Ray White Now | The Midyear Reset Edition 81 | Page 22

PRIVATE SECTOR MOMENTUM
One of the most explicit messages from Budget 2025 is that the government will no longer be the primary driver of economic growth. That task, including housing market performance, is being handed off to the private sector.
“ With such a small pot of funds, any new spending initiatives would require savings to be found elsewhere,” Olsen notes.
This is mainly due to the government’ s operating allowance, which is essentially the new money allocated for government spending, being reduced to the lowest level in more than a decade.
Implications for the estate sector are twofold.
First, government capital injections into housing, including large-scale social housing investment, are unlikely to accelerate. Instead, the investment spotlight is on the private sector, where recent policies, including the
‘ Investment Boost’ – a 20 per cent upfront depreciation incentive for new capital investments- are designed to kickstart business-led productivity.
Secondly, local housing markets may see uneven impacts, particularly in areas where government investment was previously a significant employer or driver of infrastructure. With tighter financial management, the knock-on effects could potentially result in slower regional growth and lower property demand outside major centres.
However, stronger recent commodity prices, particularly in dairy, could offset some of this, providing an uplift in export earnings which could translate into increased housing activity, helping to stabilise values and underpin a broader market recovery.
“ Improved farmgate returns and rising export prices are breathing confidence back into regional economies, and that optimism is starting to show in housing demand.”
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