Agent warns rents will rise and investors shunned
A PROMINENT Gatton real estate agent has labelled the new 'investment property' rate unveiled in the new Lockyer Valley Regional Council budget as unfair and unnesessary.
John Boyd, principal of LJ Hooker Gatton, precicted the decision to post a 20% extra rate levy on investment properties would see rents rise almost immediately.
"The rise will not, and can not, be absorbed by landlords as most rentals are negatively geared and the owners of investment properties are having to find additional funds to make their mortgage payment," Mr Boyd said.
"This will have a major effect on the tenants as rent will have to be increased and both tenants and investors will look to go to other areas such as Ipswich or the outskirts of Toowoomba."
Mr Boyd said he he did not think the rental market was strong enough to withstand any increases.
"It is a backward step for the region and will have a huge detrimental effect on both the investment market and the rental market.
"The major rental market in the Lockyer Valley is students, farm workers and the lower economic members of our community."
He also expressed concern the new rate category would discourage investors from buying in the district.
"The council has not given any thought to the effect that this will have on an already ailing business sector maybe they should have a good look and talk to some of the businesses still operating in the region as we have still not recovered from the floods and there are now more empty shops than ever before."
The new rate category is expected to generate $1.1million in 2015-16 from approximately 4,500 investment properties identified by the council.
LVRC Mayor Steve Jones said the new category, for 'non-owner occupied properties' was proposed by councillors to cover a shortfall in promised State Government funds.
"In the aftermath of 2011, funds were promised to help the area with the many projects that needed to be carried out, but subsequently, the money didn't arrive," Cr Jones said.
With LVRC taking out loans to cover the costs, Cr Jones said these loans, totalling approximately $11million, now had to be repaid.