Property Market Update
We enjoyed a very informative breakfast event a couple of weeks ago hosted by REA Group at their office in Subiaco. Nerida Consibee, Chief Economist for the REA Group and one of the leading property market experts in Australia was the keynote speaker. Nerida shared positive news overall for the Perth and Western Australian economic market.
We have seen increased rental demand and this has been driven by population growth into Perth, now growing at its fastest rate in 4.5 years! Reported was Subiaco, Daglish and Nedlands amongst the top ‘strongest rental growth’ suburbs for the past 12 months.
There is improved activity in the mining sector spelling good news for economic growth, mining equipment investment is increasing and while unemployment is still above the long term average, it is at a 30 month low. Nerida Conisbee said there had been a noticeable increase in enquiry from investors into Western Australia.
Other Positives For The Economy:
- APRA have removed the speed limit on investor lending growth, the cap on interest‐only loans and the 7.5% stress test on home loans
- The Federal Government has cut income taxes, made no changes to negative gearing and the 5% First Home Loan Deposit Scheme is now up and running
- The RBA cut interest rates three times in 2019 and there maybe a further cut in 2020
Globally, interest rates are trending down again – this puts less pressure on wholesale rates and hence our mortgages
- BREXIT dramas slowly coming to an end and USA / China trade war is ending
Nerida also made mention about the impact COVID-2019 may have, this is a wait and see depending on how quickly the virus is contained. If we look at history and the impact of SARS in 2004, the virus led to a drop in GDP for a quarter but the following quarter economic growth accelerated as the Chinese Government pushed forward a stimulus infrastructure programme to get their economy moving, which had a knock on positive effect on us through iron ore.
Nerida also made mention of the bushfires in Eastern Australia, while the short-term effect on their economy is negative, long-term the outlook should be positive with rebuilding.
Attention Overseas Owners
Since our last update we have had many overseas owners seeking advice on the changes to the Main Residence Capital Gain changes that take effect on 1 July 2020 – see ATO link The best advice we can give you is to speak to your accountant – some overseas owners aren’t necessarily impacted as much as they thought they might be.
The important thing is to get advice from your accountant as early as possible so you have plenty of time to make the right decision for your own personal circumstances – remember these changes take effect on 1 July 2020. So please share this with your family or friends that you think might be impacted by these changes.