Cash splurge attempts to revive property market
Massive infrastructure spending and cuts to stamp duty are just some of the highlights of the ACT budget
The ACT government has allocated a record $2.5bn to infrastructure spending over the next four years, in the hope that it will stimulate activity in the economy and revitalise the ACT’s stagnant property market.
In order to fund all the new developments, the government will have to borrow an extra $1.27bn over the forward estimates. However, ACT treasurer Andrew Barr is adamant the extra borrowing will not jeopardise the local economy and its AAA credit rating, citing the fact that the ACT has the lowest debt among all states and territories.
- Some of the big ticket items include:
- $21m for the Canberra Hospital redevelopment
- Development of the University of Canberra Public Hospital
- A new carpark at Calvary Hospital
- $21m for the Capital Metro light rail project
- Construction of the new Coombs P-6 School
- $20m to improve the Civic to Gungahlin Corridor
- $9.9m for the Majura Parkway to Majura Road link road
- $10m for upgrading the Barton Highway roundabout
Another important announcement that will catch the eye of property buyers relates to stamp duty. There is now a lower flat rate of 5.25% for transactions of more than $1.455m. Despite most purchases in this category being commercial, the benefits will also be available for Canberra’s more expensive properties.
Furthermore, people aged over 60 will effectively be exempt from paying stamp duty when they buy a house worth up to $595,000. This should encourage downsizing, with the purpose of freeing up larger homes for families, while stimulating activity in the housing market.
And in an attempt to bring in an extra $10m per year, there is a new fixed charge and rating structure for residential land tax.
Finally, good news for jobseekers
At a time when 6,500 Commonwealth public servant jobs in Canberra will be lost over the next four years, it must be a welcome relief to the ACT economy that the Capital Metro project will support more than 3,500 jobs during construction.
In particular, the jobs created by the light rail project linking Gungahlin to the city will support the economy well into the future, says the minister for the environment and sustainable development, Simon Corbell.
“Light rail is well known for its ability to stimulate economies and support significant job numbers both during construction and operation.
“In a time when many jobs will be lost in the ACT, it is great to see the positive economic injection will have to the ACT economy in the short and long term.”
Furthermore, an EY report indicates that the light rail along the city to Gungahlin corridor will support 50,000 jobs through to 2047.
Suburb to watch: Ngunnawal
If you’re looking for an investment property in the ACT that’s good value for money and less than 12km from the Canberra CBD, look no further than Ngunnawal. Despite being only 4km from the Gungahlin Town Centre, Ngunnawal’s median house price is a whopping $119,000 less expensive than Gungahlin’s. The Gungahlin Town Centre has gone from strength to strength in the last few years, and offers a wide range of specialty shops and nice restaurants. And if that’s not enough, there is a major shopping centre in Belconnen
, which is also just a few minutes’ drive away.
In Ngunnawal itself, there are two small shopping centres that provide all the basics. The affordability of Ngunnawal makes it attractive to first home buyers, who are typically young families. Indeed, this demographic has a range of great schools to choose from and they are also drawn to the lovely parks and gardens. The suburb is also making an effort to attract retirees. A retirement village is being built here, which is planned to include 161 villas and will be completed by 2019.
The fact that house prices have only grown by 2% in a year and 1% over three years indicates that there is much room for growth here. Moreover, houses spend on average just 69 days on the market, which means the area is catching the attention of buyers. This is particularly good for this part of Canberra.
Can you afford to buy in this suburb? Find out how much you can borrow
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