How the federal budget affects you as an investor

With the release of the federal budget last week, newspapers are abuzz with how different financial elements affect different groups of people. In today’s email, we look at some of the latest stories out there and what it means for local property investors.

New land released

The Sunshine Coast News reported this week the release of new land for housing.  While this is a positive step, some say it may not be enough to keep up with the rapidly growing population in the area.

As the Sunshine Coast experiences a surge in population, demand for housing will continue to increase which is good news for investors, not so good for tenants.

Property prices are back on the rise

The median value of property on the Sunshine Coast is now $898,536, up 0.6% from last month and 0.4% over the past three months.

These numbers don’t sound like much, but they equate to 7.2% growth per annum.  7.2% growth means we are back to property doubling in price every 10 years.  After a 12-month period of very little growth, this is more great news for investors and the Sunshine Coast is well and truly back on track.

3 in 4 tenants happy with their landlords

Another interesting story this week is the latest research that shows tenants are in fact happy with their landlords, dispelling the myth of greedy landlords taking advantage of tenants.

The study highlighted how external factors, such as increasing property prices and taxes, have put pressure on both tenants and landlords. It seems that tenants understand that most landlords aren't trying to rip them off but rather trying to maintain a balance between covering costs and providing affordable housing.

Tax incentives for investors

I was pleased to see a focus on the housing shortage crisis in last week’s budget and importantly, how investors can help. One way the government is addressing this issue is by offering tax incentives to build affordable new homes available to rent.

The withholding tax rate will be cut from 30% to 15% and the depreciation rate will rise from 2.5% to 4% per year on eligible build-to-rent projects.

This will increase the after-tax returns and make it much more attractive for investors and the budget estimates that cutting these taxes could lead to an increase of 150,000 new rental properties over the next 10 years.

As you can see, there are many angles to the property investment environment and lots of stories out there.

Taken together, they demonstrate that looking into investing is a dynamic process and - at the moment - far more positive than newspapers like to make out.

It’s important to be wary of sensationalist headlines with their cherry-picked statistics and look at all the information together for the true health of the property market which has been, and still is incredibly resilient and in good areas, continues to deliver great returns for investors.

Give us a call anytime, we would love to help you decide if property investing is right for you. We look forward to hearing from you.

And remember, property investment is a long-term growth strategy.

Don't wait to invest. Invest, then wait.