New State Budget Boosts Melbourne’s Property Sector
Following a year of unprecedented health and economic turmoil, the Victorian Government has just released its budget for the year ahead. In it are some significant commitments to rebuild the economy and social infrastructure in the State of Victoria.
To set some context for these budgetary measures, it is worth noting the following:
- Victoria has emerged from the world’s longest lockdown and achieved effective elimination of COVID-19 with no active cases, no new cases, and no COVID-19-related deaths in over 28 days.
- Despite forecasts of 13+% unemployment earlier in the year, Victorian unemployment peaked at 7.5% and is already re-bounding.
- Even though the economic shock from the pandemic lead to a $1bn drop in economic activity, Victoria is now technically not in recession, with growth returning as we head into 2021.
The Government’s response
With interest rates at an all-time low of just 0.1% (RBA official cash rate), the Victorian Government has committed to new debt and a budget deficit of $49bn over the next four years to stimulate the economy and create 400,000 new jobs.
For property investors, this massive government commitment to infrastructure and stimulus creates a climate of confidence that will open up significant opportunities for both revenue generation and capital gain in the year ahead.
Key budgetary highlights that will support these new investment opportunities are:
- A ‘Big Build’ infrastructure spend of $19.6bn annually that will create thousands of jobs and pour money into the entire economy.
- Much of this expenditure is in outer urban and regional areas creating demand for new housing as people take up new jobs close to where they work.
- Transport infrastructure spending of billions of dollars for new trams, maintenance depots, new suburban rail loop, a new fast train line, extensive road upgrades and new linkage networks. This will make outer growth suburbs connected, affordable, desirable places to live and work for thousands of people over the decades ahead.
- A short, sharp reduction on stamp duty of 50% for new house builds (up to $1m) from now till end of July 2021 encouraging more people into the housing market.
In other words, the appeal of Melbourne as a prosperous, highly desirable place to live is being reinforced with a massive long-term government commitment to expenditure on job creation and social amenity that will underpin demand for new housing now and long into the future.
For the investor who gets into the market now, the future looks very bright indeed.
If you would like to know about upcoming property investment opportunities in Victoria, contact Resimax Group at firstname.lastname@example.org