This time last year, we were supposed to have a federal budget – instead, we had a pandemic.
And over the year many elements of our life were upended due to Covid19
Around this time last year, our Prime Minister Scott Morrison said he’d build a bridge for us to get to the other side and it seems he did.
The government threw everything it could, including billions of dollars at creating jobs and keeping our economy moving and it succeeded.
And it’s still if you look at the federal budget handed down by Treasurer Josh Frydenberg and you’d think it was still raining money.
Never before has a budget done so much to supercharge the economy after the worst of a recession has passed.
The underlying message from this pandemic budget is that while our recovery is running apace, the economy still remains fragile and unable to stand on its own two feet.
The government has no option but to continue spending, and it has given the green light to a number of initiatives to ensure our economic recovery continues.
We learned that taxes on company profits and personal income are driving a revenue bonanza in Canberra.
So what kind of treasurer could resist spending some of that, given ultra-cheap borrowing costs and an election campaign expected within a year or so?
In today’s Property Insider video I chat with Dr. Andrew Wilson, Australia’s leading housing economist, about some of the impacts of the budget on our property markets as well as some of the important economic data that has been released over the last week as it relates to property.
Auction results remain strong
Auction clearance rates remained strong last weekend, which was the second busiest auction weekend of the year so far and the busiest May auction weekend on record.
Watch this week’s video as Dr. Wilson gives his thoughts on the pulse of the property market.
He explains how Sydney’s high autumn clearance rates remained unaffected by another record surge in auctions at the weekend with the more boom-time results recorded.
Although auction clearance rates have faded marginally compare to the unprecedented results recorded in March, the market clearly main remains in favour of sellers with upward pressure on prices continuing from strong buyer competition, now increasingly fuelled by investors.
Dr. Wislon also discusses how Melbourne produced another boomtime clearance rate on Saturday, again unaffected by another surge in auction numbers.
Melbourne again reported a month high weekend auction clearance rate of 80.7% – marginally higher than last weekend’s result.
Melbourne recorded the median price of $1,050,000 for houses sold at auction on the weekend which was 4.9% higher than that recorded last weekend.
Booming iron ore exports have delivered a bumper company tax take over the March quarter, with the budget’s bottom line improving by $30bn since the mid-year economic and fiscal outlook in December.
And our economic recovery is likely to continue, underpinned by strong household spending supported by the further lifting of activity restrictions, increased confidence as general and certainty reduces, and the world effects from higher housing prices.
While almost everyone seemed a winner in this year’s Budget some of the property-related initiatives watch this week’s video as Dr. Andrew Wilson and I discuss some of the following initiatives.
- The establishment of a Family Home Guarantee
This will allow single-parent families to purchase a home with a deposit of as little as 2 per cent.
- Expansion of the New Home Guarantee
An additional 10,000 places in this 5 per cent deposit scheme will be created, to carry on from the success of the program’s first year.
- An increase to the First Home Super Saver Scheme
This will see the maximum amount of voluntary contributions which can be released under the scheme lifted to $50,000 from the previous $30,000 cap.
Australians over the age of 60 who downsize their family home have rewarded by being able to contribute $300,000 to superannuation ($600,000 for couples) in this year’s Budget.
This scheme was previously only available to Australians over the age of 65 and the thought process behind this is that this will free up more housing stock for younger families.
- Infrastructure spending
The Treasurer confirmed the government is spending $10 billion over 10 years on a number of major infrastructure projects, including:
- $2 billion initial investment for a new Melbourne Intermodal Terminal for the transfer of freight
- $2.03 billion for Great Western Highway Upgrade – Katoomba to Lithgow – construction of east and west sections in NSW
- $400 million for Inland Freight Route (Mungindi to Charters Towers) upgrades in Queensland
- $161.6 million for the Truro Bypass in South Australia
- $160 million for Agricultural Supply Chain Improvements – ‘Package 1’ in Western Australia
- $150 million for National Network Highway upgrades (Phase 2) in the Northern Territory
- $80 million for Bass Highway safety and freight efficiency upgrades in Tasmania
- $26.5 million for William Hovell Drive duplication in the ACT
House Building Boom — No Sign of Easing Yet
The remarkable house building boom of the past year continues unabated with another record month of activity and no sign of easing any time soon.
The ABS reports that the number of capital city house building approvals surged again over March to a new record monthly total of 10,075.
The March result was 12.6% higher than the previous months total with house building approvals having increased by 46.2% over the first three months of this year compared to the same period in 2020.
All capital reported increases in house building approvals over March led once again by Perth up 15.4% followed closely by Melbourne up 14.8%, Adelaide up 12.8%, Brisbane up 8.7%, and Sydney higher by 6.1%.
Perth is now clearly the second most active capital for house building with 2326 approvals over March – lower than Melbourne at 3141 but higher than Brisbane 1572, Sydney 1515, and Adelaide 1074.
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on
Now is the time to take advantage of the opportunities the current property markets are offering.
Sure the markets are moving forward, but not all properties are going to increase in value at the same rate. And some sectors of the market will continue to languish.
Now, more than ever, correct property selection will be critical.
You can trust the team at Metropole to provide you with direction, guidance and results.
Whether you’re a beginner or an experienced investor, at times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award winning team at Metropole.
We help our clients grow, protect and pass on their wealth through a range of services including:
- Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now! Click here to learn more
- Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $4Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property. Click here to learn how we can help you.
- Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
- Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.
Subscribe & don’t miss a single episode of Michael Yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to Michael Yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.