The federal budget was delivered last week and mostly focussed on stablising the economy with measures such as lower taxes, increased spending, job training and re-skilling workers.

While housing reform was not a strong theme in the budget, there were three direct property initiatives, and various other indirect initiatives that will also have an impact on housing.

Direct initiatives

Extension of the First Home Loan Deposit Scheme 

The First Home Loan Deposit scheme has been allowing first home buyers to purchase property with a five per cent deposit, limited to 10,000 places each financial year on a first-come-first-served basis. The extension means a further 10,000 places will be available from October 6, for people purchasing new builds. Price caps will also be raised, recognising that new builds are generally more expensive.

More low-cost financing for affordable housing 

An additional $1 billion was committed to low-cost finance to build affordable housing through the National Housing Finance and Investment Corporation (NHFIC). The NHFIC was established in 2017 to provide low cost, long-term loans for social and affordable housing. This will allow more people to access housing, as well as provide more construction jobs.

Additional funding for the Indigenous Home Ownership Program 

Indigenous Business Australia will receive an additional investment of $150 million to extend the Indigenous Home Ownership Program, delivering 360 construction loans in regional Australia and assisting Indigenous Australians into home ownership.

Indirect initiatives

JobMaker and JobTrainer 

While these initiatives are aimed at re-absorbing people into the workforce, they may also create buoyancy in both the rental and sales markets, as more people flow back into secure employment and are more able to access housing.

Infrastructure spending 

Much of this year’s budget allocation for infrastructure went into roadworks, which can have positive impacts on nearby housing by increasing accessibility to the area.

Support for regional Australia. 

$350 million has been committed to support regional tourism to attract domestic visitation, which may generate interest in regional dwelling markets.

Tax cuts 

Putting more money in pockets will always be a good thing for the housing market. The budget will bring forward the second stage of the government’s personal income tax cuts, backdated to 1 July this year instead of July 2022 as planned. Hopefully this will allow more people to save a housing deposit, as well as secure more finance.

So it’s not all doom and gloom for the property market, with many different factors currently supporting housing demand. The budget announcements, and other non-budget initiatives (RBA rate cuts, early access to super, JobKeeper and JobSeeker etc) should all combine to keep the housing market fairly stable.

Sentiment is high, which also keeping prices on the up.

Contact us if you would like to discuss your property options or would like a free non-obligation sale or rental appraisal of your property.