Media Release

Peter Gutwein MP
Shadow Treasurer

Sunday 18th December, 2011

Real Estate slump will worsen budget black hole

Reports that property sellers are slashing the asking price when selling their properties is confirmation that the Tasmanian economy is in trouble and that confidence has collapsed which means that the State budget is going to take another serious hit to the bottom line.

Property values and the number of sales have fallen across the State according to the REIT.

Their latest report indicates that for the 12 months to September the median house price fell by nearly 5% and prices for apartments and flats by 6.5%.

The number of sales was also well down with house sales numbers falling by nearly 10% and sales of apartments and flats collapsing by more than 25%.

These figures to the end of the September quarter are potentially disastrous for Tasmania’s already desperate fiscal position.

Last financial year duties from property were forecast to be $170 Million however they collapsed by $25 Million or 15% by the end of the year.

The Treasurer ignored this and even forecast an increase in duties from property this financial year of $20 Million up to $165 Million from $145 Million last year. Based on the REIT numbers this will not be achieved and could even be lower than last year.

This means another hit to the budget this year and conceivably a loss of up to $100 Million over the forward estimates.

The Government has stalled the economy, we are in recession – ‘Australian Bureau of Statistics figures released this week revealed the state’s economy was “technically” in a recession’* and the budget black hole is getting worse.

The Government must stop focusing on itself, show some leadership and start to grow the economy not shut it down as it is doing with the forestry sector.

* TCCI media release Dec 9 2011