investors from the residential market. Investors accounted for 25%0 of all residential purchases in February 1992, compared to 11 % in August 1991 (21 % on average for 1990-91).

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