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The Victorian Government announced a raft of measures making it more affordable to purchase property this financial year. This is great news for owner occupiers and even more so for investors.
In its push for a speedy economic recovery after the COVID-19 lockdowns, the big-spending budget will focus on infrastructure, with almost $20 billion ($19.6 billion) to be spent each year until 2024. This includes the $2.2 billion for the Suburban Rail Loop, and $2 billion towards Geelong Fast Rail —matching the federal government’s contribution to the project.
Average government infrastructure investment from 2020-21 to 2023-24 will be around four times the 10-year average of 2014-15. That’s right – FOUR TIMES! This will create hundreds of thousands of jobs and see interstate migration surge in Melbourne. As we all know, jobs are a key reason why demand for property increases. For this reason, we believe this should see the start of the next property cycle in Melbourne.
Furthermore, the government has announced tax relief on stamp duty for residential property transactions of up to $1 million.
A waiver of 50 per cent for new residential properties (newly built or off-the-plan) and 25 per cent for existing residential properties, will be available for purchases of up to $1 million on contracts entered into by 30 June 2021.
The savings are significant. On a $1 million house, this change reflects a $27.5k saving for buyers of a new property, and a $13.7k saving on an established dwelling.
It has been many years since investors have benefited from stamp duty concessions for off-the-plan properties in Victoria. What we have presented to us now is a window of 7 months to take advantage of this newly announced waiver. This provides a sensational opportunity for savvy investors.
When this information is read alongside the recently released Westpac-Melbourne Institute consumer sentiment survey, it makes sense why an investment in a quality residential property should be considered. The survey rose by 2.5 per cent in November, its third monthly rise in a row.
Westpac chief economist Bill Evans said “We are now at a seven-year high so Australians are really indicating after the doom and gloom period of the lockdown they are looking forward to a positive future,” he said. “One aspect of the survey that’s most outstanding is strong confidence in the housing market, that’s spilling over to general confidence,” he said.
At Specific Property, we will help you to secure a quality property with room sizes that work, aspects that promote healthy living and that will be desirable for tenants and future owners. As a result, we give the property the best chance to deliver solid capital growth and rental returns. We can achieve this via a new property or established property through our buyer’s advocacy service.
An example of a property that we would consider highly desirable for investors is this house and land package below. Located in Donnybrook around 35km north of Melbourne. Donnybrook is an up and coming suburb with many new homes and lots of significant amenity being built. Some highlights include a new town centre at Cloverton, new private schools, government schools and an planned upgrade to the train station.
The house features a substantial allotment of 400sqm and a large 22sq 4 bedroom, 2 bathrooms, 2 car garage home. This property will be highly sought after given its large land size, when many of the blocks in the area are on 300-350sqm. We have specifically chosen a site with a north facing back yard so all the living areas and alfresco, open up to the north space at the rear of the property.
The living spaces importantly are all generous in size much larger than many standard homes that are being built these days. What’s most important is that they will furnish with real sized furniture and still have space for circulation.
Priced at $570,835 this property includes everything required for a tenant to move in, including window coverings, landscaping, cooling and heating and more. Based on current rentals in the area the property should achieve somewhere around $400-420 per week in rent, showing a yield of around 3.7%.
If you want to talk about this property, or others, contact us or your Hudson planner. We have many options across Melbourne, Brisbane and regional VIC and QLD available now. All of them take into our Specific Property selection criteria which focus on factors that will give the property the best chance to drive both capital and rental growth.