The 2018 Federal Budget demonstrated a strong commitment to major infrastructure projects across Australia, delivering significant benefits to the surrounding areas & local property investors. In response to rapid population growth and widespread urban development across Australia's capital cities, major funding commitments to large-scale transport and infrastructure projects have been announced, particularly in Melbourne and Brisbane. Budget papers outline that every dollar the Federal Government invests on infrastructure will return $4 to the economy.
Property investors have welcomed the announcement that there would be no changes to capital gains tax or negative gearing in the 2018 Federal Budget. With no measures that specifically addressed housing supply and affordability, the president of the Real Estate Institute of Australia (REIA) Malcolm Gunning stated it was “pleasing to see that the government recognises the important role that the current taxation arrangements for negative gearing and capital gains tax play in increasing supply, keeping rents affordable and easing the burden on social housing by leaving these unchanged.”
Property owners should also note they will no longer be able to claim a tax deduction for expenses associated with owning vacant land from July 1, 2019. Designed to discourage investors from ‘land banking’, this measure addresses concerns deductions are being improperly claimed for expenses. Similarly, this should further encourage investors holding vacant land to proceed with development or consider selling.
The budget is not expected to put pressure on interest rates and inflation is expected to remain within the RBA’s targeted zone. Stable interest rates combined with easing housing prices in some of our major cities should allow for increased affordability for first home buyers.
Queensland interstate migration has steadily increased in recent years and in the past year Queensland has overtaken Victoria as the state receiving the highest number of interstate migrants. With the budgets strong focus on infrastructure spending, migration to the area is likely to continue absorbing any additional supply in the Brisbane unit market as well as strengthening local house & land values. This influx of employment opportunities is also likely to create a strong demand from professionals seeking fully furnished accommodation while they live & work in South East Queensland.
Hive is dedicated to maximising the investment returns for our clients while providing a superior service to our residents. We are interested in collaborating with investors and developers, in both the student and young professional markets. For more information about the management services offered by Hive please contact us at today on 1300 882 326.