The 2022-23 Federal Budget has officially been handed down, so what does this all mean for Real Estate? Within the budget there were a few different strategies aimed at assisting the housing industry, read on to find out more…
National Housing Accord
Housing supply has been one of the focuses with the Federal Government setting a target to build one million affordable homes over a five year period which commences in 2024. This will be done through a new National Housing Accord, which has been seen as a good start to tackling the housing crisis but is definitely far from a solution. Under this accord both state and territory governments will be accountable for meeting these targets and changing land release and zoning of properties.
Another item the accord is focusing on is 10,000 new affordable 7-star rated, which is the new standard raised from 5.5 stars, green homes which will be funded through a new financing model through the accord. The Nationwide House Energy Rating Scheme (NatHERS) rates Australian homes out of 10 based on its energy efficiency, things that impact the rating are: Layout, Insulation, Design Features, Building Materials, Orientation and Aspect.
The breakdown
The Federal Government has also extended the exemption of home sale proceeds from asset testing which is especially important for pensioners looking to relocate without affecting their pensions.
A few other mentions are the previously announced: Help to Buy equity scheme, First Home Guarentee Scheme, Regional First Home Support Scheme being actioned. All housing tax settings are safe (including negative gearing). The acceleration of the $10 Billion Housing Australia Future Fund.
What the experts say
REIA President Hayden Groves highlighted the importance to remember that the recent budget won’t be an immediate fix to the housing and rental affordability issues.
Mr Groves mentions “Since May, repayments on a $500,000 mortgage have increased by almost $700 each month, and household savings is forecast to slump below pre-pandemic levels,”
“Constraints on housing supply, including a backlog of new builds from supply chain pressures, all mean affordability pressures for home buyers and renters are unfortunately likely to continue.”
“affordable housing measures, whilst both necessary and welcome, will have no immediate impact on housing and rental affordability and availability woes for many Australians”. He concludes.
So we can definitely see a firm stance on housing supply and affordability with the 2022-23 Federal Budget.
