I’ve spoken previously about tightening housing supply in our region, especially new homes and apartments, and I’m pleased to see measures in the Federal Budget that may help to ease this situation.
On the affordable housing front, the Government is providing more incentive for investors who choose to park their money in this section of the market.
From July 1 next year, people investing in quality affordable housing will receive an additional 10 per cent capital gains tax discount, bringing it to 60 per cent. They will also have greater income certainty, with the Government allowing the direct deduction of rent from tenants’ welfare payments.
Another win for this sector is that managed investment trusts are now allowed to develop and own affordable housing, which is likely to see more of these schemes acquiring sites for the development of these projects.
Something that may bring more existing properties onto the market, and further drive the downsizing trend, is allowing people over 65 to make a non-concessional (post tax) super fund contribution of up to $300,000 from the sale of their family home. For a couple that’s a whopping $600,000!
This is expected to bring an additional 50,000 family homes to the market across Australia, helping the supply side of the property equation, while allowing older Australians to boost their retirement savings.
An interesting announcement that may deliver more development sites to the Tweed and southern Gold Coast is the setting up of a Commonwealth Government Land Registry from December 1, 2017.
The online registry will map the locations of Federal Government sites, potentially unlocking land that is dormant or under-utilised and seeing it used for housing development.
I’m sure that investors, developers and project marketers will find this useful for identifying potential infill development sites.
Hopefully, some or all of these measures will trickle down to our neck of the woods and bring more houses and apartments to a market where demand is strong.
‘Til next month…
Jason Abbott – Principal Coolangatta/Tweed