Dennis Napthine and the Victorian Liberals are doing a pretty good job talking up their fiscal management and how it is allowing them to deliver a raft of infrastructure whilst still maintaining a budget with a forecast operating surplus of $1.3 billion in 2014-15 and $3.3 billion in 2017-18. What isn’t being promoted as loudly is that Melbournians can largely thank the success of the property industry for our prosperous state. Jon Ellis, founder of Investorist, Australia’s largest, business to business off the plan property trading platform, said “that while the budget was generally positive, it is being largely funded by the success of Melbourne’s residential development industry“.
He said, “it is clear the Victorian Government is backing the fact that Melbourne is and will remain the most liveable city in the world. As a nation we haven’t been doing that well in many sectors of the economy, with a depressed manufacturing sector and a mining boom that is all but over but the property development industry is still motoring along; this really is Victoria’s superstar.”
Mr. Ellis said the property industry already contributes extensively with land tax and stamp duty adding that the government forecasts to receive some $4.4 billion in stamp duty alone in 2014/15.
He said “whilst the Government’s latest property levy will only add about $700 to each new apartment built, (based on a rate of $1.30 per $1,000 of the estimated development costs for projects valued over $1 million) it is still another tax imposed on an already heavily taxed industry“.
Mr. Ellis commented that this new levy will be largely passed onto buyers of the new apartments and while not a huge cost it is just another in a long line of taxes that further hurt housing affordability.
Mr. Ellis noted that the key winners of the new infrastructure, will be those projects located near the new rail link and underground platforms at Domain, Fishermans Bend and South Yarra. “The infrastructure projects will strengthen these areas as major hot spots while other suburbs, particularly in the north will not benefit as much by the budgets infrastructure commitments”.
“Developers in South Yarra, South Melbourne and St Kilda Road close to the Domain interchange will have something to really smile about.”
Jon Ellis is the founder of Investorist the nations leading B2B property platform, Investorist which currently lists over $4.5 billion in off-the-plan property across 200 development projects.
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