The recent election ‘upset’ in Australia is expected to provide a much needed boost to the country’s housing market, spiking a rise in interest for Australia property investment.
(UPDATED 11/6/19)
Posts
Tag: <span>Australia</span>
Australia is a diverse land that is home to a wide range of fascinating natural landmarks and iconic destinations. It is the world’s 12th largest economy, and ranks up there as one of the most well-developed countries in the world.
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
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
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
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.
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.
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.
Economic activity in Victoria in the June quarter was 26.7% above the decade average level, ahead of NSW at 25.7%.
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:
- https://www.commsec.com.au/content/dam/EN/Campaigns_Native/stateofstates/October2018/CommSec_State_of_the_States_October2018.pdf
- https://www.dailymail.co.uk/news/article-6326919/Why-Victoria-No-1-ahead-New-South-Wales-CommSecs-State-States-report.html
- https://finance.nine.com.au/2018/10/29/09/39/commsec-state-of-the-states-victoria-beats-nsw-on-economy
- https://www.commsec.com.au/content/dam/EN/Campaigns_Native/stateofstates/October2018/VIC_State_of_the_States_October2018.pdf
- Image Credit: CommSec State of the States (Oct 2019) report
Register your Interest
"*" indicates required fields
These next two months will be the last for foreign investors to make substantial savings on Perth property purchases. Come Jan 2019, Western Australia will join the rest of the country in imposing a stamp duty surcharge on foreign property buyers in the state.
Earlier this year, the Western Australia (WA) government announced that foreign buyers of residential property in the state will have to pay a stamp duty surcharge of 7%. WA is the last state in the country to impose a stamp duty surcharge on foreign property buyers.
The tax will be in force from 1st Jan 2019, and brings WA into line with the rest of Australia in imposing a foreign purchaser duty surcharge. This surcharge is now imposed by the six Australian states and the ACT at varying rates and scope.
Australian citizens, Permanent Residents and special category visa holders do not need to pay this tax.
Corporations and trusts are not exempted as long as foreign interests in the entity exceed 50%.
Residential developments with 10 or more lots are excluded from the tax.
Industry players like the Real Estate Institute of Western Australia (REIWA) have opposed the tax. Its outgoing President, Hayden Groves said the tax will cause an upward pressure on rental prices.
A turn for the better
Perth’s median house price for September was at $505,000, 1% lower compared to last year YOY. Comparatively, 3 years ago the median house price was declining at a more significant pace, recording a 4.2% decline between September 2015 and September 2014.
Although prices in Perth remain soft, the decline of house prices has slowed, which is good news and an indicator that prices are starting to bottom out. Improved affordability in the Perth housing market presents investors with an excellent opportunity to get in before the additional stamp duty kicks in on Jan 1st, 2019 and prices start to rise again.
Incoming REIWA president Damian Collins said that in this quarter leasing activity was up, median rents remained stable, stock levels had reduced, average leasing times were quicker and the vacancy rate had plummeted to its lowest level in more than four years.
Perth’s vacancy rate declined to 3.9% during the September 2018 quarter – the lowest level Perth has experienced since the March 2014 quarter.
Mr Collins said, “With all key market indicators improving during the September quarter, Perth’s vacancy rate has now fallen below the 10 year average.
“The rental sector is really leading the charge in the Perth property market recovery. The September 2018 quarter results are very encouraging and should provide landlords and investors with a lot of confidence.”
Interested in to get into the Perth property market before the 7% tax kicks in? One of the latest developments in the city’s prime CBD (central business district), NV Apartments, has a superb location with a whole host of luxurious amenities, from just A$313,000. Act quickly and give us a call at (+65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at info@csiprop.com.
By Ian Choong
Edited by Vivienne Pal
Sources:
- https://reiwa.com.au/about-us/news/perth-rental-market-has-strong-september-quarter/
- http://www.ironfish.com.au/blog/2018/06/06/foreign-investors-consider-western-australia/
- https://reiwa.com.au/about-us/news/foreign-buyer-surcharge-sends-wrong-message-to-vital-skilled-migrants/
- Featured image: Nomads Hostels
Register your Interest
"*" indicates required fields
Perth is set to be the next Melbourne, a new report from Infrastructure Australia indicates. After a stagnant 2017, Corelogic predicts that house prices in the inner city will rise by 3.3% this year and 4.1% in 2019. With prices at an affordable rate, property situated in choice locations are ripe for the picking and investors stand a chance to reap returns from the growth of the property market in the future.
Currently Perth is Australia’s fourth largest city by population. By 2046 it is forecast to leapfrog Brisbane into third place, with 4.3 million people — the current population of Melbourne. And if the Government’s recent proposal to restrict immigration to Sydney and Melbourne goes through, the city’s eventual population may exceed even that figure.
Australians traditionally are resistant to the idea of living in apartments, and this is more so for those living in Perth. Just 6.6% of the city’s residents live in apartments, half the national average of 13.1%. This will change as numbers increase — as a large-scale city grows, it expands not just outwards but upwards as well.
The Perth suburban sprawl stretches along the Western coastline for about 150km, making it almost nine times as large as Singapore, but with just over a third of its population. As the population grows to a similar scale as Melbourne, apartment living will become more widespread.
The 2016 Australian Census showed that there is one occupied apartment for every five (1:5) occupied separate houses in Australia; compared with one to every seven (1:7) 25 years ago. Apartments are also getting taller. Twenty years ago, about 20% of apartments were in blocks at least four storeys high, with the proportion now closer to 40%.
Over the past decade, the number of apartments in the Perth council area alone has increased by about 150%. Perth has seen changes in planning that recognises this, and state and local governments are encouraging strategic placing of mixed-developments where they benefit the most, close to existing good transport, infrastructure and in high-amenity locations.
One example of these developments is NV, a new off-plan apartment within Perth’s central business district (CBD), benefitting from the completion of the Perth City Link.
Perth City Link is a major urban renewal and redevelopment project to the tune of over A$5 billion, playing a central role in regenerating Perth’s entertainment, cultural, shopping and infrastructure links. Rail and bus links have been completed, connecting the city centre with the Northbridge entertainment precinct. Currently, further development is ongoing on a mix of retail, tourist, office and residential accommodation.
Corelogic looked at changes in the property market across Australia over the last 25 years, and found that prices in Perth grew at an annual 6.7% for houses and 6% for apartment units since 1993 — making it the third best property market after Sydney and Melbourne.
Following the nation’s property downturn, prices have slipped by more than 10% across the city since mid-2014, although some areas have managed to be relatively unscathed. The outlook for the next two years is that improvement in the economy and population growth will stabilise the Perth real estate market. After a stagnant 2017, Corelogic predicts that house prices in the inner city will rise by 3.3% this year and 4.1% in 2019.
RED ALERT: Perth will be imposing additional stamp duty for foreign investors in January, which is an extra 7% on the property price. Investors looking to buy property can avoid the hike by signing contracts before Jan 1st, 2019.
Interested in to get into the Perth property market before the 7% tax kicks in? One of the latest developments in the city’s prime CBD, NV Apartments, has a superb location with a whole host of luxurious amenities, from just A$313,000. Act quickly and give us a call at (+65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at info@csiprop.com.
By Ian Choong
Edited by Vivienne Pal
Sources:
- https://thewest.com.au/lifestyle/real-estate/perth-destined-to-become-the-next-melbourne-ng-b88972063z
- https://thewest.com.au/business/housing-market/perth-property-market-suffers-worst-fall-as-inner-city-and-south-west-suburbs-tipped-for-revival-ng-b88962488z
- http://www.abc.net.au/news/2018-01-16/perth-apartment-development-debate-suburban-sprawl/9324992
- https://www.perthnow.com.au/news/wa/new-figures-show-more-perth-residents-living-in-apartments-ng-8f60dd3e490dbac3aa5329aa42e51184
- https://cdn.mra.wa.gov.au/production/documents-media/documents/central-perth/perth-city-link/file/perth-city-link-fact-sheet.pdf
- https://www.mediastatements.wa.gov.au/Pages/McGowan/2018/08/$158-million-development-approved-for-Perth-City-Link.aspx
- https://www.finance.wa.gov.au/cms/uploadedFiles/_State_Revenue/Duties/Duties_Circular_17-Foreign_Buyer_Duty.pdf
- Featured image: State Library & TripAdvisor
Register your Interest
"*" indicates required fields
You’ve decided on an Australia property investment but have no idea what the purchase process entails. This article will guide you through some of the stages in the investment process.
It starts with choosing a property that fits your budget and investment goals, and appointing an agency that can take you through the purchase process — unless you prefer the hassle of flying to and from Australia and dealing with the developer/seller directly! It is important that your agent works closely with the developers, facilitating communication from the developer to you, and vice versa.
1. Property Reservation
At CSI Prop, we recommend investments based on your goals and budget. Once you have decided on the property for investment, you will need to sign Reservation Forms and a Solicitor Appointment Letter.
There are several payments required at this stage:
- Reservation Deposit*: MYR5000 (forms part of the purchase price and is non-refundable)
- Legal Fees*: approx A$2000
*Payment can vary depending on project/developer/solicitor
CSI Prop works closely with a panel of solicitors and mortgage brokers who are recognised in Australia. We’re happy to recommend our panel, but you also may use solicitors or mortgage brokers of your own choosing.
2. Exchange of Contracts & 1st Payment
Subsequently, you will sign the Contract of Sale for the property, and make your first payment to the developer. For apartments, this is 10% of the property price. For a land and house package, the first payment will be 10% of the land price and 5% of the building price.
You will also need to make an application with the Foreign Investment Review Board (FIRB). This process is required of non-resident foreigners before purchasing any residential property in Australia. The cost for this (as of 2018-19) is A$5,600 for dwellings valued at A$1 million or less.
3. Financing
Application for financing can be done 3 to 6 months before settlement, and the banks will assess your financing position and eligibility.
Documents typically required by the bank include:
- 3 to 6 months salary slips
- 3 to 6 months bank statements
- Income Tax Return Form
There are typically no application and processing fees to finance your property. However, the bank legal fees can incur up to 1.5% of the value of your property. There are several banks in Malaysia and internationally that offer financing, please get in touch with us to find out more.
4. Final Settlement & Stamp Duties
Once your property achieves completion, the developer will send a Completion Notice to your solicitors. You will need to make full payment for the property at this stage, which is also known as the final settlement.
At this point, you will also need to pay stamp duty, also known as land transfer duty, to the State Government. Stamp duties differ in amount across the different states of Australia, and the following rates covered here are applicable to residential property only. Different rates may apply to commercial property.
Victoria (Melbourne)
The following stamp duty rates apply in the state of Victoria for property that is not the buyer’s principal place of residence:
Foreign property buyers pay an additional 8% duty on top of these normal rates (stamp duty surcharge), unless exemptions apply. There are exemptions for Australian-based corporations or trusts which add to the supply of housing stock in Victoria.
In Victoria, Australian citizens, permanent residents or New Zealand citizens with a special category visa have the following exemptions:
- First-time buyers pay no stamp duty on a property that costs below A$600,000, or a reduced rate if the property has a value of between A$600,000 and A$750,000.
- Pensioners don’t have to pay stamp duty on a property that costs below A$330,000. They also get a partial concession on properties valued up to a maximum of A$750,000.
Western Australia (Perth)
These are the stamp duty rates for property in Western Australia:
Foreign property buyers pay an additional stamp duty surcharge of 7% in Western Australia.
Australian Capital Territory (Canberra)
These are the stamp duty rates in Australian Capital Territory:
Foreign property buyers pay an additional stamp duty surcharge of 0.75% in the ACT.
New South Wales (Sydney)
These are the stamp duty rates for property in New South Wales:
Foreign property buyers pay an additional stamp duty surcharge of 8% in New South Wales.
Queensland (Brisbane)
These are the stamp duty rates for property in Queensland:
Foreign property buyers pay an additional stamp duty surcharge of 7% in Queensland.
5. Property Management
When you exchanged contracts with the developer you may have signed an agreement to hire a letting agent. You may also have chosen to manage the property yourself.
The letting agent will ensure your property is well-maintained, taking care of all expenses involved, and collecting the rental on your behalf.
6. Rental Income
When you receive your rental income, you will need to pay income tax to the Australian Government. Different income tax rates apply for Australian residents and non-residents.
You may also be taxed again on your Australia income by the country where you’re resident in.
Malaysians do not need to pay taxes on rental income from Australia, to the Malaysian Government due to the double taxation agreement that both countries have. If you live in another country, you will need to find out if there is such an agreement between your country and Australia.
Income Tax for Non-residents in Australia
Taxes need to be filed yearly. You can file your taxes yourself, or hire a tax agency to do it for you. CSI Prop can recommend a qualified professional in Australia to manage your taxes.
Note that if you own a residential property in Victoria that remains unoccupied, you may be liable for Vacant Residential Property Tax (VRPT). The tax was introduced as a measure to increase available rental properties, and is at a rate of 1% of the Capital Improved Value (CIV).
7. Property Resale/ Exit
Should you choose to sell off your property, we can recommend a property agent and solicitor to assist you.
The agent’s commission rates, your advertising budget, and exclusivity will be decided by you and the agent. The agent will provide an appraisal of the property indicating how much they expect to sell the property for, and tell you how they plan to market your property. Agents fees vary according to state.
Legal fees generally range between A$700 and A$1300.
Take note that, unlike stocks, property is not a liquid asset, and you should always expect that it will take some time for the property to be sold.
Capital Gains Tax (CGT)
In Australia, capital gains are treated the same as income from other sources. Any net capital gain from the sale of a property is included as part of the seller’s income and taxed together with their other income. Capital losses can be offset against capital gains. Residents qualify for a 50% Capital Gains Tax discount, as long as they have held the asset for at least 12 months before disposal.
Click here for more guides on property investment, and please subscribe to our website notifications to get the latest updates! Leave us a comment below if you have any thoughts or questions on our article.
If you are interested to explore investing in Australian property for high returns, or if you need us to refer you to a good tax firm in Australia, don’t hesitate to give us a call at (65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at info@csiprop.com!
Disclaimer: This guide is an outline of CSI Prop’s purchase process, which may differ from other consultancies. CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review. You should also seek advice based on your particular circumstances from independent advisors and planners.
By Ian Choong Edited by Vivienne Pal
Sources:
https://www.sro.vic.gov.au/node/1485
On a recent cloudy Saturday afternoon, CSI Prop hosted yet another exciting and fun Investor Club event, honouring the King of Fruits and the pride of all Malaysians: a Durian Party in recognition of the favourite season of the year!
The party, held at DurianBB Park KL, was a smashing success. The place was packed with investors and their family members who arrived in excited anticipation of the durian spread. As the theme suggests, this day was all about indulging in durian and its greatness.
On the menu were sweet, pulpy, mouth-watering varieties of durians and delicacies made out of durian such as pies and tarts. Other tropical fruits like mangosteens, nangka and rambutans were also served alongside multi-flavoured ice-creams and fresh coconut juice.
The party kick started with a free flow of durian to every table where investors, alongside their family and friends, relished in the variety of durians, ranging from the mildest-tasting to the rich and creamy Musang King.
Ever the affable host, CSI Prop Director, Virata Thaivasigamony fleeted from table to table to greet and chat with guests. He then gave his welcome speech, where he shared about his own investment journey and some informative insights on the UK property and investment market.
Sam Lee of Capricorn Financial Consultancy and our guest speaker from the UK, spoke about the current state of the mortgage market, the various financing terms available and the lending criteria for property investment in the UK.
Switching gears, we had a short and sweet session on how to pick and sample durians according to its intensity of taste, courtesy of DurianBB Park’s Stella Heong. For example, did you know that the Musang King is the strongest-tasting durian and should be eaten last? Neither did we. Stella also shared that durian and mangosteen, being the ‘fruit couple’, should always be eaten together so that the heat from the durian can be neutralized by the juicy mangosteen.
What’s a party without games? Investors were invited to participate in a durian-tasting game and stand a chance to bring home a free durian. Our investor, Mr Alex Goh, was the winner, guessing correctly in just a matter of minutes!
The durian party was clearly a hit, judging by how quickly more than 200kg of durian were consumed (on top of other fruits and pastries!) and the gleeful smiles on the faces of our guests. The evening closed with our guests receiving a goodie bag of durian snacks.
Missed out on the last Investor Club event? Stay tuned for our next one in Q4 and wait for your invitation via email!
The CSI Prop Investor Club is open to all clients of CSI Prop. It is a platform for knowledge, fun and networking and is a realisation of our core values of Knowledge, Service and Having Fun.
By Lydia Devadas Michael Additions and edits by Vivienne Pal
Compared to developing nations with far stronger population growth rates, Australia is expanding pretty quickly for a developed country.
Last month, Australia’s population officially ticked past the 25 million mark, according to the latest data by the Australian Bureau of Statistics (ABS) – 33 years earlier than projected!
Over the last three years, the nation’s population grew by around 400,000 people per year. If this trend continues, the number might reach 26 million in the next two to four years. This is no mean feat considering that the population Down Under was only at the 10 million mark back in 1960.
Nett migration has continued to outpace births, with the highest migrant numbers coming from China and India.
Newly elected Minister for Cities, Urban Infrastructure and Population, Alan Tudge, in outlining plans for the country’s immigration policy, is not in favour of reducing skilled migrant numbers.
“My view has always been that Australia can be a bigger country. But, ideally, you have a broader distribution rather than very rapid growth in some areas,”he said.
Melbourne and Sydney are expected to grow to the size of New York city by 2050 as migration numbers continue to grow.
To date, Melbourne has the fastest-growing population rate in the country. Naturally, this has something to do with Melbourne’s ranking as the World’s Most Liveable City for seven consecutive years, receiving a perfect score from The Economist for healthcare, education and infrastructure.
“There’s a buzz about the city that keeps bringing the world’s best to enjoy Melbourne,” said the Australian government in a statement.
Victoria has an estimated population of 5.71 million, ranking second in the country with a population density of 25 people per sq km. The state accounts for 25% of the entire Australian population.
And, for the first time ever, Victoria finally overtook New South Wales as Australia’s strongest economy in CommSec’s latest State of the States report.
Victoria’s high population growth has also supported house prices and rental values in Australia, and is a reason why the Melbourne market has remained strong.
In quarterly data by JLL Australia, apartment price growth for Greater Melbourne (for both new and existing stock) increased 6.6% y-o-y to 1Q2018, which is above the five-year annual average rate of 4.5%. Rental vacancy remains tight in the city.
The recent 2018 Global Real Estate Transparency Index by JLL ranks Australia’s property market as the most transparent in the Asia-Pacific region. This, and the all the things that make Australia such an attraction — good governance, strong healthcare and education systems, etc — are a great draw for property investors and millionaires.
What do you think of Australia’s population growth for the Australian economy and property market as a whole? Leave your comments in the box below! For more details on investing in Australian property, call us at 65-3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at info@csiprop.com!
By Noorasikin Ali Additions & Edits by Vivienne Pal
Sources:
- https://www.edgeprop.sg/property-news/apartment-prices-and-rental-demand-remain-strong-melbourne
- http://www.abc.net.au/news/2018-08-07/australia-population-hits-25-million/10077100
- https://www.businessinsider.com.au/australian-population-growth-country-comparison-2017-2018-6
- https://www.smh.com.au/politics/federal/millionaire-migrants-pouring-into-australia-20180706-p4zpzm.html
- https://www.news.com.au/finance/economy/australian-economy/the-great-population-race-is-australia-winning/news-story/b8d69b5ece62fa57a4d2c328b9639c04
- https://www.domain.com.au/news/a-new-australian-dream-why-melbourne-and-sydney-need-to-be-more-like-new-york-20180813-h13vsg-757904/
- Feature Image: https://www.gizmodo.com.au/2016/02/australias-population-is-now-above-24-million/
- Secondary image from: https://www.news.com.au/finance/economy/australian-economy/the-great-population-race-is-australia-winning/news-story/b8d69b5ece62fa57a4d2c328b9639c04
Exactly one week ago, Malcolm Turnbull saw his three-year reign at the helm replaced by former treasurer Scott Morrison, following much political chaos within the ruling Liberal party. Australians and foreign investors alike will be keeping an eye on what happens to the economy and housing market. Here’s a snapshot of the new Australian PM.
Former treasurer, Scott Morrison is Australia’s new Prime Minister, replacing Malcolm Turnbull who stepped down after three years following a bitter tussle in the Liberal Party leadership.
Scott Morrison, or ScoMo, is also Australia’s 30th Prime Minister — the sixth, in fact, in the last 11 years alone. In a closed-door meeting of Liberal lawmakers last week, Morrison won 45 votes to 40 over right-wing populist Peter Dutton. Morrison was known as the most conservative members of the Liberal’s moderate wing.
ScoMo the Regular Joe
The Prime Minister is an observant pentecostal Christian who grew up in a Christian home, in the beachside suburb of Sydney. Married with 2 daughters (after a long 18-year wait and 10 attempts at in vitro fertilisation), Morrison had a brief career as a child actor, appearing in several TV commercials. He achieved some notoriety as managing director of Tourism Australia when he approved an $180m international advertising campaign that was subsequently banned in Britain for crass language.
ScoMo on Politics & Immigration
Morrison’s exposure to politics began at a young age. At 9, he handed out “how to vote” pamphlets on behalf of his father, a former policeman and local councillor who served as mayor for a spell. He was elected member of parliament in 2007, holding several positions in government, including minister of Social Services, minister of Immigration & Border Protection and, up until last week, Treasurer.
ScoMo was (in)famously an ardent supporter and enforcer of a contentious policy which turned away immigrants who tried to enter Australia illegally by boat. These asylum seekers were detained in offshore camps.
Conversely, when it comes to skilled migrants, Morrison is clearly a supporter and was known to rebutt former Prime Minister Tony Abbott’s proposal to cut migration rates.
According to Abbott, the current intake of permanent migrants had affected house prices and wage growth in Australia. He suggested that immigration numbers to be cut by 80,000 a year.
The suggestion did not sit well with ScoMo who felt that Australia had benefitted tremendously from skilled migrants.
“If you cut the level of permanent immigration by 80,000 it would cost the budget, it would hit the bottom line — the deficit — by $4 billion to $5 billion over the next four years,” Morrison quickly countered.
“Basically the economy (would not be) growing at the same level and people who come as skilled migrants pay taxes, make a net contribution to the economy.
“Currently two-thirds of permanent migrants have skills needed by the economy. A cut in overall numbers would reduce the skilled total and emphasise family migration which ultimately gets more dependent on welfare,” he added.
Australia’s foreign migrant inflow continues to drive the growth of the housing market.
ScoMo & the Housing Market
Morrison is a supporter of APRA’s regulatory controls, believing that it would help in rebalancing the market. This, according to an analysis in the Australian Financial Review, is part of what makes him a “property person’s prime minister”. He is no stranger to real estate, having worked as national policy and research manager for the Property Council of Australia for 6 years and, according to industry captains, has “shown a deft touch in managing fears around the overheated investment market”.
Morrison is well aware of the conditions of the housing market in Australia but holds a firm belief that the country is not headed towards a housing market crash, citing APRA’s regulatory controls to credit access will help create a smooth landing.
To date, Australia holds the record for not going through a recession for 26 years. During ScoMo’s watch as Treasurer, Australia’s economy grew 1% in 1Q2018 and 3.1% annually, placing Australia on top of advanced economies in terms of economic growth.
Looking Ahead
Up until now, not a single Australian Prime Minister has completed a full term. The frequent upheavals have left foreign allies uncertain, according to experts.
In his speech, the newly minted prime minister said, “We will provide the stability, the unity, the direction, and the purpose that the Australian people expect from us.”
What happens from here is anyone’s guess. There are supporters and naysayers on both sides of the political divide, but ScoMo has, at the very least, until May 2019 when the country goes to the polls, to prove himself and the Liberal Party worthy.
How do you think Scott Morrison will fare as the new Prime Minister of Australia? Share your thoughts with us in the comment box below. If you’re keen to learn more about investing in Australian property, call us at 016-228 8691/ 9150 (MY) or (65) 3163 8343.
By Noorasikin Ali Additions & Edits by Vivienne Pal
Sources:
- https://www.theguardian.com/australia-news/video/2018/aug/28/australias-new-pm-who-is-scott-morrison-video
- https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12113008
- https://www.nytimes.com/2018/08/23/world/australia/scott-morrison-prime-minister.html
- https://www.theguardian.com/australia-news/2018/aug/24/who-is-scott-morrison-churchgoer-behind-australias-tough-line-on-immigration
- https://www.nytimes.com/2018/08/24/world/australia/scott-morrison-malcolm-turnbull-prime-minister.html
- https://www.bloomberg.com/news/articles/2018-08-23/australia-waits-to-see-who-will-lead-country-as-turnbull-reels-jl6ibqux
- https://www.nytimes.com/aponline/2018/08/23/world/asia/ap-as-australia-politics.html
- https://www.smh.com.au/national/hockey-calls-for-compassion-in-funeral-row-20110215-1av7e.html
- https://www.news.com.au/national/politics/scott-morrison-slaps-down-immigration-reduction-calls/news-story/23f18bcc8a30010765d4a1ae0906420a
- https://www.theguardian.com/australia-news/2018/feb/21/scott-morrison-slaps-down-abbott-over-push-to-slash-immigration
- https://www.news.com.au/finance/economy/federal-budget/is-scott-morrisons-generous-budget-really-a-big-risk/news-story/e0f9fff4882d6ced2d174ab2db91a570
- https://thenewdaily.com.au/money/finance-news/2017/09/17/affordable-housing-treasurer-own-goal/
- https://www.afr.com/real-estate/scott-morrison-is-a-property-persons-prime-minister-20180826-h14jfz
- https://www.sbs.com.au/news/housing-policy-settings-right-morrison
- https://www.smh.com.au/politics/federal/scott-morrison-moves-to-reassure-investors-australias-housing-market-isnt-heading-for-a-crash-20171012-gyzgnp.html
- http://www.abc.net.au/radio/programs/am/australias-economy-strengthening-scott-morrison/9844018