The Federal Government’s 2022-23 Budget has been announced, with the unveiling of new initiatives designed to tackle housing supply and housing affordability problems that many Australians face.
But what does that really mean for home buyers keen to secure a property?
What is the National Housing Accord and who will it help?
A key component in the government’s long-term strategy to create greater housing affordability and supply is the National Housing Accord. Its aspirational vision is to build one million new homes over five years from 2024. The plan requires a united effort from the federal government, states and territories, as well as institutional investors and the construction sector investment.
What will these Federal Budget initiatives mean for housing affordability?
Although news of the National Housing Accord offers impressive projections, in terms of how many houses could be built under the scheme, the reality is that it is unlikely to have any immediate impact for buyers looking for properties now.
Another measure in the Budget that may address the issue of affordable housing faster is around age eligibility for downsizer contributions, with the eligible age for downsizer contributions lowered to 55. This initiative offers tax-free benefits for Australians aged 55 and over who have sold property to make a one-off contribution of up to $300,000 to top up their superannuation for retirement. It’s a strategy that aims to encourage homeowners to downsize and boost property supply for young people and families.
When it comes to the impact of the Budget on first-home buyers, or upsizers who are keen to make that move to a larger home that can cater for their growing family, some experts see that this superannuation change may have a more immediate and potentially significant impact on property prices and affordability.
More money for social housing
In other property-related budget news, the Budget also includes the Housing Australia Future Fund. The announcement that the Labor Government would build 30,000 new social and affordable homes over the next five years was first made on the federal election campaign trail. With the release of this new Budget, Treasurer Jim Chalmers expanded on this earlier pledge and said that the National Housing Infrastructure Facility would now support an added 5,500 new homes.
Other previously announced schemes designed to support home buyers were also updated in more detail, including the Help to Buy Scheme, which enables up to 40,000 eligible Australians to buy their first home with a lower deposit and a smaller mortgage. Under the Regional First Home Buyer Guarantee, support for up to 10,000 eligible first home buyers in regional areas may also make a positive difference and help put people into more affordable homes.
Will these Federal Budget announcements make it a lot cheaper to buy property?
For those looking in sought-after suburbs, the reality is that any scheme aimed at creating greater supply and building more affordable homes – properties most likely to be built in outer-suburban or regional growth areas – won’t have a significant impact. But for those willing to look beyond the big cities and on the outskirts of Australia’s more desirable areas, there may yet be better bargains ahead.
This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.