Australia’s national budget is set to lend further support to real estate investors, with a better-than-expected deficit announced alongside spending boosts for infrastructure, housing, aged care and childcare.

Treasurer Josh Frydenberg states that the latest budget will improve finances with an expected deficit of A$161 billion (US$125 billion) in the current financial year. This is A$52.7 billion higher than what was predicted six months ago. However, COVID-19 recovery measures will see Australia’s net debt skyrocket to A$980 billion in 2025-40.9 percent of GDP.

Higher-than-expected commodity prices and a sharp recovery in the labour market have contributed to a significant improvement in the deficit. However, the government’s focus is on an employment-driven economic recovery.

That path to recovery, combined with record low interest rates, has already been boosting investment in commercial property markets.

Recovery will continue to be supported by A$15.2 billion of new infrastructure spending, including a new Melbourne intermodal terminal which will activate Inland Rail in Melbourne. Both projects are due to complete in 2025.

The developments will shorten freight transport times from Melbourne to Brisbane via Sydney to 24 hours rather the current 30 hours.

Other major infrastructure spending, such as the A$229.4 million allocated towards the A$1.6 billion M12 motorway in western Sydney, is expected to encourage new industrial precincts needed to service a growing occupier base in Australia’s capital cities.

The government foresees the use of superannuation incentives to free up supply as well as stoke demand in housing market. First home buyers will be able to access A$50,000 from their superannuation funds for owner-occupied property purchases, while single parents will be able to put a deposit down of only two percent towards purchases.

Source: Link

Date of Publication: 17 May 2021