Analysing the Impact of Taxes and Other Influencing Factors on Housing Prices in Australia
A very recent report, however, by ABC News, in its website ABC News Online dated May 14, 2007 (2:33 pm AEST), states a reversal of the stable market. The headline says: “Government policies, charges ‘stifling’ housing growth.” The report says that “the Property Council of Australia is warning of a looming housing shortfall as prices and taxes increase.” The surge in median house prices in the last seven years has shut many people out of the market, ABC News quoted the Council as saying. The report however is on Western Australia and not on the whole of Australia, but still, there has to be a concern to avoid a possible downturn.From a stable property market, there is a trend of slowing down due to circumstances or causes that are the primary focus of this study. However, the situation may not be serious. The causes will be enumerated in the literature review.The property market in Australia is a major source of wealth creation for investors, contributing to the socio-economic well being of all Australians. The Real Estate Institute of Australia states that in the financial year 2005/2006, property sales totaled $186.1 billion. The Institute further said that 67% of Australians owned their houses and 28% rented on the private market. Property affects everybody in Australia. Those who are renting their houses and those who own their houses are a subject of surveys by the prominent institutions in Australia and even from outside Australia.Over the past years, right after the 1991-1992 economic recession, there has been a stable residential property market in Australia. But there is a growing defect that the Property Council of Australia has warned in its latest press release. This pertains to the higher taxes imposed by the government.This study will examine the underlying growth on the property market of Australia and the impact of the higher taxes.