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Cities play important role in federal agenda

By Greg Bell

A week into Malcolm Turnbull's role as prime minister, it's already becoming evident that cities will remain the most important powerhouses in the country. He has appointed Australia's first ever federal minister for cities, who will be given the mammoth task of addressing current low levels of productivity.

It's also become evident that members of the public are more hopeful about what their new leader might have in store, as confidence levels have improved since his appointment. 

So what does the future hold for the country's biggest cities, and are there likely to be any potential benefits for office leasing on the Gold Coast?

Focusing on the importance of property

Minister for Cities Jamie Briggs will be given a number of key areas to deal with in his new role, including making sure there are sufficient property options available in the nation's biggest cities. There has been growing concern that supply is failing to keep pace with demand, leading many groups to call for urgent action before affordability spirals out of control.

Property Council Chief Executive Ken Morrison described the new federal position as a "key economic appointment" and one that bodes well for the future productivity of urban centres.

"With the property industry accounting for one-ninth of Australia's GDP and employing 1.1 million people – more than mining and manufacturing combined – there is an increasing urban dimension to the economy," stressed Mr Morrison.

Cities have already been identified by Mr Briggs as being in desperate need of revitalisation, which in turn will encourage stronger economic growth. He has also indicated an intention to lower taxes, a move that will no doubt be applauded by the property sector. Many groups have been calling for action on taxes for many years, not least because it has been identified as a barrier preventing further economic expansion.

New PM, renewed confidence

Consumer confidence had started to slide over recent weeks, but it appears Mr Turnbull's appointment may have led to a change in sentiment. As a result, demand for commercial property in Surfers Paradise and other areas could surge as people feel more optimistic about what the future has in store.

The ANZ-Roy Morgan Australian Consumer Confidence Index for the week to 22 September saw an improvement of 8.7 per cent. This cancelled out most of the 7.1 per cent decline witnessed over the previous fortnight.

Perceptions of the country's economic fortunes over the next 12 months saw a 25.8 per cent improvement. This made it the second-highest jump since the index began back in 2008. Meanwhile, economic confidence over the coming five years was up 13.4 per cent.

ANZ's Chief Economist Warren Hogan suggested the trend followed a similar pattern when the Coalition entered government in 2013. The real challenge now will be to ensure this progress can be maintained as Turnbull's policies and initiatives start to be announced.

Will the Gold Coast benefit?

A combination of improved sentiment and a renewed focus on cities should both work in unison for the benefit of Gold Coast commercial property.

The Property Council of Australia has already forecast that infrastructure will be a core area of investment, not least because Mr Briggs spearheaded $50billion in investment during last year's budget.

Although the economy may be improving, there are still signs it could falter at any time. This is why property needs to be given the support it deserves through action on taxation and encouraging the initiation of new projects wherever necessary.

Confidence will be an integral factor in this, providing of course Mr Turnbull's changes continue to be in line with the public's liking.

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