A Budget for the Times
The Real Estate Institute of Australia has welcomed the real estate measures in Budget 2022, calling it “a budget for the times.”
REIA president Hayden Groves said Budget 2022 would help push down runaway inflation and help mitigate challenges to housing affordability.
“With 50,000 new places coming online through the First Home Loan Deposit Scheme, this is a most welcome measure,” Groves said. “This is a $24 billion commitment in guarantees that could generate up to $30 billion in sales activity, which will directly assist first-home buyers into the market sooner as well as stimulating the economy. Setting up Australians into homeownership is a critical measure at this stage of Australia’s political and economic cycle, and it is applauded by REIA.”
Groves said REIA also welcomed the budget’s additional $2 billion to the National Finance Investment Corporation’s mandate to help enable additional supply of social and affordable housing.
REIA said the budget contained “some very good measures” that would help the economy. However, the organisation said the forecasts for inflation were “very conservative,” at 4.25% for 2022 and 3% and 2.75% over 2023.
“Even on these forecasts, wage growth is very modest over 2022 to 2023, which doesn’t augur well for interest rates and housing affordability,” Groves said.
Groves said Australia needed a strategy for longer-term and more sustained growth. “Budget 2022 addresses the transitory conditions Australia is experiencing with targeted measures,” he said. “However, more needs to be done to improve productivity and real wages, rather than just compensation for price increases and taxation reform. It is only through sustained economic growth that we will pay for the spending of the last two years, necessary as it was.”
REIA called for “a sizeable skills package” to help the real estate industry shape its future workforce.
“The 27% of Australians living in private rentals remain frustrated by our 45,000-property manager shortage, as do Australia’s real estate agencies,” Groves said. “Whilst we were disappointed to see the final intake of the very successful Boosting Apprenticeships continued only to the end of June 2022, and we hope the additional $2.8 billion for the five-year Australian Apprenticeships Incentive Program will be extended to all those who need it in the post-COVID world.”
Groves also said that the government needed to tackle the housing supply issue.
“One of the major areas governments can address housing affordability is to take a leadership role to unlock supply through National Cabinet,” he said. “This is obviously something that needs to be tackled in future budget cycles with all three tiers of governments, as until this is addressed, the right supply mix within our existing housing stock and new homes affordability is unlikely to improve in the near term.”
Groves said that, overall, Budget 2022 was reassuring for homeownership and consumers or aspiring consumers within the property market.
“Pre-election periods can mean Australians can be reluctant to list their home for sale or rent,” he said. “With a budget that deals directly with inflationary pressures, contains a moderate outlook for interest rates and supports key investment measures like negative gearing retaining bipartisan support, Australians should move forward with plans to sell and capitalise on the current strong market conditions. A great budget for homeownership – but more needs to be done to set Australia up for future success.”
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