Australian Property News

Proposed carbon tax could be a positive for Canberra property market

Posted on Friday, April 08 2011 at 12:38 PM

Despite the construction boom in Canberra, the nation's capital is experiencing a momentary state of paralysis where properties are changing hands at discounted prices, according to David Thomas of Trilogy Investment Property Funding.

Thomas' sentiments were reflected in RP Data's underperforming auction clearance rate results recently for the week ending March 27.

With only a 50 per cent clearance rate result, Canberra was stuck in third place behind Melbourne (56.4 per cent) and Sydney (51.5 per cent).

"Canberrans wonder if they should buy a house or not based on Japan's nuclear reactors and the implementation of a carbon tax," said Thomas.

However Thomas expects the property price corrections to only last for a short time, particularly if the proposed carbon tax is approved and additional employees are recruited to Canberra to administer it.

He said while talk of the carbon tax had more recently dampened the local Canberra economy, the "glass-half-full locals" are now starting to see the positive effect it could have on property prices.

Thomas said it would only be natural that Federal Government set up a new department requiring additional employees to administer the tax and the impending redistribution of income.

The Federal Government's Department of Treasury said it was too early to estimate the number of employees required to administer the tax if implemented.