What the Federal Budget did for Newcastle real estate

The Federal Budget delivered on October 6 included $98 billion in new economic support to help us deal with the pandemic and recession. It included personal tax cuts, tax breaks for business and a new wage subsidy for young people.

What it’s done for property so far is raise confidence, with Westpac Chief Economist, Bill Evans describing an “extraordinary” surge in Westpac’s monthly consumer confidence index released a week after the Budget on October 14.

General consumer sentiment nationwide skyrocketed by 11.9% to 105 points in October, up from 93.8 in September, which is the highest level since July 2018 and 10% above the six-month average recorded immediately before the virus hit our shores.

Westpac’s monthly survey also canvasses house price expectations. In NSW, confidence in prices surged by 22.8% to 111.7 points and the ‘time to buy a dwelling’ index rose 11.3% to 120.4 points.

This all bodes well for the Newcastle property market, as people tend to delay major financial decisions such as buying or selling a home when they lack confidence, as has been the case during the virus until now.

The Budget also included another 10,000 loan guarantees under the highly popular First Home Loan Deposit Scheme. Although this batch of guarantees will be limited to newly-built or off-the-plan properties, the price caps have been raised. In Newcastle, the cap is the same as Sydney at $950,000.

The FHLDS allows young people earning less than $125,000 as a single or $200,000 as a couple to buy a property with just a 5% deposit and no expensive Lenders’ Mortgage Insurance (LMI).

The Budget also included $360 million to fast-track the Newcastle Inner City Bypass from Rankin Park to Jesmond. We already know that major new infrastructure, especially transport improvements, gives home values a boost.

If you are thinking of selling before Christmas, please give the Robinson team a call today on 4902 7222.

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