Big-spending budget lifts many boats

The budget puts money into the pockets of consumers – or leaves it there – with $17.8 billion in tax cuts and another $2.6 billion in support payments for pensioners in a direct effort to boost consumption. All going to plan, household consumption is forecast to rise 7 per cent by 2021-22.

That largesse could add $15 billion to the nation’s disposable income, a rise of 1.2 per cent according to Macquarie analysts. That will benefit some retailers and ultimately their landlords, as long as they are not already paying down the rent relief needed by tenants such as service operators and cafes.

“Aventus is likely a key beneficiary of these stimulus measures,” the Macquarie analysts wrote in a client note.

The federal budget also earmarks $1.5 billion to support priority areas in manufacturing. That stimulus, along with a $14 billion spend on infrastructure and the NBN rollout will help the owners of industrial property, including Goodman, as well GPT, Stockland and Dexus, according to Macquarie.

Stockland chief Mark Steinert welcomed those measures, saying that the budget focus on advanced manufacturing was “clearly going to lead into new builds on logistics land”.

“The infrastructure that is being planned, the $14 billion, that redefines the supply chain and we have seen a real focus regarding on-shoring and surety of supply chain,” he told a Property Council of Australia forum on Wednesday.

And just as the surge in e-commerce during the pandemic shutdown has helped the cause of logistics real estate, the budget boost to consumption would further support the sector, he said

“That movement of goods will also be positive for logistics.”

Morgan Stanley analysts singled out the budget measure of extending the First Home Loan Deposit Scheme by another 10,000 lots. That increase is limited to new construction, which would benefit residential developers including Stockland, Mirvac and Lendlease, according to Morgan Stanley.

Lendlease’s chief executive for property, Kylie Rampa agreed.

“An extra 10,000 first home buyers stand to save tens of thousands of dollars in the purchase of their first home and this will boost activity in our sector,” she said.

“We would similarly encourage the government to consider a future expansion to their highly successful HomeBuilder scheme to support jobs and economic activity into 2021.”

However, Macquarie analysts described the budget initiatives as delivering only a “minor boost” for the residential sector, given there was no change in the HomeBuilder program.