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Misconception on Taxes on UK Property Investment

We always hear investment experts say, ‘Diversify, diversify, diversify!’

It’s easy for them to say that when they have a bank of knowledge available on where to plonk their pennies, right? They have people to study, review and discern the markets every day whilst regular people like you and me tread cautiously — because unlike them, we aren’t subject matter experts.

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What’s in store for Melbourne after the elections?

In the recent Victorian State Election, the Labor government led by Premier Daniel Andrews won a second four-year term, defeating the Liberal opposition by an increased majority of 52 seats. To be sure, Labor has grand plans for Victoria lining up to be executed, but investors will be more concerned about what’s in store for the property market. In their election manifesto, Labor had major plans for housing as well as transport and infrastructure. Let’s take a look.

Housing and Planning

Apartments in Melbourne set to reach the next level. Source: Financial Review

Labor plans to improve the housing market in Victoria generally and to also put it on par with the Victorian Renewable Energy Target (VRET), the party’s primary focus for the environment. These efforts are to advance the quality and sustainability of the residential property in Victoria and forge a better standard of living.

Labor has promised that apartment buildings will be subject to a range of tougher standards such as mandatory green space, installation of sun protection and safe cladding. This is particularly important in consideration of the property boom in Melbourne’s inner city, with its rapid growth of high rise apartments. This suggests that there may be increased costs for future developments, in order to comply with these standards.

There also will be subsidies for rooftop solar panels on 700,000 homes, including a plan to allow the government to share costs with tenants and landlords for solar panel installation on rental properties. This will make buildings more energy efficient.

Transport and Infrastructure

Transport links in Victoria are in for a huge transformation. Source: Herald Sun

Labor has a solid record for transport and infrastructure projects. Having already more than $60bn of rail and road projects in the pipeline, the party has further pledged to provide “the biggest transformation of public transport in Australian history”, which is to complete a $50bn suburban underground rail loop including 12 new underground stations.  This is set to complete in 2050.

Additionally, Labor has fulfilled their previous promise to remove 50 of the most dangerous level crossings over eight years, improving safety and efficiency. The revised promise is for 75 to be gone by 2025, and the good news is that they are ahead of schedule, having already removed a total of 29 this term.

Many of Labor’s big projects are either already underway or have start dates including the $11bn Metro Tunnel project, the North East Link and the West Gate tunnel. Work on the long-awaited rail link to the airport will begin by 2022, and $100m has been allocated for planning towards fast trains to Geelong and Ballarat. Upgrades for the arterial roads and country rail lines are also part of Labor’s manifesto.

What’s in it for Investors?

The re-election of Labor is great news for the property investment in Victoria, especially urban Melbourne. The party’s housing and planning manifesto gives good sustainability that would catalyze the housing market.

The transport and infrastructure manifesto has high potentials to increase job demand. Melbourne has overtaken Sydney as the best place to find a job in Australia according to the Commsec’s quarterly State of the States report, which would only fortify its population growth. Added to this is the increased accessibility for residents living in the suburbs to work in the city, making Melbourne a top choice for anyone looking for a home.

This gives investors promising opportunities with good potential for capital growth and good rental yields, both of which is the highlight of any investment prospect.

Interested in getting in to the Melbourne property market and benefitting from its low vacancy rate and future development plans? Give us a call at (+65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at info@csiprop.com!

Article by Lydia Devadas; Edited by Ian Choong

Sources:

  • https://www.news.com.au/national/politics/australian-politics-live-tuesday-november-27/news-story/9bd4e3ca763cb24fc3c83e0b9eaea33f
  • https://www.theguardian.com/australia-news/2018/nov/24/labor-secures-stunning-victory-in-victorian-election-as-voters-reject-fear
  • https://www.theguardian.com/australia-news/2018/nov/20/victorian-election-what-the-parties-are-promising
  • https://en.wikipedia.org/wiki/2018_Victorian_state_election
  • Image Credit: https://www.theaustralian.com.au/national-affairs/state-politics/victorian-state-election-2018-live-coverage-daniel-andrews-pleads-for-stable-majority/news-story/bd299031c2325f4401a499ff14a33c1f

 

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Victoria Smashes NSW for the Second Time in a Row

Once again, Victoria has overtaken New South Wales (NSW) as the state with the strongest overall economic performance rankings in Australia.

Margin lender CommSec’s latest quarterly (Oct 2018) State of the States report has revealed that Victoria has come out top in several key indicators, namely economic growth, employment, construction activity and population growth. This is the first time that Melbourne has beaten Sydney as the best place to find a job in Australia, with trend unemployment rate at its lowest in a decade.

Victoria has a promising employment market

The unemployment rate in Victoria stands at 4.7%, approximately 17.4% lower than the decade average. Victoria’s employment rate, however, is well above (13%) the decade average, making it the best state to secure a job across Australia.

Apart from the employment rate, Victoria was also ranked first in construction activity. This is the second time that Melbourne has beaten Sydney to the top spot in this sector.

The increasing construction activity gives a good investment prospect. Image Credit: Mail Online

Victoria retained top spot with construction work done almost 39% above its decade average.

NSW construction was next strongest at 31.4% followed by South Australia, up 25.3%. Construction work done in these states were at record highs in the June quarter.

Victoria also topped the ranking for the second consecutive time as the state with the highest economic growth. Last quarter, it knocked NSW off its perch for the first time in a decade.

Victoria leads the way in economic growth.

Economic activity in Victoria in the June quarter was 26.7% above the decade average level, ahead of NSW at 25.7%.

Victoria emerged the clear winner in CommSec’s latest quarterly economic rankings. Image Credit: CommSec State of the States Report (Oct 2018)

When looking across growth rates for the states and territories, it is clear that Victoria had exceeded the national average in all of the eight indicators measured, albeit by a narrow margin.

Last quarter, Victoria remained just ahead of NSW with strong economic strength, population growth, construction and investment activity.

Investment Prospect

The strong quarterly performance augurs well for Victoria.

Investors can look forward to leveraging upon these promising aspects of Melbourne, using it as a guide to future investments that could result in good rental yield and capital appreciation.  

By Lydia Devadas
Edited by Vivienne Pal

Source:

 

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