State budget a positive for property investing

The WA Labor Government has delivered its first state budget and, as Treasurer Ben Wyatt and Premier Mark McGowan previously indicated, the burden of amending the state’s financial situation will be indirectly shared by all Western Australians. However, from a property investment perspective, the budget is relatively positive, as there are no direct increases to property costs for residents of WA.

Momentum Wealth managing director Damien Collins said there had been no major changes directly effecting domestic buyers, which was important for the rebounding industry. Lobbying from key property industry bodies such as REIWA and Master Builders WA was taken into consideration by the government, as it recognised the recovering state of the market and decided to leave land tax, stamp duty exemptions and first homeowner grants unchanged. However the property industry wasn’t  totally excused from the government’s search for revenue, with a four percent foreign owner duty surcharge introduced on purchases of residential properties by foreign individuals and entities from January 1, 2019, which aims to increase state revenue by $48 million by 2020/21. “While there could be a slight impact from this, foreign investment only represents a small proportion of the WA property market,” Mr Collins said. “Instead the billions of dollars’ worth of key transport infrastructure spending will put the property market in a strong position to continue its steady recovery.”

Positive Signs For The Property Market

“It is also encouraging to see such positive estimates for the economy, which supports our view on the recovery of the residential property market as well,” Mr Collins said. “We are already seeing increased competition in the market for good property, and confidence in the market is increasing.” The budget estimates included an increase in Gross State Product (GSP) at three percent, employment growth forecasted to increase 1.5 percent – considerably higher than last year’s 0.25 percent and, lastly, State Final Demand to continue to contract in 2017/18, but then increase by one percent the year following.

Increased Focus On Transport Infrastructure

Road and rail infrastructure has been the main tale of the budget, with billions of dollars put aside to increase the networks, including 20 key road projects totalling $2.7 billion with the aim at removing congestion, increasing road safety and creating jobs. The budget announcement included the identification of the first stage of funding for Labor’s highly publicised ‘Metronet Plan’, with a total of $1.34 billion over the next four years of the project. “Property owners will also welcome the investment in infrastructure, in particular public transport infrastructure, as it adds to the amenity of the nearby residential areas and is a strong driver for property price growth as well,” Mr Collins said.

The infrastructure improvements in the first stage include:

  • $535.8 million for the construction of the Thornlie to Cockburn line with new stations at Nicholson Road and Ranford Road.
  • $520.2 million for the construction of a 13.8km rail extension from Butler to Yanchep, which includes stations at Alkimos and Eglinton.
  • Continual planning and detailed design for the next stages, including the Morley–Ellenbrook extension, the Midland Station project and the Byford Rail extension.

State budget a positive for property investing

Aside

 

The WA Labor Government has delivered its first state budget and, as Treasurer Ben Wyatt and Premier Mark McGowan previously indicated, the burden of amending the state’s financial situation will be indirectly shared by all Western Australians. However, from a property investment perspective, the budget is relatively positive, as there are no direct increases to property costs for residents of WA.

Momentum Wealth managing director Damien Collins said there had been no major changes directly effecting domestic buyers, which was important for the rebounding industry. Lobbying from key property industry bodies such as REIWA and Master Builders WA was taken into consideration by the government, as it recognised the recovering state of the market and decided to leave land tax, stamp duty exemptions and first homeowner grants unchanged. However the property industry wasn’t  totally excused from the government’s search for revenue, with a four percent foreign owner duty surcharge introduced on purchases of residential properties by foreign individuals and entities from January 1, 2019, which aims to increase state revenue by $48 million by 2020/21. “While there could be a slight impact from this, foreign investment only represents a small proportion of the WA property market,” Mr Collins said. “Instead the billions of dollars’ worth of key transport infrastructure spending will put the property market in a strong position to continue its steady recovery.”

Positive Signs For The Property Market

“It is also encouraging to see such positive estimates for the economy, which supports our view on the recovery of the residential property market as well,” Mr Collins said. “We are already seeing increased competition in the market for good property, and confidence in the market is increasing.” The budget estimates included an increase in Gross State Product (GSP) at three percent, employment growth forecasted to increase 1.5 percent – considerably higher than last year’s 0.25 percent and, lastly, State Final Demand to continue to contract in 2017/18, but then increase by one percent the year following.

Increased Focus On Transport Infrastructure

Road and rail infrastructure has been the main tale of the budget, with billions of dollars put aside to increase the networks, including 20 key road projects totalling $2.7 billion with the aim at removing congestion, increasing road safety and creating jobs. The budget announcement included the identification of the first stage of funding for Labor’s highly publicised ‘Metronet Plan’, with a total of $1.34 billion over the next four years of the project. “Property owners will also welcome the investment in infrastructure, in particular public transport infrastructure, as it adds to the amenity of the nearby residential areas and is a strong driver for property price growth as well,” Mr Collins said.

The infrastructure improvements in the first stage include:

  • $535.8 million for the construction of the Thornlie to Cockburn line with new stations at Nicholson Road and Ranford Road.
  • $520.2 million for the construction of a 13.8km rail extension from Butler to Yanchep, which includes stations at Alkimos and Eglinton.
  • Continual planning and detailed design for the next stages, including the Morley–Ellenbrook extension, the Midland Station project and the Byford Rail extension.

Home opens are still very effective

When selling your home, you and your chosen real estate agent ought to discuss the best way to promote your property prior to it being formally exposed to the market. This usually includes a variety of different marketing approaches.

Most agents agree the best way to sell a property quickly, for the best price, is to maximise its exposure to the broadest possible market. This can range from informing the agent’s database of potential buyers about your property, outdoor signage, advertising (both online and in newspapers) or holding a home open.

It is always a matter of judgement for the seller and the agent to determine the appropriate balance between maximum exposure, constraints on cost and owner convenience.

A weekend home open is the traditional way of marketing residential properties in Western Australia. Those looking to buy have come to expect home opens as a convenient way to inspect properties they’re interested in and learn about the local market.

In some cases, agents prefer not to hold home opens and instead arrange private viewings for the more serious inquirer. However, most feel a home open attracts the widest potential buyer base, which is particularly helpful when market conditions are subdued.

Home opens are also an excellent way to get quick feedback from property seekers on the effectiveness of the campaign you and your agent have implemented. Many people won’t hesitate, when asked, to comment on the home, its appeal and the asking price after they have had a look through. The feedback can be a good barometer of buyer mood, expectations and interest in the property, and can help you tailor your marketing more directly.

Presentation can make a big difference to the success of your home open. While it’s not necessary to undergo a full renovation beforehand, making some cosmetic improvements to the property, including the garden, decluttering and painting, can go a long way in attracting more interest.

First impressions are important on the day, so you want to ensure your home is clean and tidy. Also, consider things like natural light and fresh air, ensuring your home has a pleasant smell, but nothing overpowering, and that the temperature is comfortable.

It can also be worthwhile incorporating some personal touches like fresh flowers, to make your home more welcoming. You would be surprised how often the little things can make a big difference to buyers.

Be sure to speak with your real estate agent about what you can do to make your property more appealing at a home open.

by REIWA President Hayden Groves      https://reiwa.com.au/