Every time a new budget is set, it does not matter who you are… Australian’s and industries all sit tight to see who will be most affected. The real estate market is no exception. However, from superannuation to infrastructure, it seems the latest budget announcement has proven rather positive for real estate buyers and property investors alike.

 We look at three of the main areas expected to have a large impact on the property market… for the better!

1.     Superannuation

First let us take a look at the imposed changes to superannuation. Federal Treasurer Scott Morrison said that the latest budget announcement is the biggest shake-up to Australia’s super system in 10 years. According to Switzer commentator Paul Rickard – he is absolutely correct!

 But it appears this so-called shake-up is just what the property market needs.

How so? The budget is set to reduce how much money Australian’s can put into their super. Such changes include slashing the concessional contributions cap to just $25,000, as well as setting a $500,000 life-time limit on non-concessional contributions – a change which is expected to have the greatest impact on those more well-off. In short, this means a reduction in tax benefits for any Australian who keeps money in a super fund.

 Not good news for super funds but fabulous news for the real estate industry!

 Consequently, according to Rickard, these changes will result in the money being injected into property instead. He puts it like this:

 "They (the well-off) simply won’t be able to get large sums into super, so they will look to invest and grow their wealth outside super, most directly into property.” 

 On Switzer Daily, Rickard goes on to further explain that due to the new super changes in the recently announced budget, middle-income Australians will now start looking to invest their money into the family home, investment property and farms – all funds that, in the past, would have typically made their way into the super system.

 "Now, super is really for middle-income earners. And whenever tax incentives or disincentives change, behaviours change.

 "The well-off or soon to be well-off will look at investments outside the super system, with property, including negatively geared property, an obvious beneficiary.”

 2.     Infrastructure

The budget also outlined nearly $3 billion in infrastructure spending across the states, with a major focus on roads. This package includes $594 million devoted to the inland rail between Brisbane and Melbourne. This is excellent news for Brisbane… and even better news for anyone who owns, or is considering purchasing, property in the Brisbane CBD.

 REA Group Chief Economist Nerida Conisbee says the impact of this infrastructure is long term.

 “The infrastructure spending is good, but the impacts on the property market will be more long term,” Conisbee says.

 The multimillion-dollar inland rail project foresees improved accessibility to Brisbane and is set to provide even more reason for tenants, property owners and investors to buy real estate in Brisbane. What is exciting for Brisbane, is this is just one of many new valuable long-term resources expected in the CBD over the coming years.

 3.     Negative Gearing

As expected, this budget saw no new changes to negative gearing, which can only be a good thing. According to the treasurer, the reason behind this decision is because the government didn’t want to “increase the tax burden on Australians who are just trying to invest”.

 “Those earning less than $80,000 a year in taxable income make up two thirds of those who use negative gearing,” Morrison says.

 “We do not consider that taxing these Australians more on their investments, including increasing their capital gains tax, and undermining the value of their own home and investment is a plan for jobs and growth.”

 Plus, we cannot forget The Reserve Bank of Australia’s cut in cash rate to 1.75 per cent – the lowest in modern history. This recent cut is most certainly expected to boost buyer sentiment and revive demand for property.

 In summary, thanks to the proposed super changes, middle-income and higher-income earners will soon will be compelled to start thinking outside the box for new ways to help build a strong retirement for them, and their family. For many, investing in property will provide the rock-solid investment solution they need. Suddenly we are looking at an entirely new breed of investors wanting to setup their first portfolio.

 Add to this… record low interest rates, new infrastructure and no changes to Negative Gearing (under a LNP Government), and it all spells good news ahead for the Brisbane property market as a whole – as well as those looking to make any movements towards property in the CBD, both now and in the long-term.

 Whether you are looking to buy or sell, here at HSBP we make it our mission to source the most lucrative properties in the Brisbane CBD. To find out more information or to schedule an appointment, please call our professional property consultants on 0419 782 133.