Australia’s Federal Government released its 2018 Budget this week with a strong focus on infrastructure and development expected to boost the economy.

The Budget has proposed a number of multi-billion-dollar developments that will not only improve Australia’s current infrastructure landscape but also encourage foreign investment into a developing property market.

Infrastructure projects at a glance:

• $75 billion 10-year National Infrastructure Plan:
  
  • $9.3 billion Melbourne to Brisbane Inland Rail
  • $5.3 billion Western Sydney Airport
  • $2.9 billion Western Sydney Infrastructure Plan
  • $500 million M80 Ring Road
  • $500 million Monash Freeway Upgrade
  • $6.7 billion Bruce Highway
  • $1.3 billion METRONET, including $490 million for the Forrestfield Airport Link
  • $1.6 billion Adelaide North-South Corridor
  • $400 million Midland Highway
  • $67 million for Capital Metro
  • $192 million Northern Australia Roads Program.

The Government's Budget Overview Report expects this decade-long infrastructure program to improve road safety, tackle congestion, and deliver essential rail links which will, in turn, benefit the growing population and support the nation's property market scene.

Click here to view the Australian government's Budget website

For foreign investors, these initiatives are hoped to create attractive investment opportunities Australia-wide. 

The Australian Trade and Investment Commission reports that major infrastructure provides the ideal conditions for investing in Australia's buoyant economy, particularly as these developmental works increase Australia's trade footprint and support a growing population.

More on the Aus budget on The Real Estate Conversation:

• Federal Budget holds good news for buyers and sellers
• 2018 Budget ignores millennial's housing woes

Ex-FIRB Chairman Brian Wilson previously suggested that increased foreign investment in Australia is driven by increased investment in the real estate sector.  

Despite the changes introduced to foreign investment legislation in last year’s Budget, fervent interest in Australia’s property market, particularly from Asian investors, has not diminished.

Nikki Robinson from Clayton Utz suggests three primary reasons driving foreign investment:

1. The depreciating Australian dollar
2. The higher yields generated from real estate assets in Australia, and
3. The low cost of debt in Australia

Robinson notes that a trend of increasing prices is being caused by a great interest in Australian real estate assets. To combat this, many international clients are creating joint ventures with domestic participants in the Australian market in a process called Capital Partnering to enhance their acquisition ability for procuring real estate assets at the market’s current inflated prices.

As Australia moves into a new Budget year, it is hoped that the focus on infrastructure will continue to encourage foreign investment in Australia's real estate sector.

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