Property expert claims stage three tax cuts will lead to house price increases: Niro Thambipillay issues bleak warning

An Australian property expert has warned that house prices will skyrocket, with several factors triggering a potential new boom.

Niro Thambipillay, a Sydney-based investor and buyer’s agent, predicts the price hike will happen in 2024.

He believes the increase will be driven by the upcoming phase three tax cuts coinciding with a predicted fall in interest rates.

Interest rates were suspended by the Reserve Bank of Australia for a second month in a row in August, but remain at an 11-year high of 4.1 percent.

Many commentators expect them to start falling in the coming months, after rising 12 times since May 2022.

The stage three tax cuts, which take effect July 1, 2024, will mean that anyone making more than $50,000 will have extra cash in their pocket.

Mr Thambipillay reasoned that this would mean more people would have extra money to invest in things like the real estate market.

He claimed that the fall in interest rates and the reduction in taxes will convince banks to borrow more money, including for home loans.

“You have increased borrowing capacity from tax cuts, you have increased borrowing capacity from potential interest rate falls, you don’t have enough supply at the moment to meet existing and ever-growing demand and house prices have already risen,” Mr Thambipillay said in a statement. TikTok video.

“What do you think will happen from the second half of next year?

“I think in a lot of areas, not all, but a lot of areas, real estate prices are going to start rising very quickly and so I believe that right now, if you can afford it, is the best time to get into an investment property. steps.’

Mr Thambipillay said recent increases in property prices have already proven the resilience of the housing market.

Nationally, real estate prices rose by 2.3 percent in the first six months of 2023, after falling in the second half of 2022.

PropTrack forecasts this trend will continue, with solid price increases likely in Sydney, Melbourne, Adelaide and Perth this year and more modest returns next year.

House prices in Sydney have risen for the sixth month in a row, despite a rise in interest rates due to record high immigration, making it difficult for first-time homebuyers to enter the property market.

In Australia’s most expensive capital, the average value rose another 1% in July to an even more prohibitive $1,333,985, CoreLogic data showed.

House prices started to rise again in March in other major capitals.

House prices in Melbourne have risen for five consecutive months, rising a further 0.3 percent to $923,881 in July.

House prices in Brisbane rose another 1.4 percent to $819,832 last month.

Perth’s values ​​rose 1 percent to $625,969.

Adelaide’s recovery began in April, but monthly increases have since been bigger, with prices rising a further 1.4 percent in July to $722,793.

Darwin prices rose for the third straight month in July, rising 0.5 percent to $583,913.

Mr Thambipillay was a real estate investor before becoming a buyer’s agent.

In 2002, he bought an investment property in Western Australia after deciding not to buy in Sydney based on his own research.

He claimed to have doubled his money in just 18 months.

Although Mr Thambipillay’s clip was viewed a staggering 296,000 times, not everyone agreed with his conclusions.

One commenter said they would not invest in Australian property due to economic trends in China.

“Local numbers mean nothing,” he claimed. “China’s supply chain is about to collapse,” he said, predicting that it could lead to a recession.

The introduction of a new 30 per cent tax bracket in the third phase of the cuts, for Australians earning between $45,000 and $200,000 a year, means middle, middle and upper income earners will benefit.

Those with an income of $80,000 would get $875 back on their tax returns for fiscal year 2024-25, compared to 2023-24 and 2022-23.

Australians with an income of $60,000 – a level slightly below the median income of $65,000 – get $375 back.

But those with higher incomes will fare much better, with those with an income of $120,000 getting back $1,875.

Those who make $200,000 will get back a very generous $9,075.

The main change in the phase three tax cuts is that the number of tax brackets will be reduced from five to four on July 1, 2024 for the first time since 1984.

Others who responded to Mr Thambipillay’s TikTok thought the money made from the tax cuts would be better spent elsewhere than the real estate market.

“I’d rather forego a tax cut and get dental care reimbursed under Medicare,” someone said.