While this weekend has delivered good results for the residentail property market, businesses are being put under pressure as landlords pass on increases in land taxes.
Commercial property agents have said that increases of up to 100% have been passed on, and that they couldn’t come at a worse time.
“Tenants are already looking at the income from their business being squeezed generally, and to have the outgoings go up is just something that they don’t really need,” David Kollias of CB Richard Ellis told The Age.
“Some of the increases are of the magnitude that may see some tenants being forced out of their properties as a result of the 2009 assessments alone.”
Kollias says that in one instance, land tax increases on a property he deals with could increase the tenants’ outgoings by up to $30,000. He also claims a land tax increase in Melbourne has seen one business pay $145,000, more than a 100% increase on previous payments.
Kollias says tenants who take up smaller buildings on large properties will be affected the most.
“When you’ve got a situation where you’ve only got one or two tenants, then it’s effectively $20,000 or $30,000 extra in their outgoings split two or three ways – that’s when it really does make a big difference,” he says.
Auction rates around the country continued to deliver solid results. The Sydney market recorded a clearance rate of 73%, up from last week’s 71%.
But the number of properties up for auction has fallen slightly to 166 from last week’s 172, with the sales totalling $73.6 million.
Melbourne recorded another solid week, but Real Estate Institute of Victoria chief Enzo Raimondo says the market has “clearly shifted to private sales this year with the REIV recording more homes sold privately than the comparable time last year”.
The clearance rate for the city reached 75%, a slight rise from last week’s 74%, while the 254 properties sold reached a total of $154.54 million.
Brisbane recorded a 38% clearance rate with nine properties on the market, while Adelaide managed to record a 20% rate with 10 properties available.
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Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
