The federal government’s Budget 2021-2022 has been released, and in it are a range of measures aimed at all areas of economic growth.
Called the ‘Pink Budget’, it includes initiatives aimed at boosting womens’ financial security and safety, increased aged care support, and infrastructure boosts.
The Budget also recognises that Australian real estate is a key driver of the economy, and features several announcements to support the sector.
This includes expansions to the current New Home Guarantee, First Home Loan Deposit Scheme (FHLDS) and First Home Super Saver, and a new Family Home Guarantee.
Realestate.com.au economist Paul Ryan says the extra 10,000 places promised for the New Home Guarantee, which helps first home owners build or purchase a new home with a deposit as low as five per cent, is very welcome.
“The New Home Guarantee will alleviate the deposit burden and at the same time it will lead to job creation and economic activity through homebuilding, rather than through people bidding up the prices of existing homes,” he says. “Getting into the housing market has always been difficult and at the moment that difficulty is the deposit, so they’re doing the right thing. But not everyone can access it, with the capacity constraints and the income and price limits as well.”
REIA President Adrian Kelly says that measures for people, property and small business are welcomed.
“REIA welcomes the Budget 2021 which is aimed at helping women and first home buyers and continues to provide taxation benefits for the small business sector.”
“The first Home Super Saver has been lifted from $30,000 to $50,000 and will greatly assist in easing the difficulties this group faces in obtaining a home,” Adrian says. “Expansion of this scheme has been a long standing REIA priority since it was first introduced and is a good taxation incentive which will help more first home buyers enter the market.”
While recent schemes have been aimed at first home buyers, the Family Home Guarantee targets a different demographic. It is aimed at single parents who may struggle to save a deposit on a single income, and, like the FHLDS, will operate by opening up a limited number of places each year. The scheme will run over the next four years, and allow up to 10,000 single parents to buy a home with a deposit as low as 2 per cent.
Paul says the Family Home Guarantee will help single parents who find it difficult to save a deposit while paying rent on a single income.
“But I’m not sure how many people will be in a position to make mortgage repayments, particularly in inner-city capital cities, on single incomes, particularly if they’re working part time and/or they’re paying for childcare,” he says, noting that the budget includes funds to make childcare cheaper.
But Shadow Minister for Housing and Homelessness Jason Clare says the changes don’t go far enough.
“It’s harder to buy than ever before, it’s harder to rent than ever before and there are more homeless Aussies than ever before.”
Property prices are forecast to increase by 20 per cent in 2021 and 2022, with economists at the big four banks forecasting gains of at least 10 per cent, up to 17 per cent, this year alone.