Page 974 - Week 04 - Wednesday, 17 June 1992
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Rents have increased despite the reduced cost of rental investment, with the cost of an investment loan being reduced by 7% in the last two years. For a loan of $100,000, this is a reduction of $7,000 per annum in interest costs. Despite good levels of capital gains and lower costs, investors have kept rental returns at a high level.
The low vacancy rate in the ACT reflects mostly an increase in demand for rental properties, due to an overall increase in population, increasing numbers of students in tertiary education and also to short term factors including the one-off re-allocation of defence personnel (some 300 families) to the ACT, as a result of the completion of the Defence Signal Directorate in May 1992.
It is assessed that the impact of land tax has been minimal. The increase in rents (about $15.00 per week) in the six months to February 1992 cannot be attributed to the impact of land tax. Strong demand in the rental market has allowed investors to capitalise on the low vacancy rate, reflected by the continuing strong demand for investment property. The. movement in rents, investment and demand continue the trends established prior to the introduction of land tax and there is no demonstrable impact on rent levels for low income private renters due to the land tax.
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