Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Tuesday, 8 December 2015

Overflowing NSW coffers fund $70bn infrastructure boom

Stamp duty sure isn't a very popular tax for a number of reasons, but this property market cycle has certainly delivered an unexpected jackpot to the New South Wales coffers. 

From Robert Simeon, a 30 year veteran of Sydney property, over at Property Observer:

"Just last week we set (nearly doubled) the all-time record price for a Cammeray waterfront.  This week a developer released Chatswood Place, a $300 million boutique style development, and in just three hours set a new suburb record as well as securing $160 million in off the plan sales. This is the very same investment market which many were believing was well and truly finished.
[And then there is] the very cashed–up NSW government. Unlike the majority of state and territory governments NSW has an overflow of coin and it’s all going into the biggest infrastructure spend in the state’s history. 
Over the next four years the NSW government has allocated a staggering $70 billion infrastructure spend which is unprecedented. This in itself will singularly underpin the Sydney housing market given nothing stimulates the markets and consumer confidence like a massive infrastructure spend.
$38 billion is to be spent on new transport projects which will also include the second harbour tunnel, North West rail link, South East Light rail, Sydney CBD and WestConnex. The Transgrid lease which brought in a record $10.258 billion is still to be allocated although it has been confirmed that these monies will also be directed into new infrastructure projects.
So when one takes the time to actually look at what is going on I find myself (as do many others) not too worried about this so called recession [which some are predicting]. The last recession was 25 years ago and they aren’t very nice but when you have a state government pouring $70 billion into the NSW economy it would appear that NSW has more zoom than gloom.
When the 2016 property markets kick off I’m of the view that the areas within a 15 kilometre radius of the CBD will do very well. But expect more than a few to tell a different tale."