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Treasurer delivers property sector the ‘answers to the exam’ with latest budget announcement

17-May-2017


As someone who’s been working with property clients across three market cycles now, I’ve certainly lived through the aftermath of many Federal Budget announcements, and the latest iteration is no different.

While for many their first response is to begin poring over the finer details of the budget with their advisors, looking for latent loopholes, the smart operators will have recognised that the 2017-18 Budget actually provides a number of new opportunities.

What is abundantly clear is that if you take the time, Treasurer Morrison’s budget already gives the property sector, and in particular developers, the “answers to the exam”, by highlighting market segments that could (and should) receive more attention.

For instance, the Budget incentivises empty nesters nearing retirement to leave their family home and downsize. For developers, this presents an opportunity to invest in more developments targeting the empty nester market, but rather than marketing these developments to "over 55s", an alternative approach may be to focus on a desirable standard of living for this generation of buyers.

Meanwhile, first home buyers are being enticed to save for a property deposit by topping up their super at the marginal tax rate. The jury's out on whether this change will actually help young buyers, but the intention is good. Again, developers may consider this as an opportunity to create more innovative first home buyer packages, helping them shift existing stock that may already be slower to sell anyway.

Another key point relates to foreign investment in new properties, with a Federal clampdown and rising State Government charges blunting the sales edge previously enjoyed by some offshore-owned development companies. On the other hand, you could take the view that it's an opportune time for these same companies to focus more of their creativity and marketing spend on Australian buyers.

So to anyone in property still trying to get to grips with this Federal Budget, I suggest they consider it an opportunity rather than an obstacle, and consider altering their approach to adapt to the changing environment. Developers who don't do so risk being left behind.

 

John Quinn, Director, The Capital Group

John Quinn is the founder of The Capital Group, a leading marketing and communications consultancy, particularly for the property sector, for the past 28 years.


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