June Newsletter 2023
HEY NEIGHBOUR!
It's been a big few weeks but today I wanted to focus on the Victorian State Budget, because we are bored of focusing on interest rate rises (they went up again yesterday, for anyone who missed it). The budget was delivered two weeks ago by Treasurer Tim Pallas and it's fair to say that it was a bit of a mixed bag.
After speaking with many of our customers and community members, the overwhelming majority are not happy. On one hand, the state Government intends to significantly amend taxes on commercial real estate transactions, by eliminating stamp duty and replacing it with a land tax. Whilst it is encouraging that the Government intends to change stamp duty, it's not clear whether the land tax will help or hinder the industry.
Before everyone gets angry, we must remember that the property industry is Australia's biggest single industry, which employs 1.48m people directly and contributes 17% of the total GDP and 18% of the total tax revenue (based on 2018/19 data). Whilst these statistics are related to Australia's property industry (VIC not available), Victoria's trend will be similar.
Property isn't the only industry affected either. There are definitely positives for small businesses who will benefit from lower payroll tax changes, and the abolition of insurance duties over the next 10 years. However, medium and larger businesses will be hit with a higher payroll tax.
We certainly appreciate some of the long-term benefits, and there is no doubt that this budget is a particularly difficult one given the amount of debt the Victorian government has taken on (partly due to COVID-19). However, given the current economic circumstances where inflation and debt costs are high, we believe the timing for these changes could be wrong. Having said that, kudos for being brave! As long as it doesn't cost the rest of us our livelihoods. For some budget summaries, refer to our market insights section below.
Naturally, we would love to hear as many of your views as possible, as it helps us learn and further develop our views.
Moving on to something more light-hearted and positive, as of our latest donation to the Education CHANCES Foundation, one more deserving youth will receive a scholarship to further themselves through their education, and we couldn't be more pleased! We have several of our owners offering to contribute a portion of their rent toward CHANCES too. If you would like to show your support with a $1+ monthly donation, let us know via the owner's link.
Be well and speak soon!
Carmela
MARKET INSIGHTS
We strive to stay up to date on the latest market trends. Here are a few articles we think are worth reading.
- Thinking about building a home? Here's what you need to know about the crisis in construction.
Australia has one of the most expensive property markets in the world and a shortage of housing has seen the rental vacancy rate plunge to record lows of 1% in both metro and regional areas. So a lot of first-home buyers and off-the-plan apartments and house-and-land packages because they tend to be cheaper than established properties, come with a fixed price, and often have government grants too.
- Build-to-rent alone won't fix housing crisis: Tim Gurner.
Rich list developer Tim Gurner has lifted the pipeline of build-to-rent units. His Qualitas-backed platform will deliver our next few years to 3650 apartments after revealing a string of new projects in Melbourne and Brisbane. "There's been a lot of talk about BTR, but not a lot of action," Mr Gurner told The Australian Financial Review. While acknowledging that BTR has a huge opportunity to grow in Australia, Mr Gurner said only about 8000 units have been approved for construction to date. (This could grow to more than 20,000 units over the coming years if all projects in planning proceed to construction, a report released in March by JLL said).
- National property price rebound gathering pace despite interest rate rises, with Sydney leading the recovery.
The house price recovery gathered pace in May, with Sydney continuing to lead a broad recovery, as the number of properties listed for sale fell further. The latest CoreLogic national Home Value Index rose by 1.2 per cent last month, its third straight monthly rise.
- What You Need to Know Before Investing in Property
The fine print, ongoing costs and other considerations that should be taken into account before making any decisions about investment.
- Victorian State Budget Overview from the Victorian Chamber of Commerce.
This is a must-read summary of the proposed budget.
COMMUNITY BULLETIN BOARD
What's new in your neighbourhood? These are a few recent updates that are happening in some of our local communities.
- Purple and Green Bins
Keep an eye on your local council as they bring forward new options for waste management. Across Victoria, councils are transitioning to have four bins; green is a FOGO bin which holds food scraps and garden waste, yellow is mix recyclables (for cardboard and hard plastic), purple is for glass recycling, and red is for landfill. The introduction of the purple bin will assist waste to get to the right destination. Instead of adding to landfill, glass can be repurposed and recycled to be used for future products, making it more sustainable. Stay mindful!
- Spirits are RISING
Melbourne City is hosting a winter festival RISING for 12 nights (7th-18th June, 2023). There is music, food, art and culture to excite everyone. Skate around the pop-up ice rink or interact with the immersive exhibits. Their full program of activities can be found through the link.
- Light Up our Natural World
Lightscape is returning this winter! Stroll through the Royal Botanic Gardens as the lights illuminate its natural beauty. This event will run from the 16th June until the 6th of August.
CAUGHT OUR ATTENTION
Here are a few things that members of our team have stumbled across over the month. Whether thought-provoking, interesting or entertaining, we want to share them with you.
- Be a Voice for Generations
Last week was National Reconciliation Week and one of our team shared the My Millennial Career podcast entitled 7 steps to Aboriginal allyship & cultural awareness in the workplace with us. It discusses what acknowledgement to country does and how to act as an ally. One of the best ways to be an ally is to stay curious and informed. Educate yourself on traditions and cultures that you aren't familiar with. We should all be mindful to keep reconciliation in our thoughts and hearts to positively influence our actions.
- Holograms bringing superstar artists back from the dead: good or bad?
This isn't new, but the technology is developing extremely quickly to the point ABBA are still alive and using holograms for their world tours (not that you need to be dead to have a hologram). But how authentic is this and is it really necessary to continue to try and 'relive' experiences, even if we can? This article provokes the thought and shows where AI might take us. Also, worth a look is Apple's recent announcement this week releasing Apple Vision.
- Australian Bites and Stings
A great app for anyone who loves a beach day or a bush stay. It has first aid advice and information on our native animals. How to co-exsist with wildlife and what do know to stay safe.
