How will the new budget impact Australia's property market?
May 19, 2014 / Written by Rich Harvey
There's no doubt the 2014 Federal Budget contains a number of serious changes for Australia moving forward, but how will it affect people looking to buy a house in Australia moving forward?
According to various industry observers, the budget was a bit of a mixed bag.
For instance, Housing Industry Association Chief Executive Graham Wolfe registered disappointment regarding the abolition of certain programs, but applauded the creation of others, such as the Trade Support Loan Scheme.
"The residential building sector has only just begun to play a pivotal role in driving the economy as the nation transitions away from mining-led growth," Mr Wolfe said.
"The recovery in new home building has been highly dependent on demand generated from the household sector. Maintaining and improving consumer sentiment remains a priority."
Meanwhile, a report from News Corp Australia Network took a much more chipper approach to the budget, saying homeowners dodged a bullet when it came to tax breaks.
Worries that negative gearing would come under scrutiny from the government, particularly the $6 billion a year lost in tax revenue because of it, grew as the budget announcement approached.
However, the expected big announcement regarding negative gearing never came - a big positive for those thinking about buying investment property in Sydney and beyond.
One development that may provide home buyers with an even more valuable asset is the government's infrastructure asset recycling program, which gives state governments a subsidy equal to 15 per cent of an asset sale if they reinvest the money back into new infrastructure.
This could lead more valuable projects in Sydney and surrounding regions, such as the WestConnex development. Increased infrastructure can significantly boost the value of properties in the area.
All in all, the impact of the 2014 Federal Budget on the property market is likely to be minimal, but only time will tell what far-reaching economic effects budget cuts may have on buyers and sellers throughout Australia.