Push to help first home buyers in upcoming Federal Budget

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on February 04, 2022 Fact Checked
Push to help first home buyers in upcoming Federal Budget

The Real Estate Institute of Australia has outlined strong expectations for the upcoming budget, reinforcing the need for assisting first home buyers.

The Federal Budget, scheduled for Tuesday 29 March 2022, will likely outline the government's continued economic recovery plan from the pandemic. 

REIA President Hayden Groves said the REIA Pre-Budget Submission 2022 contains three recommendations to help first home buyers, unlock supply and create jobs in property:

Data from October shows housing affordability reached its worst in five years according to Bluestone. 

Stimulus

"We have seen a dramatic reduction of loans to first home buyers with a staggering fall of 21.5% over 2021, reinforcing the need for governments to address both housing supply and affordability for first-time buyers," Mr Groves said.

"On a national basis, the average loan size grew by $6,000 to $602,000."

Mr Groves also said interest rates should be tax deductible for first home buyers. 

"It's one thing to achieve a deposit, and another to service a loan in an environment as interest rates rise - something we have not seen in Australia for over 10 years," he said. 

Supply

"Politicians cannot talk about affordability without talking about supply," Mr Groves said.

"Affordability is at its worst point since 2008 where 45.8% of family income was required to meet mortgage repayments.

"At the same time, stock levels or property available for sale are in some areas up to 40% reduced from pre-pandemic levels.

"Coinciding with this is a lack of rental supply which has seen vacancy rates hit critically low levels of under 1.0%.

"Rents are increasing and those needing to rent properties are struggling to secure a lease."

Jobs

"Real estate has been one hugely impacted in terms of workforce retention from the Covid-19 pandemic with around 4,500 vacancies needing to be filled Australia-wide.

"Forty per cent of property management businesses are now facing staff shortgages due to lack of skilled candidates."

REIA solutions included extra funding for those reskilling from other vocations into real estate and property, such as expanding the Property Manager Mentorship program.

Calls to axe stamp duty

Among its budget recommendations, the REIA called for stamp duty to be axed.

"We need ... a national plan to phase out stamp duty," Mr Groves said.

"Stamp duty has made selling and buying a home more prohibitive which has contributed to a long-term downward trend for listings."

Despite the REIA's push for a focus on the housing market, the 2022 Budget lists the following as its main priorities:

  • Personal income tax cuts;
  • Business tax incentives;
  • New apprenticeships and training places;
  • More infrastructure; and
  • Record funding for schools, hospitals, aged care, mental health and the NDIS.

See Also: Why a Property Tax is Not the Answer


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Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

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