September Market Update
ECONOMIC UPDATE
On Tuesday night the Government announced the Federal Budget to support the country out of the recession triggered by the coronavirus pandemic. The government announced that this financial year it expects to spend an unprecedented 35% of GDP ($677bn) with a deficit predicted to hit $213.7 billion. During this recession, the government expects revenue to bottom out at 22.5% of GDP. And one of the big numbers of this budget is debt, with an anticipated net debt of $966bn in 2023-24. The budget focuses heavily on a private sector-led recovery with a large commitment, to the tune of $26 billion, for businesses writing off the full value of eligible asset purchases.
With this big commitment in spend the government has promised some of the following:
NATIONALLY:
Further tax cuts for millions of Australians
$26 billion scheme expensing all new business capital expenditure.
$14 billion in new and fast-tracked infrastructure projects – including bringing forward $7.5 billion in road and rail projects.
JobSeeker payment to return to it’s pre-pandemic rate in December 2020 – though more announcements are to come on JobSeeker before the end of the year.
JobMaker Hiring Credit for employers who hire anyone aged 16-30.
Expansion of the First Home Loan Deposit Scheme.
The Government is pledging billions towards COVID-19 vaccines here and abroad.
Net overseas migration estimated to drop from 154,000 ‘19-20 to -72,000 by the end of 2020-2021. It is estimated to gradually increase to 201,000 by 2023-2024.
Government focuses on six key areas of manufacturing – defence, space, medicine and medical products, food and beverages, resources technology and recycling and clean energy.
QUEENSLAND:
$1.3 billion committed to transport infrastructure across Queensland
Nearly $250 million for recycling infrastructure and waste reduction
$20 million for the National Drought and North Queensland Flood Response and Recovery Agency
$3 million for the North Queensland Water Infrastructure Authority
$11.6 million for the Great Barrier Reef Marine Park Authority
PROPERTY MARKET UPDATE
September continued to be a trying month for the Sydney and Melbourne still battling to control COVID-19, and social distancing continuing to negatively impact the Victorian housing market, whilst Queensland managed to continue to keep community spread at almost zero, helping to support growth across the housing market. In six of the eight capitals September saw a turn in market sentiment, consumer confidence increase and new listings rose, with six capital cities recording rises in home values across the month. Brisbane recorded a growth of 0.5% in housing prices, this was also echoed across the regional Queensland property market. Queensland has continued to leverage and fast track development approval to ensure the continued strength of the industry and economy, with approval rates for homes and apartments increasing by 13.9% and 8.1% respectively in August and September.
6 of the 8 capitals recorded growth through September
Cash rate remains at 0.25%
Pre-approvals recorded a massive spike
Realestate.com.au recorded 24.5% increase in user search activity in comparison to September 2019.
Source: CoreLogic - Index results as at 30 September 2020