11 May 2011 – Executive director of CB Richard Ellis Pty Ltd, Kevin Stanley believes more could have been done in the budget to impact the property industry but in a cautious fiscal environment, laying the foundations of the future through infrastructure development is a very worthwhile initiative and a sound investment.
Describing the budget outcome as “a small step in the right direction,” Mr Stanley said it was always going to be a difficult one. “The overall aim remains to return the budget to surplus by 2013, so there’s not much room for major initiatives which may positively impact the property industry.”
He added that the budget did cleverly change some priorities, provided tax incentives in specific areas and moved funding to more focused projects, all of which might benefit real estate through the short to longer term.
Mr Stanley described the proposed changes to the way private sector investment in new infrastructure is treated from a taxation perspective as the most important aspect of the infrastructure plan.
“ These changes are designed to encourage private investment in infrastructure, something which Australian cities need a great deal more of. The impact from this change may not be immediate, but could make a significant contribution to the development of major transport infrastructure in the long term,” he said.
“This, in turn, will open opportunity for property development and investment, especially in the industrial and residential sectors on the outskirts of Australia’s major cities.
“Funding to the government’s infrastructure planning group, Infrastructure Australia, will also increase in this budget. This will provide a greater capacity in the assessment, planning and funding process for infrastructure and anything which can be done to speed the massive pipeline of infrastructure projects has to be a positive initiative.
“When it comes to funding actual infrastructure projects, the budget could have done a lot more. However, the projects where increased funding has been announced are all very worthy and most are already underway, so this funding is aimed at hastening the delivery of these existing projects.
“NSW has won a large share of the new funding and it is desperately needed in a state which has lagged behind the rest of the country for so long.”
Referring to the project funding announced in the budget, Mr Stanley said those with the greatest likely impact on the real estate markets are the Regional Rail Link in Victoria (potentially benefitting the Western Melbourne industrial and residential sectors), the Hunter Expressway in the Hunter Valley (reinforcing the role of the Hunter Region as an important coal mining area), the Gold Coast Rapid Transit (helping consolidate a sprawling urban area), the modernisation of the Gawler Rail Line (servicing residential growth areas in northern Adelaide) and the Noarlunga to Seaford Rail Extension (providing for residential development in the southern Adelaide corridor).