The report claims the Queensland government's failed land tax reform has dealt "serious, long-term damage" to the state's rental market. 

Managing director of MCG Quantity Surveyors Mike Mortlock said his latest client data analysis found that investors "fled the market in droves" after the Queensland government announced new legislation in June last year that land tax calculations would be calculated on a property owner's entire Australian portfolio (not just property held in Queensland). 

The MCG analysis looked at investment property purchases in Queensland as a percentage of all Australian sales contracted prior to, during, and after the 98 day period between the initial announcement of the land tax reforms in June and the decision to scrap the changes in September.

"Prior to the changes, Queensland was the nation's top destination for investors with 40.9% of all investment transactions among our investor cohort - a proportion that had been rising throughout the pandemic," Mr Mortlock said.

"As soon as the changes were confirmed, that figure dropped to 33.6% of transactions, which is a 7.3 basis point fall, or a drop of 17.8% on the pre-legislation proportion.

"Despite the tax being repealed a short time later, the rot had set in according to our analysis. After rescinding the legislation, Queensland only bounced back to 34.73% of all investment property transactions. That's a modest rebound in investor activity and is still a long way off the greater than 40% result we saw prior to the announcement." 

Queensland's loss was Western Australia's gain, according to the research.

"Our numbers suggest the proportion of Aussie investors buying in WA almost doubled when the legislation changes were a reality - and they've only retreated slightly since the changes were shelved."

A survey conducted by Your Investment Property in October last year found that almost two-thirds of investors located all over Australia would have been impacted by the changes had they gone ahead. Three in four investors (75%) said if the policy were to be revived, it would stop them investing in Queensland in the future.

Another survey conducted by the Real Estate Institute of Queensland (REIQ) of over 3,300 Queensland property investors found that over 80% of landlords were considering exiting the market as a result of recent and future proposed tenancy law changes. 

Mr Mortlock said investors are "disturbed by anti-investor law changes that are so readily implemented by governments."

"As such, I expect jurisdictions like Queensland which seem so ready to introduce anti-landlord/pro-tenant/high-tax legislation to feel the sting of further reduced investor participation," he said.

"These regions should be looking to entice more investment, not discourage it through anti-investor rhetoric and ongoing restrictions that favour tenants over landlords."

He said the blame falls squarely at the feet of the Queensland government.

"Anyone who believes there's no long-term damage caused by announcing poor policy to gauge the voting public's response needs to rethink their position.

"An ongoing campaign - including threats of higher taxes, more restrictive anti-landlord legislation and even rent freezes - are decimating housing supply and amplifying homelessness.

"This sort of 'policy on the run' has done irreparable damage to the state's rental supply, with tenants hurt most by their actions."

Mr Mortlock said unless the government engages with landlords to find mutually beneficial solutions, he sees no end in sight to the rental crisis. 

Domain's recent vacancy rates report for May found that Brisbane's vacancy rate increased to 0.8%, driven by a jump in the volume of vacant rental listings over the month and annually. 

Photo by Grant Mckenzie on Unsplash