Australia is growing faster than all major advanced economies in the world and well above the Organisation for Economic Co-operations and Development (OECD) average, as reported by the federal treasury in May.
No doubt, this growth explains the property sector’s activities over the past two years. Queensland has benefitted from higher-than-average growth rates for strata schemes and the change is evident.
Official data from the Australian Bureau of Statistics released in April showed a 5.1 percent fall in building commencements and 2.3 percent drop in completions for the December quarter, suggesting the construction boom has passed its peak. This does not appear to be the case in Queensland as the latest figures from the Department of Land Titles. comparing the first quarter of 2016 to the first quarter in 2015, there were 38 more schemes registered, an average of three schemes per day.
Keeping this growth of 3.7 percent year-on-year in mind, now is the time to follow suit for things that affect strata schemes on the periphery. Smarter investment in the Queensland strata sector is critical as we are in the middle of a series of strata developments having been approved and coming on the market. Brisbane in particular has seen so much growth that the relevant government departments are ensuring sustainability for these new communities, acknowledging the need to work on the bottleneck suburbs. Congestion is one of the biggest issues created by this growth and it is encouraging to see that the federal government has provided $6.7 billion for a Bruce Highway upgrade in Queensland . The state government is providing $2 billion for infrastructure programs, including $400 million for the Toowoomba Second Range Crossing and $250 million for the Gateway Motorway North between Nudgee and Bracken Ridge. Cairns and Townsville’s major roads have some upgrades, overtaking lanes and widening in the pipeline as well.
The Queensland government’s state budget is no doubt also putting in place triggers to stimulate growth – such as the first home-owners grant, which will jump from $15,000 to $20,000 over the next 12 months. The grant is intentionally higher for new housing to encourage new communities. There have; however, been some concerns from industry groups that the foreign buyers surcharge could have a detrimental effect on selling strata title units as well as getting new developments started. While the application of this tax is complex, it must not be underestimated that sometimes the smallest details can make a significant difference.
On that note, a positive (small) step for us at SCA is that the small business tax has been reviewed and the federal government is supporting this part of the economy better. Many strata businesses fall under the definition (annual turnover of less than $10 million) and will benefit from the new tax rate of 27.5 percent. This in turn has a positive impact on the strata owners as it keeps the professional administration of strata schemes affordable.
With these positive investments in strata in mind, we need the property law review back in focus to apply appropriate governance models and a modern administration for strata communities. SCA (Qld) has previously suggested a few “easy fix” options to the attorney-general that would take little effort to go through parliament knowing that there is bipartisan support for the review. The nationwide change in strata legislation is a sign that we are not alone in our endeavour to create more harmonious communities. SCA would very much like to embrace this change in Queensland as well.