Here’s what the latest State Budget means for the property market
On the back of continued economic growth, Victorian Treasurer Tim Pallas delivered his fourth consecutive budget surplus on Tuesday. The Labor government demonstrated a strong focus on education, health and additional support for regional areas all coming off big winners. In addition, upgrades to the state’s roadways and train lines were also given a funding boost.
So, what does all of this mean for Victoria’s property market? We’ve outlined what you need to know.
Fast tracked planning for the North East Link
Easing the congestion on Melbourne roads and freeways has been a major concern in recent years, so the Victorian Government is continuing the trend of investing in big road projects is nothing new. The latest budget includes a combined $787 million for the Mordialloc Bypass and Monash Freeway upgrades, but it’s the $110 million to fast track the completion of the North East Link that could spell big changes for the local property markets.
This project will ease congestion by returning local roads to local residents, removing 15,000 trucks and 9,000 vehicles from some of the busiest areas. Greater accessibility and reduced travel times are sure to aid price growth and drive demand in the surrounding suburbs, such as Watsonia North (median house price of $797,500), Bundoora ($758,000) and Greensborough ($800,000).
Infrastructure upgrades for Australia’s fastest growing suburb
According to ABS data, the population of Cranbourne East grew by 27% between 2016 and 2017, making it Australia’s fastest growing suburb. With such a strong influx of people to south eastern suburbs, it’s no wonder the Cranbourne/Pakenham rail corridor has been congested. The latest budget will provide $572 million for further upgrades to Melbourne’s busiest rail corridor, including power upgrades and modern signalling.
Together with the new high capacity trains and the Metro Tunnel, they’ll be able to provide better services, more reliability and room for an additional 234,000 passengers during peak times each week. Areas such as Cranbourne East (median house price of $560,000), Pakenham ($495,000) and Sunbury ($520,000) will stand to benefit directly from these upgrades, continuing the house price growth that has been trending upwards for the past year.
Regional infrastructure and welfare improvements
It wasn’t just Melbourne’s city centre benefitting from the latest budget, with regional Victoria also gaining support in a number of key areas. The budget announcement included more than $704 million for regional rail upgrades, $26.2 million to support V/Line services and $2.2 billion for upgrades and repairs to regional roads. Schools were also given a boost in the budget, with $181 million to build, plan and upgrade 60 regional schools, and a further $135 million to upgrade 55 existing primary and secondary schools in regional and rural Victoria.
With a further $627 million to be invested in improving regional hospitals, the state government is proving to be committed to addressing the needs of regional Victorians and supporting the urban sprawl Melbourne is currently experiencing.
Along with last year’s incentives for first home buyers, we’re expecting to see strong growth and demand for properties in regional areas, particularly for young families. Areas like Ballarat Central (median house price of $410,000) and Geelong ($737,500) in particular will benefit, with both set to receive rail and road upgrades that will enhance their accessibility. As a result, we will continue to see steady growth in these regions.
For more information about how the latest budget might affect the property market, you can get in touch with your local hockingstuart office.