Residex CEO John Edwards is calling for the government to halt its plans to implement a carbon tax due to the fragile state of Australia's property markets.
Edwards argues in his latest market Wrap email that the June quarter numbers in some states are the "worst recorded for more than 30 years" and that there are all the makings of "a perfect storm".
"The market right now is very patchy," said Edwards. "There are bright stars on the horizon but they could be dimmed very easily as their glow is weak and flickering, like any new flame is in its infancy."
Edwards also points out that low consumer sentiment is being influenced by the housing market performance, and is at risk of dragging the wider economy lower. He argues that an extra tax, therefore, is mittimed.
"We know consumer sentiment is low; if there is any doubt then we simply need to look at theretail sales numbers and the public downgrading of David Jones’ profit forecast," he adds. "We don’t need issues that will reduce consumer confidence even further at this point in our economic cycle. Reduced consumer confidence will put more downward pressure on our housing markets at the same point in time when it is naturally in decline and is most at risk.
"Significant reductions in these markets could quickly change our economic fortunes. The impact of significant reductions in housing values on an economy has been well and truly demonstrated in the world events of the last five years."
Even so, Edwards highlights New South Wales, Queensland and Perth as markets in which there might be opportunities for investors, commenting that NSW is "lowest risk".
"The latter two [Queensland and Perth] should be used to find bargains, as these markets do have a little more correction in them," he concludes.
What do you think? Is Edwards right, or is the carbon tax a big fuss over nothing? Have your say at www.yourinvestmentpropertymag.com.au/forum.
