What does the recent budget mean for retiring in a lacklustre housing market?

Making a lifestyle change that brings resort-style living to your door with all the great benefits of downsizing sounds pretty darn good. But with uncertainty in the property market – is it truly the right time relocate?

Considering the current real estate climate in Perth, things aren’t exactly looking up, so it might seem like the right idea to wait it out and stay put. Yet, do low prices also open a window of opportunity to buy low? And does it really make sense to forgo an incredible new lifestyle change today for prices that might not rise tomorrow? With all the advantages of this year’s budget, including one-off power bill relief, super flexibility for working seniors, and personal income tax cuts, there might be even more advantages to consider.

Real estate experts still have plenty of optimism around the current outlook for property on the West Coast and beyond. Domain recently forecasted that property prices for capital cities will fall at the end this year before experiencing modest price growth in 2020. It’s also projected that that Perth house and unit prices will wane in spring, and remain low until December 2019. At the end of 2019 the median house price is expected to be about $520,000.

Additionally, the results of the most recent ANZ/ Property Council Survey Index for June 2019 revealed that the confidence level in Perth has fallen from 129 index points in the previous quarter to 125. The ANZ now believes official interest rates won’t move until the second half of next year, and that Australia is facing a property correction that will hit almost every capital city. It’s predicted that prices in Perth will edge down three per cent this year and another one per cent in 2019, taking the fall in house prices across Perth well into its sixth consecutive year.

 

 

Is it really the right time to make the move?

So is it really the right time to re-anchor? According to Living Reality, it’s actually an optimum time to buy, and while the current WA market favours buyers, people also shouldn’t be afraid to sell. Manager and Licensee, Dave Gillon, has to say: “Picking the very bottom of any market is extremely difficult. Generally, by the time most people think we are at the lowest point, the market has already started to improve.”

The federal budget’s windows of opportunity

You don’t always get everything you wish for, but this year’s federal budget certainly still delivered benefits that are well and truly for the taking. For those ready to build a new dream lifestyle in the current climate, the government has initiatives that help pave the way.

Benefits like the one-off Energy Assistance Payment, can give eligible pensioners a one-off cash handout of up to $125 for couples before the end of the financial year. There’s changes to superannuation with more flexibility for working seniors in effect from 1 July 2020, where Australians aged 65 and 66 will be able to make voluntary superannuation contributions without meeting the government’s work test.

Those aged 66 and younger are also able to make three years worth of voluntary non-concessional contributions – so, $300,000 to their super in a single year. Personal income tax cuts for low and middle income earners will increase from $530 to $1,080. Taxpayers will be able to get this relief after they lodge their 2018-19 return. For people earning between $48,000 to $90,000, you’ll get the entire $1,080 tax cut with the relief cutting out at $126,000.

With the Medicare levy threshold increased for seniors, the government will slightly up the income threshold before the Medicare Levy is paid from $34,758 to $35,418 for single seniors and pensioners, and from $48,385 to $49,304 for seniors and pensioners with families.

And finally, the Pension Work Bonus will give every older Australian of pension age the option of borrowing against the value of their home to draw down an income stream up to one and half times the pension.

Land Lease Communities: A new wave on the West Coast.

With the market being fertile ground for new investment and the government edging people further towards their dream living situation, comes an increasingly popular homeowner model – Land Lease Communities. It’s for those over 50 year old’s who want to maintain their homeownership without having to buy the land they live on – smart!

With nearly 200 Land Lease Communities across Australia, their popularity is growing rapidly. An attractive feature is the financial model. By leasing the land on which homes in a Land Lease Community are situated, it provides access to rent assistance for eligible pensioners. The take up of new homes in Land Lease Communities can also be largely attributed to the impressive advantages where homeowners can experience a resort-style lifestyle in the community, without having to pay the earth for it. The Land Lease Community model is particularly well-suited for those who want to lead an active lock-and-leave lifestyle inside a secure community.

Today, Land Lease Communities like The Vantage at Vasse, are providing a brilliant, affordable solution with great value on investment. It’s a smart way to free up cash, pay no stamp duty, and keep any capital gain down the track. The demand for Land Lease homes is expected to grow and bloom with the new generation of liberated Baby Boomers seeking a new lease of affordable luxury living.