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Government Accelerates $3.8bn Infrastructure Spend to Spur Economy

The federal government has announced it will put billions of dollars towards significant projects across the country, accelerating major infrastructure investments in a bid to stimulate the nation’s economy.

Dismissing the move as “panic” or “crisis measures”, prime minister Scott Morrison announced he would bring forward infrastructure investment announcing $3.8 billion in funding over the next four years.

More than half of which, $1.8 billion, is planned to be rolled out in the next 18 months.

The move follows calls for government to provide more stimulus in the nation’s economy given Australia’s record low interest rates and sluggish growth.

“It’s careful considered investment,” the PM said in Brisbane on Wednesday before announcing the Queensland spend.

Queensland Premier Annastacia Palaszczuk described the state’s “historic” deal as a “huge win for Queensland”, and an extra $1.9 billion towards roads, rail and funds for regional Queensland.

Queensland projects

  • $446.3 million in new road funding, including the M1 exit upgrades
  • Construction of Gold Coast Light Rail Stage 3 will kick off after the announcement of $157 million in additional funding for the project
  • Up to $648 million of projects to be “fast-tracked”, delivered sooner.
  • Accelerated funding for Linkfield Road Overpass
  • Mt Crosby Road Interchange upgrade
  • $10 million brought forward for Rockhampton Ring Road
  • Agreement on Inland Rail linking freight from Melbourne to Brisbane, with $6 billion invested in Queensland.

The Australian government’s contribution towards the Gold Coast light rail is now $269 million, up from its earlier $112 million commitment.

The Queensland state government had called for an increase in federal funding for the $709 million light rail project after its own funding announcement in August.

Construction of the 6.7 kilometre track of the light rail’s Broadbeach to Burleigh extension will commence on the Gold Coast.

The infrastructure plan will bring forward $1.8 billion to be spent on “shovel-ready projects” over the coming 18 months.

“All of these projects are projects which are going to get people home, sooner and safer, will strengthen our economy[…]not just now but well into the future,” Morrison said in Brisbane on Wednesday.

“These are structural changes we’re making, not one-off cash splashes.”

A $400 million infrastructure injection to boost South Australia’s economy was announced on Monday, with additional funds to go towards projects including the Darlington Upgrade and Flinders Link project.

Earlier this year, Reserve Bank governor Philip Lowe called on government saying that “further investment in infrastructure was needed”.

The outlook for the Australian economy is little changed since August, reveals the RBA in its minutes of the last Reserve Bank meeting, which held the cash rate at 0.75 per cent.

“Looking forward, growth was expected to strengthen gradually to 2 per cent over 2020 and around 3 per cent over 2021,” the RBA said in its minutes released on Tuesday.

“This outlook was expected to be supported by accommodative monetary policy, recent tax cuts, ongoing spending on infrastructure.”

While quarterly GDP growth picked up slightly since its low point in the second half of 2018, RBA members noted that the forecasts for growth and the labour market had been “largely unchanged” from August.

At the time of publishing, the infrastructure projects for Western Australia was yet to be announced, with every state and territory touted to benefit from the infrastructure spend. Source: The Urban Developer


 

What’s in store for the First Home Loan Deposit Scheme

The Australian Government has announced it will introduce a First Home Loan Deposit Scheme (FHLDS) to support eligible first home buyers purchase a home faster.

The Scheme is expected to commence on 1 January 2020 and will be administered by NHFIC.

The Parliament of Australia passed legislative amendments to give effect to the Scheme on 15 October 2019.

NHFIC will provide further information about the detail of the Scheme including confirmed eligibility criteria, participating financial institutions, application and assessment processes, and updates on implementation of the new Scheme in due course.

NHFIC is also consulting with financial institutions and other key stakeholders leading up to the commencement of the scheme.

Please note, applications for the Scheme are not yet open, but all current details can be found at – nhfic.gov.au/what-we-do/fhlds/

While we wait for more details to materialise, check out what is on offer right here in South East Queensland!

Demand outstrips supply in Logan accommodation market

A surge in private and public investment, growing visitor numbers and game-changing tourism projects underway is driving the demand for short term accommodation in the City of Logan.

Located just 30 minutes’ drive to major destinations – Brisbane to the north and the Gold Coast to the south – Logan welcomes 1.4 million visitors each year and continues to have strong levels of growth in domestic and international overnight travel.

The $12 billion of tourism infrastructure injected into the wider region, places the city in a strategic position to take advantage of the boom in visitors to South East Queensland.

However, recent growth forecasts suggest occupancy rates in Logan will exceed 80 per cent by 2021, set to trigger a severe undersupply of rooms and leakage of trade by 2026.

Logan’s current supply is limited – at around 300 rooms across 12 facilities, it comprises primarily of motel style accommodation concentrated along arterial roads.

Despite high occupancy rates, no new hotel stock has been developed in more than a decade.

As cities like Brisbane focus on servicing the leisure travel market, Logan has the potential to grow its stake in the business travel market.

Home to more than 21,000 registered businesses, many headquarters and operational bases in Logan generate a substantial and continuous demand in overnight room stays.

Just one example is global company John Deere – its headquarters for Australia and New Zealand is located in Logan and receives around 700 domestic visitors every year for training alone

The demand metrics on population and business growth indicates a need for 65,000 additional room nights in Logan up until 2036 – equivalent to 180 additional rooms.

When compared to similar areas, Logan is undersupplied in the number of commercial short term accommodation rooms relative to population, workers and visitors.

Table: Data as at January 2019

As one of the largest employers in the city, the Logan Hospital in Meadowbrook is one of the busiest health service providers in the region and has recently kicked off its $460 million expansion project.

Meadowbrook has been identified as a hotspot for potential accommodation facilities, aligned with Council’s master plan to develop the centre as a medical and health precinct.

With projects like the hospital underway and large private enterprise investing in Logan, the demand could outstrip supply faster than predicted.

In the last financial year, building activity in Logan was valued at over $800 million.

A stream of commercial activity saw large companies including national coffee franchisor Zarraffa’s Coffee, global logistics leader DHL and world-first commercial drone delivery service providers Wing (an Alphabet company) establish their operations in Logan.

Zarraffa’s Coffee moved into their $20 million purpose-built national headquarters from the Gold Coast to Logan in August this year.

The company’s new HQ will support 90 plus stores across Queensland, New South Wales and Western Australia and provide the space to progress their future expansion plans.

Spanning 18,000 sqm, the site also combines a roastery, a warehousing, packaging and distribution hub, factory concept cafe’ and the $50 million Distillery Road Market project being delivered by the company’s development arm Tonken Property Group.

Headed by founder of Zarraffa’s Coffee, Kenton Campbell, Distillery Road Market is set to become a world-class food experience destination akin to iconic markets such as Chelsea Market in New York and The Grounds of Alexandria in Sydney.

Campbell said the timing was right to relocate to Logan, given its central location along the growth corridor between Brisbane and the Gold Coast.

“From the point of view of customers, staff and suppliers, there is no better place, than where we are right here,” Campbell said.

“Logan has given me the ability to create something special at Distillery Road Market and for Zarraffa’s.”

Distillery Road Market will be the first of its kind in Logan and Queensland, and is part of a growing tourism cluster in the Beenleigh and Eagleby area.

Local attractions such as Beenleigh Artisan Distillery, Australia’s oldest registered distillery, and award-winning Aboriginal live theatre experience, Spirits of the Red Sand, draw in both domestic and international visitors.

Madison-Park-Overview-Image

In the next few years, the city’s strategic focus on developing its capabilities in the business, cultural and sports events sectors, will see Logan’s relatively youthful tourism industry continue to evolve.

Over the past 6 months, Logan City Council’s events acquisition program in partnership with Sports Marketing Australia has since attracted attendance of more than 14,000 competitors and spectators across 50 event days.

Rick Sleeman, Managing Director of Sports Marketing Australia said that Logan had an accessible location and the right event infrastructure in place to host major sporting events.

“A capacity and capability assessment identified Logan’s potential to become a sports super centre in South East Queensland,” he said.

“Logan has world-class facilities from PGA standard golf courses, sporting fields, indoor courts and 2000-capacity arenas, plus access to national and international airports making the city an ideal host.”

Watch: Madison Park at Park Ridge.

In 2018, the Brisbane Roar Football Club invested $9 million to develop a state of the art training facility and operations base at Logan Metro Sports Park and has plans to host tournaments.

And the recent $65 million whitewater adventure park proposal, now at the pre-feasibility stage, will be a game-changer for Logan and the region – with the potential to become an iconic tourism asset and future Olympic Games venue.

The demand for short term accommodation continues to escalate as the line-up of major sporting tournaments join Logan’s events calendar.

Given the strong demand fundamentals and opportunities across business, events and the emerging tourism industry in Logan, there is a demonstrated gap for a business style, specialist hotel or serviced apartments.

To support this shortage in supply, Logan City Council offers incentives for eligible new short term accommodation developments that achieve a 3.5 to 5 star rating.

For more information on development incentives and to download the study on short term accommodation investment opportunities visit www.loed.com.au.

New home sales building in Queensland

Queensland is leading the nation in terms of new home sales, with the state the only one to record a “significant increase” over the past quarter.

The finding was contained in the HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states.

Speaking of the overall national uplift in sales, HIA economist Angela Lillicrap said new home sales bounced back in September to “return to levels seen during the latter half of 2018”.

“Sales increased for the second consecutive month by 5.7 per cent,” Ms Lillicrap said.

“This improvement in sales is a welcome reprieve from the steady decline that emerged in late 2018.

“It remains too soon to confirm that we have passed the bottom of the cycle, but this result does highlight that we are not likely to see further material falls in new home sales.”

For the month, new home sales were up in all states except for NSW, which declined by 0.3 per cent for the month and 12.1 per cent for the quarter.

In Queensland, sales were up 1.7 per cent for the month of September, while the increases were even higher in Victoria (up 11 per cent), South Australia (18 per cent) and Western Australia (13.6 per cent).

But those increases were not enough to lift those states, with Ms Lillicrap revealing that national new home sales remained down by 1.5 per cent compared to the June quarter.

The only state to record a “significant increase” was Queensland, which recorded a 6.9 per cent increase in new home sales compared to the June quarter, according to the report.

“Going forward, moderate population growth, particularly from interstate migration, will sustain the underlying demand for new houses in Queensland,” the report said.

Ms Lillicrap said other policy factors would also help bolster new home sales in the future.

“The easing of APRA’s lending restrictions and the RBA’s rate cuts have started to have a positive impact on the new home market,” Ms Lillicrap said.

“With the addition of the Governments First Home Loan Deposit scheme likely to see an additional increase in first homebuyer activity, we expect that the improvement in new home sales will be sustained.”

Source: realestate.com.au

Good news on the National First Home Buyers Scheme

Government gets green light to go halfsies with 10k home buyers

A controversial scheme that will see the Federal Government go halfsies with 10,000 first home buyers a year has been given a green light to go ahead.

This after the National Housing Finance and Investment Corporation Amendment Bill 2019 — which was first introduced to the House of Representatives on September 12 and the Senate on September 18 — was finally passed by both houses Tuesday afternoon.

In a joint statement with Minister for Housing and Assistant Treasurer Michael Sukkar, Treasurer Josh Frydenberg said the passage meant “first home buyers will be able to enter the property market sooner”.

The Bill covered implementation of the First Home Loan Deposit Scheme and the new research function of the National Housing Finance and Investment Corporation.

“The Scheme is designed to facilitate earlier access to home ownership for first home buyers, by providing a guarantee that will allow eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5 per cent,” the joint statement said.

“The Scheme will support 10,000 first home buyers each financial year.”

It said “the Government recognises that saving a deposit has become a more significant barrier to entering the housing market. It can take ten years for the average first homebuyer to save a 20 per cent deposit.”

The scheme is open to eligible applicants who have taxable incomes up to $125,000 a year for singles and up to $200,000 a year for couples.

“The Scheme will apply to owner-occupied loans on a principal and interest basis, and will be subject to regional price caps.”

As well as helping put FHBs into housing faster, the legislation created a new research body to “examine housing demand, supply and affordability in Australia”.

The race to beat affordability concerns amid record prices rises in recent years has also seen the Federal Government create the First Home Super Saver Scheme where Aussies voluntarily boost their super contributions — taxed at lower levels — to allow them to build a deposit for a first him.

Other measures in place include the allocation of $1 billion to the National Housing Infrastructure Facility “to unlock new housing supply, in partnership with local councils” and the release of Commonwealth land, including defence land, for housing development.

“These incentives have helped thousands of first home buyers enter the market. In the past year, more than 110,000 Australians bought their first home — the highest level since 2009.” the statement said.

Source: realestate.com.au