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Property Council Flexes its Muscle in Victoria

(With apologies to real gorillas, who don't benefit at all from property development)

With state Labor parties under the hammer all over Australia, the Property Council has chosen its moment to put pressure on the weak Brumby Victorian Government to lower stamp duty, even though in the recent Victorian budget, changes were made to lower it. The Property Council uses the argument of comparison with the other states to force the change. This is just another race to the bottom where all state governments try to curry favour with the real estate industry big-wigs for donations for the next election campaign.

This article from the Age (quoted below) looks more like a slight edit of a Property Council's press release. At no point is any effort expended by the journalist to examine the issue.

The reality is that adjusting stamp duty does not change the total price someone is prepared to spend. A potential buyer can afford to buy real estate only up to the amount a bank is prepared to lend to them. If a government reduces the property transaction tax (i.e. stamp duty), the potential buyer can still afford the same total amount, but the seller of the property will get more money, and the government's take is reduced by the same amount. The Property Council is a lobby group representing those who transact in real-estate, and whatever communication they put out in the public domain should be seen in that light.

The lobby talks about "competitive advantage" and that Victoria's stamp duty charges are the highest in Australia. Both of these arguments have little merit. Companies and individuals choose to site themselves for reasons other than a few $1000 difference in property transaction costs. Also there is no stamp duty in Victoria on purchases of new houses off-the-plan (pre-construction). This reduces the average stamp duty paid.

It's sad that in a newspaper like The Age there still seems to be a need to pander to real-estate interests even though their classifieds revenue is falling off a cliff due to the successes of dot-coms like realestate.com.au, seek.com.au and carsales.com.au (all non-Fairfax companies !!)

Article from The Age, "Brumby under pressure to cut stamp duty"
Brumby under pressure to cut stamp duty
Related Coverage
* Stamp duty for first home buyers
* Natalie Craig
* September 9, 2008 - 1:43PM
The Victorian Government is under pressure to cut stamp duty after Queensland abolished the charge for first home buyers for properties under $500,000.
- Brumby under pressure to cut stamp duty
- Queensland increases exemption to $500,000
- Victoria now highest charges in nation ...."

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Comments

Thanks, Anonymous, for this article.
I would like to read more from you.
I didn't know that www.domain.com.au wasn't doing as well as realestate.com.au, as you seem to imply here.
I cut out the full quote of the article because of copyright.
Please keep posting.

Sheila Newman, population sociologist
home page
Copyright to the author. Please contact sheila [AT] candobetter org or the editor if you wish to make substantial reproduction or republish.

Oh, also, it's inspiring that the NSW labor party finally, with a lot of help, we might add, from the Liberal Party and the Greens, stood up on its hind legs and got rid of the terrible people governing in its name - Iemma and Costa.

This gives one hope for Victoria and other states. Anonymous observes that the Property Council is applying pressure to the vulnerable Victorian government, but why aren't the members of the Labor Party as well?

Is there no-one decent left in the party?

I am waiting for an article about this. There is one in the pipeline. I wish James would finish it.

Sheila Newman, population sociologist
home page

Fairfax has always relied on the acres of classifieds for most of their revenue, for whatever reason their management failed to use this advantage when the internet came along. Their classifieds are still number one but this income stream is being seriously eroded by the 3 dot coms: realestate.com.au, seek.com.au and carsales.com.au
Maybe in the future papers such as The Sydney Morning Herald and The Age will be transformed into something much smaller and low circulation that focuses on local news with proper analysis that is not coloured by the requirement to fill pages of classifieds.

They own domain.com.au, don't they?

Sheila Newman, population sociologist
home page
Copyright to the author. Please contact sheila [AT] candobetter org or the editor if you wish to make substantial reproduction or republish.

domain.com.au runs a very distant second to realestate.com.au
see:
realestate.com.au Widens Lead Over Second Site to 100%

Of course that is an article on realestate.com.au about its rival.
I would like to have an analysis or at least comments on Neilson's stats.
I would also like to know how both dot coms differ, and how the differ in their approaches, services in the global, local, regional etc real estate markets, and how this has all varied over the property values dive back towards some form or reality as opposed to realty.

Today, on the French news very interesting about Spanish housing market. Dictator Franco, darling of the Pope of the time but generally thought to be a horror, greatly increased housing ownership among the Spanish. Prior to the nutty US & Aust, UK and anglophone-led international property bubble, the Spanish began selling the houses they had bought off the government.

Then the bubble took them to delusional heights of expectation.

Now, three years after the peak in property prices in Spain, real-estate agents and property speculators are on the dole. So are those who found related work, such as photographers working for realtors.

One guy tried to move his 3 bedroom speculative appartment in a lottery but this was short circuited by legality.

Once pretenders to continuously increasing 'wealth', such people are now living with their parents and unable to get prices above the cost of their constructions. They are lucky that their parents have homes.

Land speculation a stupid evil. Australian and State governments have become completely obsessed by it, and democracy has suffered through this. Many societies do not buy and sell land and are better societies for this.

Sheila Newman, population sociologist
home page