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NRAS Final Release in Doubt

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No positive news regarding NRAS round 5 release dates

Slide1Having the largest national stocklist of NRAS properties means we’re constantly asking about what’s coming next. So far, it’s not looking good. We have heard from multiple developers, all who engage with government at differing levels, that Round 5 NRAS allocations are on an indefinite ‘hold‘, and in some cases ‘under audit‘. If you impartially consider why this may be the case, you can see the underlying factors that may drive the release date back considerably, or cancel the final round of NRAS allocations.

Considering NRAS alongside economic principles and models, you can see that it is a nationally focused economic stimulus package, similar to the First Home Owner programs (FHOG etc.) : An investor is supported in their purchase of a new residential investment property, which stimulates the construction industry, bolstering the residential market, and encourages growth within the property sector on a national level. NRAS was released during the GFC (the same period when the FHOG received a boost), when the government required a nation-wide strategy to strengthen the Australian economy.

NRAS has achieved it’s strategic goal of bolstering the property market during a downturn

So considering the reasoning behind the NRAS program and our current economic/political environment, you have to ask whether round 5 will be released at all:

  • The national impact of the GFC has lessened since 2008,
  • The residential property market is showing strong signs of growth,
  • A similar stimulus package (FHOG boost) has been withdrawn; and
  • The Federal Government is actively looking for budget cuts (NRAS round 5 requires nearly $2b over 10 years).

Overall, the NRAS program’s driver has been minimised (GFC), its goals have been achieved (market growth), and its sister program has been cancelled (FHOG Boost), so rather than when to release it? the question now becomes why release it?

With all this uncertainty regarding future releases, the one thing that we’re advising investors is that the current portfolio has got NRAS allocations, but we can’t guarantee anything beyond that. With our current rate of sales, we anticipate round 4 allocations will be all sold by May/June.

Contact us today to discuss how to secure your round 4 NRAS property and take advantage of the Tax-Free benefits for investors ($120,000+ over 10 years).

 

Published on: Mar 3, 2014

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