19 May 2017

Family-owned local building company in liquidation after 30 years servicing North Queensland

Image: Nu-Lite Glass Aluminium logo 

Liquidators have moved on another long-standing Townsville family-owned business that has been manufacturing, supplying and installing building products for 30 years after collapsing with close to $2 million in debts.

Nu-lite Glass and Aluminium has been experiencing significant reductions in business activity and increased competition, causing a dramatic reduction in the company's cash flows over the past few years.

The family had no option but to appoint liquidators BRI Ferrier on 27th April as any hope of trading out of the debt was unfeasible, despite feeding the company with their own resources during these tough economic times.

IN the midst of more unfavourable construction data coming from the banking sector, Townsville's businesses in the building industry are feeling the pain. A Bank West assessment of the industry found that; "Housing construction revenue is anticipated to fall by 6.2 per cent in the year ending June 2017".

"Mining regions will also see reduced housing construction, as the population in these regions falls. Multi-unit apartment revenue is expected to fall by 17.3 per cent over the same period, as new construction over the previous five years has exceeded demand requirements", Bank West Executive General Manager, Sinead Taylor reported.

The family-owned business has been supplying domestic and commercial customers in Townsville and as far out west as Julie Creek, hundreds of kilometers from Townsville, with glass, aluminum doors, windows, shower screens, wardrobes, mirror, security screens ever since the mid-1980s.

The business offered free quotes and was always willing to provide free advice and guidance to hundreds if not thousands of local businesses and residents.

For many years, the company's branding and operations could be seen by locals driving by their prominent warehouse located at 125 Dalrymple Road, Garbutt.

The company employed 16 permanent and casual staff who are expected to receive most of their entitlements under the Federal Fair Entitlement Guarantee scheme, such as wages and annual leave, but with limited assets to receive superannuation disbursements, Mr. Humphreys from BRI Ferrier reported.

Any other unsecured creditors are unlikely to get anything from the collapse.

Widespread failures in the building industry are not occurring according to, the Housing Industry Association report to The Mercury - www.themecury.com.au).

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18 May 2017

Real truth about negative gearing changes in the Morrison federal budget

The federal budget captured the concerns about housing affordability, particularly in the capital city markets, so it was inevitable that the volume of measures that were announced would substantially impact the housing sector.

Essentially, the policy announced can be divided into supply and demand perspectives so Townsville investors and owner occupiers can appreciate the depth and breadth of changes affecting their respective situations.

With respect the negative gearing, which the government and some media outlets had claimed were untouched in the federal budget, will have "a major impact on investors", Mr. Beer, CEO BMT Tax Depreciation said in his media release.

Mr. Beer reported; "This change will have a major impact on investors, essentially reducing the annual deductions they can claim therefore reducing their cash return each year. This could lead to investors being in a tighter financial position and may discourage future investors from purchasing a second-hand residential property."
A summary of the changes include from a demand perspective;
  • First home super saver scheme allowing First Home buyers to salary sacrifice their income directly into their superannuation account limited to $15,000 per annum capped at a maximum of $30,000
  • Capital gains tax concessions have remained untouched
  • Banking industry changes including; change to the Australian Prudential Regulatory Authority (APRA) aimed at minimising investors seeking funds outside the banking sector and in demographic areas of higher risk such as declining regional markets where Loan to Value Ratio (LVRs) are unfavourable
  • The big four major banks plus Macquarie will be levied 0.6 percent on bank funding with likely increase in interest rates passed on to borrowers to recoup costs      

Supply perspective:
  • Seniors over 65 years of age can now sell their principal place of residence they have lived in for a minimum of 10 years and make non-concessional contributions up to $300,000 into their superannuation account outside the existing caps. 
  • The Affordable Housing Agreement with States will be amended to promote better local town planning and to ensure housing targets are achieved from the unchanged funding of $1.3 billion per annum.
  • A Commonwealth Land Registry will be created to identify government owned land for residential development. 127 hectares has been released in Victoria for 6000 new dwellings
  • Infrastructure spending of $70 billion ($50b more than the last budget) between now and 2021. This is an extensive plan but negligible spend is planned for the Townsville or North Queensland region. Queensland's Bruce Highway repairs amount to $844 million mainly in the Southeast corner.
  • Implementation of the Smart "City Deal" aimed to provide better coordination between governments to improve town planning and land management for maximum affordable housing development, currently operating in Townsville, Western Sydney and Launceston
  • A new National Housing Finance and Investment Corporation is being set up to provide low-interest long-term funding to community housing, using bond markets instead of the more expensive bank markets aimed at community housing providers such as local and state governments
  • Investors will not be able to claim travel associated expenses, likely to impact regional investors the most.
  • Claiming depreciation of plant and equipment such as dishwashers, hot water systems, etc.;  Investors can claim deductions only on plant and equipment they purchase directly, rather than plant and equipment purchased by the previous owner. This could impact investment activity in second-hand stock, slowing investment demand but possibly directing investors to upgrade to new stock prompting more unfavourable supply in the market.
  • A new $5,000 levy on foreign owner properties left vacant at least 6 months over 12 month period
  • Foreign owners and temporary residents are exempt from capital gains concessions
  • Developers can no longer sell more than 50% of project stock to foreign investors

Property owners that have purchased assets before the 9th May 2017 will be able to claim depreciation as per normal.

The property owners and investors of Townsville North Queensland have been left with more questions than answers from this federal budget.

With this fresh analysis undertaken by TREN, the property owners and stakeholders of Townsville North Queensland can forge a conclusive understanding of the impact of the federal budget on local real estate investors and owner-occupiers. 

Do you have an opinion about the federal budget or negative gearing? The TREN community wants to hear your story.

Become a subscriber to TREN eMagazine and be the first to receive local breaking stories, analysis and opinions on the Townsville real estate market. It's free to join now.

    17 May 2017

    Botched media coverage or Turnbull spin?; negative gearing in federal budget

    Image 1: Sydney Morning Herald website 

    Now that the fine print of the Turnbull-Morrison federal budget has been digested, the real extent of the damage likely to impact property investors can be brought to light for full consideration.

    Even though the Turnbull government must negotiate the Federal Budget Bill through the Senate, the nominal federal budget measures announced on the 9th May addressing housing affordability also captures negative gearing to produce cost savings in the budget,  and likely, the beginning of massive reform of the taxation system.

    The Australian Institute of Company Directors (AICD) said; "negative gearing has lead to ineffective tax outcomes and, in part, distortions in the housing market. The AICD also went on to claim that negative gearing encourages investment in relatively unproductive assets, such as existing residential property. Negative gearing should be reformed so that it applies only to productive assets", (Business Insider, 4th April 2017)

    These measures will hit property investors in ways that will be more detrimental than the anticipated losses of the main housing affordability packages announced, as reported by TREN in Turnbull Federal Budget could wipe out Townsville property owner.

    In addition to the aim of government cost savings, this budget was a typical Turnbull-Morrison smoke and mirrors announcement, just like the federal funding announced for the North Queensland stadium, Townsville sold out by Turnbull smart city deal.

    Instead of coming clean on the reality of the productivity savings for business and government through an innovation program in the detail of the smart "city deal" in Townsville, its purposeful dual announcement focused on the alluring message of more federal money for infrastructure.

    As predictable as ever, the mainstream media headlining the Turnbulll message that "negative gearing is untouched" leading up to the budget, was reported as "fake news".

    The Sydney Morning Herald was embarrassed and discredited and have since completely removed the article from their website, as shown in Image 1 above.

    The Turnbull brand of politics and his business-like ethics to win at all costs brings into perspective the Morrison federal budget that its principal aim is to capture an overwhelming number of voters susceptible to "click bait" marketing, deceiving the public.

    Directing the social media spin towards the naive "bleeding hearts", green and traditional left-wing labor constituency are child's play in the contemporary technology age.

    After all, Turnbull is ambitious and conscious of colonial history. He admires the greatness of that era and is hungry to be remembered by the people and historians as a great Prime Minister, etching his place on the monuments of Westminster square along with Winston Churchill, Gandi and Abraham Lincoln. While Morrison wants the prime ministership handed down to him in traditional succession.

    Holding onto power is what this budget says more about Turnbull's legacy than the dreams and hard work of risk-taking investors and small business owners, who have been the backbone of Australia's economy for multiple decades like the venture pioneers before them.

    On one hand the AICD encourages the abolishment of negative gearing all together because it allegedly supports unproductive housing assets, yet on the other hand, it demands lower company taxes, higher GST and personal tax. Nearly 80% of businesses fail in their first 3 years of start up rendering a substantial burden on the economy, taxation revenues and insurance premiums.

    Either the Turnbull-Morrison government leaked and mislead the media leading up to the budget announcement on May 9th, or the blatant inaccuracies in the mainstream news reporting has shone a bright light on the "fake news" phenomenon of the post-Howard and Bush era of distrust and now the launch of the digital revolution.

    TREN has compiled examples of the mainstream media who reported that negative gearing has not been touched in this budget. This news content is consumed, believed and in many cases decisions made by ordinary Australians based on the twisted reality of profit-oriented media conglomerates, or left-wing social science campaigners such as Crikey, Get Up and the New Daily to name a few.

    No doubt Turnbull is knowledgeable of the fact the majority of people are watching the mainstream media, especially engaged investors, home buyers, and renters. The massive increase in the number of people that get their news from social media has become a cultural characteristic of modern times where the "quick bite" headline is all that matters.

    To start with, the article by the Sydney Morning Herald (SMH) that reported "Negative gearing to remain untouched", prompted an embarrassing retraction in light of the real truth about negative gearing in this budget.

    "Sorry this page could not be found (404 error) displayed in Image 1 above is what is displayed for its readers on their website. However, this article in Image 2 shows the subliminal caption of the negative gearing untouched message. 

    Image 2: Sydney Morning Herald website

    Perhaps one mainstream media outlet getting it wrong is forgivable, and maybe two, but to see multiple mainstream media outlets reporting that negative gearing has not been effected in this federal budget rings alarms bells.

    How could the media get this reporting so wrong?

    The integrity and credibility of journalism and editorial oversight in Australia and across the world is manipulated both by governments and media outlets pushing a social agenda. Unfortunately, the mainstream media has botched the reporting of this federal budget.

    Or does it provide answers more so about the Turnbull brand and how politics and Australian interests have become a social sideshow across the world, congruent with the material influence of United States politics?

    From these examples, the reader can draw their own conclusions about it being about a simple consumer choice, or whether it is a broader conclusion about the health and wellbeing of Australia's liberal democracy, a democracy built on courage, freedom, mateship and hardwork.

    Some liberal commentators argue that courage, freedom, mateship and hard work is not just under threat but these values have been eroded and denigrated to the point that the very institutions that have helped our democracy function during peace time, promoting opportunities and keeping the people safe and secure have lost their integrity and real meaning. 

    The federal government, few educated professionals, and some of the national mainstream media institutions have got it wrong this time.

    Below are examples of the misreporting or "fake news".

    Image 3: ABC News website

    Image 4: The Daily Telegraph website

    Image 5: News Ltd website

    Image 6: The Guardian website

    Image 7: The New Daily website

    Considering the fact these headlines and wrap ups occurred prior to the actual budget announcement, and knowing that politicians seek to control the public message to maintain momentum in the delivery of key policies and election cycles, the likelihood is that the Turnbull government and their "spin doctors" set up the media.

    The following media outlets even reported negative gearing would be untouched on the day of the budget or after the budget papers were released to the media, which suggests poor journalism or a blatant use of "fake news" to push a social agenda.

    Image 8: Crikey website

    The property owners and investors of Townsville North Queensland have been left with more questions than answers from this federal budget.

    With this fresh analysis undertaken by TREN, the property owners and stakeholders of Townsville North Queensland can forge a conclusive understanding of the impact of the federal budget on local real estate investors and owner-occupiers. 

    Do you have an opinion about the federal budget or negative gearing? The TREN community wants to hear your story.

    Become a subscriber to TREN and eMagazine and be the first to receive local breaking stories, analysis and opinions on the Townsville real estate market. Its free to join now.

    12 May 2017

    Townsville governance organisation structures damaging to investment pipeline

    Townsville Enterprise acting vicariously for the Townsville City Council, is boasting about the significant economic stimulation that the Adani project, rail and port upgrades, military deal with Singapore, solar energy projects, stadium project and the "Smart City Deal" are going to inject into the local economy.

    Although a noticeable inflow of jobs could occur during the construction of these mostly industrial and infrastructure projects, the majority of the stimulus and ongoing gross domestic product (GDP) will occur in districts outside of the Townsville City boundaries.

    Adani's coal operations are located in Central Queensland, west of Mackay, and the port is located in Bowen as part of the Whitsundays district. Even the proposed military base for the Singapore Army is located in the Charters Towers district, not Townsville.

    Although Townsville can claim Adani's head office in the city, once again relatively low ongoing jobs and employment is derived from the mostly management and administration positions.

    With the anti-coal movement alive and kicking, including Australia's banks, advocating against Adani's coal interests, these jobs could still be under serious threat.

    Moreover, the "value add" criteria codified in the Smart City Deal, is the formula from which all future majority federal and state government funding is linked.

    Private capital investments in projects outside Townsville's economic zone such as Adani's coal mine, would not be worthy of critical federal and state infrastructure stimulation in the Townsville rate payer districts.

    The Smart Cities Plan and "City Deal" contract was signed by Council, State and Federal Governments in December 2016. Because of this Darwinian decision, Townsville's civic policies are being hijacked by individuals career agendas within the Townsville Enterprise leadership focusing and advocating on projects outside the "value-add" parameters of the City Deal.

    The Townsville Enterprise focus is "Townsville North Queensland" and not the Townsville districts, meaning its real focus is on council districts across North Queensland rather than an exclusive agency of Townsville City Council and the ratepayers of the City. In addition, the Townsville City Council is seemingly incapable of formulating or delivering commercial enterprise initiatives.

    The lack of real funding for Townsville districts in the recent Dumb federal budget could wipe out property owners, is evidence of the very convoluted organisational model of Townsville Enterprise, Townsville City Council and various advisory boards being established to direct Smart City initiatives.

    If Townsville Enterprise is allowed to continue a convoluted agenda, in light of new smart technologies in government, energy, transport and manufacturing, it will be economic suicide for Townsville district property owners and residents.

    Unless restructured urgently in line with Smart Cities funding eligibility, international entrepreneurship and global enterprise investment pathways, Townsville districts will be neglected in future federal budget initiatives.

    Townsville Enterprise CEO, Patrica Ocallaghan provided a statement to the Townsville Bulletin confirming the federal budget did not address any of the priority initiatives identified in their pre-budget wish list, but pledged to continue working with the federal government on the Smart City Deal.

    Property owners and rate payers are being fooled, as the current disjointed governance organisational framework is cementing Townsville as a social welfare dependent district, instead of fostering major industrial and infrastructure projects with the federal funding criteria set by the "City Deal" contract.

    This federal budget in the context of the "City Deal" contract, is driven by "value-add" initiatives and it is biting property owners where it hurts the most, with reduced cash flows and valuations. This market and government dysfunction could force further value decline in property investments.

    With this fresh analysis undertaken by TREN, the property owners and stakeholders of Townsville North Queensland can forge a conclusive understanding of the impacts from the federal budget from local real estate investors and owner-occupiers. 

    Do you have an opinion about the federal budget? The TREN community wants to hear your story.

    Turnbull federal budget could wipeout Townsville property owners

    Image: Cartoonist, Dave Pope
    The Turnbull-Morrison federal budget could wipe out many property owners who are hanging on to their investment properties in the Townsville district by the skin of their teeth, enduring sustained cash flow and equity declines over the past 5 years.

    Not to mention the property owners (investors and owner-occupiers) whose fate has already been determined, falling victim to the steepest economic and property decline in financial terms in local recorded history.

    Many are local residents that have lost their jobs or businesses, foreclosing with the banks or filing for bankruptcy. The highest occurrence of bankruptcy across the entire country has been experienced in Townsville.

    Significant numbers of property owners are living from hand to mouth constrained by the debt imbalance. They are incurring losses from which negative gearing and a reliance on taxation refunds are their only salvation.

    Despite the Property Council of Australia's (PCA) influence on this budget, the threat at the next election of a more extreme left-wing policy of reducing or eliminating negative gearing, has become a haunting possibility as the country strives for more revenues.

    Green and left-wing extremism are likely to swing ordinary voters against the rise of Trumpism and Turnbullism. More anti-business and anti-corporate campaigns like Getup's malicious campaign against Adani coal is an ideology with heavy domestic and international support.

    Although a seemingly senseless policy to any economist, a change of government, could be the armageddon for property owners if the Townsville economy continues to dance so far out-of-step with national economic trends and federal fiscal policy makers.

    Also, Townsville governance organisations threaten the investment pipeline of the City in the short term, as the Turnbull government has a deep thirst for the "City Deal" mega data deposits from the Internet of Things (IoT) system. Under the contract by Mayor Jenny Hill, the "no data, no deal" is setting Townsville Enterprise up for restructuring or imminent redundancy.

    The federal budget announcements targeting big-ticket infrastructure and taxation concessions using superannuation and negative gearing for managed funds to address housing affordability in Sydney and other capital cities is a dumb policy. This is really irresponsible on Townsville North Queensland given the recent and ongoing pain and suffering.

    Despite Townsville Enterprise foolishly appealing for more new housing development to meet projected population growth, in other words increasing supply, North Queensland and Townsville districts do not need a housing affordability policy at the forefront of the public agenda when business investment and jobs are what is needed the most.

    Instead, a more prudent priority for Townsville district is to seek microeconomic solutions such as the Tax Increment Financing (TIF) scheme, as proposed by the PCA. This is backed up by the Northern Australia Development Facility, with strong and robust relationships, with leading boards and executives of large enterprise both domestically and internationally.

    Apart from births, migrations, and immigration, the focus on value-add industries securing property for development in Townsville's Council district, is Townsville's only leverage under the "City Deal" contract, to attract significant federal and state government investment.

    The New Residential Land Sales and Supply chart clearly shows the surplus land stocks in Townsville districts.

    In his address to the media, the Treasurer Scott Morrison said, "it's not a silver bullet – nor is it intended to be", referring to his federal budget and the media anticipating a fix all budget.

    Ironically, this is exactly what this budget is. A silver bullet for property owners being put out of their misery if these measures strike to achieve more housing affordability in a market plagued by asset value declines.

    Unemployment rates in Townsville are at 11 percent and the broader economy of regional Australia is hurting from the downturn in mining activity and substantial increases in energy prices.

    The centre-point of the budget, being that it addresses housing affordability, could move the sentiments of distressed property owners and buyers to protest and disrupt the political will of what is perceived to be a puppet's play.

    This federal budget reaffirms the concerns of local representatives that the Federal and State governments are capital city-centric. They are driven by votes instead of delivering "a fair go for all Australians", which Mr. Turnbull promised in his preamble to this budget.

    The Turnbull-Morrison federal budget will go down as the most politically safe budget in coalition history. In fact, many commentators are saying it is a labor policy budget with terms like "centralist budget" and "not traditional liberal".

    The Liberals are fully funding social programs such as the National Disability Insurance Scheme (NDIS) and increasing taxes on the banks.

    The banks, of course, have already said they will pass on the cost increases to every mortgage holder in the country. As the big four banks have done in recent times, they are well within their rights to act independently to raise their interest rates and fees.

    Once again for Townsville North Queensland, the people are being asked to pull up the smelly socks of bad government leadership. Meanwhile, a liberal government slips into their fresh uncharacteristically labor-like federal budget cotton socks to attract votes from the capital cities and the left-wing media establishment driven by ratings and polls.

    Even financial and taxation professionals are labeling the budget as a "good strong budget" as there are no additional personal or small to medium size enterprise (SME) tax increases announced. Superannuation by and large has been untouched. 

    Just as the people have grown to expect smoke and mirrors from a political funding announcement, the Turnbull-Morrison duo is being socially responsible and hitting the big end of town just like the Labor opposition policies were proposed to target.

    By design or coincidentally, it is likely Bill Shorten has been taken out of play in this budget. Not only in policy terms. But it is effectively the "Bill Shorten execution budget".

    Shorten's electability, not just as an opposition leader but Labor candidate in the seat of Maribynong, has taken a direct hit with 127 hectares of defense land in his own electorate in Victoria being made available for 6000 new affordable homes under this budget.

    Is Mr. Shorten's political career finished? Mr. Turnbull would hope so, if the cold shoulder he gave him in front of the media the morning of the budget announcement is any indication.

    Putting the political undertones aside, what if Sydney, Melbourne or Brisbane had an unemployment rate of 11 percent with a median house price of $337,000 for houses, and $272,000 for units? Would the federal budget be focused on housing affordability? Absolutely not!

    The House and Unit Prices chart below demonstrates the decline of values and stable affordability environment in Townsville districts. 

    Economic stimulation with tax breaks, grants, and infrastructure investment spending in the regions would be high on the agenda. But not this politically and socially sensitive government.

    Its focus is on self-preservation. Obviously seeking to secure the next election with capital city and regional Victoria and New South Wales voters, who are set to benefit from the new $20 billion rail corridor from Melbourne to Brisbane.

    With a consolation prize of relatively minor funding, allocated to repairs and maintenance to the Bruce Highway and disaster relief from cyclone Debbie, nothing positive from a Townsville perspective can be said about this budget.

    When we look at the median property price for rentals in Townsville, it makes the federal budget's focus on affordable housing look like a joke.

    For example, a three bedroom house in Townsville is currently being rented for $290 per week. This is a decrease in the housing price of 6.5% in the last 12 months, with the housing price already starting from a low base and dropping consistently from nearly $400 per week in 2012.

    Considering the massive uncertainty in the superannuation sector over recent budgets, the mobile and rental accommodation being so affordable in regional Australia, the elderly are anticipated to snap up the $300,000 per person superannuation top-up option in this budget.

    Once again in a Sydney context, this policy might make sense. But in Townsville, adding more supply to an already distressed housing market is like igniting high octane fuel in a fire of despair.

    Unless local governments and marketing experts in Townsville and North Queensland target the elderly in the capital city markets by offering comparable or upsize value strategies such as a clean, affordable and healthy tree-change lifestyle, this budget measure is more likely to be detrimental to Townsville's property market.

    The likely result is more housing supply as our elderly residents will seek to cash in. This breeds more unhappy owners because the further downward pressure will be put on median house prices.

    In addition this budget also, the federal government will establish the housing finance corporation (HFC). From July 2018, the HFC will offer long-term, low-cost finance to community affordable housing providers. Investors are assured to get rental payments from the government with direct deductions from welfare payments transacted to investors.

    It's the $1 billion National Housing Infrastructure Facility (NHIF) that is of particular concern in the hands of an inept local government being charged with developing business cases, to win funding and then administering the funds through community housing contractors.

    Desperate for new home developments that attract increased revenues, council rates and economic stimulation, the NHIF program in Townsville will have Mayor Jenny Hill and Townsville Enterprise salivating at the mouth.

    However, this social housing initiative will be disastrous for incumbent property owners in Townsville based on the accumulated evidence from the NRAS (National Rental Affordability Scheme). The now abolished Labor government NRAS program was a disaster back in 2013, its legacy is still being felt across the City.

    Then, NRAS was the catalyst for the sustained fall in rental prices and subsequent fall in sale prices across the City. This combined with softer global commodity prices and carbon tax policies, Townsville's property economy has been impacted by catastrophic losses ever since.

    Furthermore, affordable housing investors are being offered a possible 60% discount on capital gains if they build new housing projects with the condition of pricing the accommodation below market prices to low-income tenants managed by a community housing provider.

    This is NRAS rebadged! All be it with a 40% less capital write-off, but with a more favourable incentive to control rental cash flow directly from welfare payments or employer direct contributions.

    NRAS created a false economy and drove free market prices down just as the combined housing affordability initiatives are now likely to do.

    The NHIF is based on the UK model aiming to assist local governments to develop new homes and apartment blocks. For Townsville North Queensland, the combined measures of NFIC and NFC are unfavorable with property prices already falling substantially over the past 4-5 years. NRAS Mark II is what this federal budget is delivering.

    But that is not all, a separate Trust is being established by the federal government to encourage both foreign and domestic investors to invest in affordable housing in Australia. 

    On one hand, foreign investors leaving properties vacant are being penalised $5,000 in capital gains in this budget, while on the other hand, the government opens up a larger pie for taxation write offs by directing their attention to public housing infrastructure.

    In principle, this is a smart measure if it were applied to foreign investors directing their capital into regional manufacturing and new enterprise initiatives that create "value-add" to Townsville's enterprise infrastructure. 

    Knowing the influence of Townsville's infamous property development moguls with land to burn (as shown in the New Residental Land Sales and Supply chart above), and a local council habitually grovelling for new subdivision applications, the depth and intensity of the housing affordability measures in the federal budget are bewildering.

    To drive the nail in the coffin even further, property owners who claim travel expenses on their tax returns for inspecting, maintaining or collecting rent on their rental properties will no longer be allowed after July 2017.

    Consider the fact that over 40% of Townsville's total housing supply are rental properties owned by investors, many travel to Townsville to check on their properties.

    With current property yields declining and debt-to-equity ratios increasing, the federal budget is indirectly targeting the 3rd largest contributor to industry output in Townsville's $30 billion economy, this being the "Rental, Hiring and Real Estate" sector at 9.4% (Source: REMPLAN: Dec 2016). This is an industry contributing $2.8 billion per annum to the Townsville economy.

    Under prudent management rationale, this budget would normally bring opposition kicking and screaming. But not a whisper from the incumbent Labor representatives in all local, state and federal seats across the Townsville districts.

    Patricia O'Callaghan, Townsville Enterprise (TEL) CEO, confirmed in a statement to the Townsville Bulletin that the budget did not address any of the priority initiatives outlined by TEL in their pre-budget wish list. Yet she praised the Smart City Deal initiative and pledged to work with the federal government. 

    The property owners and investors of Townsville North Queensland have been left with more questions than answers from this federal budget. With this fresh analysis undertaken by TREN, the property owners and stakeholders of Townsville North Queensland can forge a conclusive understanding of the impact from the federal budget on local real estate investors and owner-occupiers. 

    Do you have an opinion about the federal budget? The TREN community wants to hear your story.

    01 May 2017

    Australia's Reserve Bank Rate Announcement

    North Queensland and Townsville home owners and buyers receive little relief from the Reserve Bank of Australia Board today with their cash rate announcement.

    Australia's Reserve Bank has acted on the cash rate as predicted by most reputable economists and retained rates on hold at 1.50 percent today.

    With inflation trending higher, a rate rise was unlikely with concerns about unfavourable employment figures and stable prices in global trading of oil and the federal budget soon to the released.

    Capital city property prices were a major consideration of the RBA Board as values have increased almost 10 percent since May and August last year.

    Despite recent housing data showing property prices in Sydney and Melbourne easing, causing increasing concerns about negative equity risks in the capital city markets.

    Easing prices in the capital city markets if sustained over longer periods could be factor for the RBA to increase the cash rate later in 2017 or 2018.

    But in the meantime, rates are set to remain on hold unless the economy and jobs growth do not improve economists are predicting, a quarter of whom predict a rate reduction no less than 1.0 per cent.

    From a Townsville and North Queensland perspective, a rate cut would have been welcome news for property owners and buyers to stimulate property market demand and bring a glimmer of hope that a redound in sustained values are on the horizon.