Australians are cashing in on the federal government’s tax cuts and handouts. Here’s what it means for local markets.
Economic growth for Australia has been modest at best in recent years, which has been in no small part due to the massive slowdown in Australia’s property market values, particularly in capital cities.
However, some new stimulus in the form of personal income tax cuts creates cause for optimism in the economy and housing markets more broadly.
Those tax cuts are pumping about $8 billion into the economy, and straight into the hands of investors, who are still riding the tailwinds of a federal election outcome which saw favourites like negative gearing and capital gains tax discounts remain firmly in play.
Each of these factors, and others, are why economists are revising their forecasts for key Australian property markets, and tipping that they will hit their bottom later this year, as opposed to in 2020 and 2021.
Other factors that are tipped to stimulate the economy, as described by accounting and advisory giant Deloitte, include:
- The Reserve Bank of Australia’s back-to-back interest rate cuts will help to stimulate wages and inflation
- There are also reduced pressures on bank funding costs and the Australian Prudential Regulation Authority has continued to relax some lending restrictions
- Government infrastructure investment remains strong, including from the states, being led by NSW and Victoria
- A modestly lower Australian dollar will continue to make our exports more competitive