‘Increased insolvency risk’: Property sector in paralysis as investors retreat
The collapse of a major buyers agency has sparked predictions of pain ahead for real estate agents and mortgage brokers as the market react swiftly to housing tax reforms.
Property paralysis is expected to trigger more job losses across the real estate industry as agents and brokers brace for an exodus of investors from the market in the wake of housing tax reforms.
Changes to negative gearing and capital gains tax (CGT), an uncertain economic outlook, and higher interest rates would heap more strain onto the real estate industry, according to commercial credit reporting bureau CreditorWatch.
“There’s definitely increased insolvency risk in the sector,” chief economist Ivan Colhoun told Capital Brief. “We’ve had such a long boom and prices have soared so now when you have a drop in turnover and a drop in price, it’s going to challenge businesses that haven’t been well managed.”
National buyer’s agency Dashdot, which employed around 130 people at its peak, announced on Thursday it was entering voluntary liquidation. The business blamed the shift on a varied combination of factors, spanning a weak economy and changes in the federal budget, to social media advertising, owing more than 100 customers a figure likely to run into the millions.
