Page 1436 - Week 06 - Tuesday, 11 August 1992
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first introduced. We were told then by the Liberal Party that it would be the end of private investment in the Canberra housing market. It would be the end of private tenancies. You would not be able to find a private investment property in Canberra because we were forcing private investors out of the Canberra market. As they know, because I set it out in answer to question on notice No. 27 from Mr Cornwell, that is absolutely not what happened. In August 1991, just before this tax was introduced, investors made up some 11 per cent of activity in the home purchase market in Canberra. In February 1992, when the tax was in place, when the Libs had been belting this for all it was worth during the election campaign, investors accounted for 25 per cent of all residential properties - a much higher rate of activity.
The housing market in Canberra as a whole has been booming along very nicely, thank you very much, since this Labor Government came into office, to the point where the Housing Industry Association put out a press release recently warning against an overheating of the home market in the ACT, saying that it was going along too strongly. So the rate of investment has increased. More investors are entering this market than were entering it 12 months ago - directly opposite to what you said would happen. You people said that the vacancy rate in the ACT would fall to virtually nothing. Again according to the Real Estate Institute of Australia, Market Facts, issued on 31 July 1992, the vacancy rates are now 3.4 per cent - one of the healthiest rates for quite some years. The generally accepted healthy vacancy rate for a balanced market, the industry says, is 3 per cent. So we are almost verging towards an oversupply of private rental investment properties in the ACT - directly opposite to what these people said last year would happen.
Madam Speaker, they simply cannot be taken credibly. In the time that rents have gone up, the average investor in a $100,000 investment property has had a benefit of something like $7,000 a year as a result of reduction in interest rates. None of that, not one cent of it, has been passed on to tenants. Investors in rental property take what the market will bear. That is always the case. That is the nature of this market. The movement in prevailing market rates has not varied in this market from that in any other market. It varies depending on vacancy rates, and - surprise, surprise - now that vacancy rates are getting higher, the movement in the prevailing level of rent, which is shown again in Market Facts, is easing back. But there was no passing on to renters of that enormous gain - $7,000, on average, on a $100,000 investment property - that investors have taken because interest rates have fallen. They have claimed that they have had to pass on rent increases to tenants. They have not passed on savings, and that is hardly fair practice.
MR STEVENSON (4.16): Madam Speaker, I believe that the time allowed for the MPI has expired. I therefore move:
That so much of the standing and temporary orders be suspended as would prevent discussion on the matter of public importance from continuing for a further 20 minutes.
I know that there are a number of speakers still to come on this matter, which is indeed important.
Question resolved in the affirmative, with the concurrence of an absolute majority.
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