Property and The Federal Budget 2021-2022
The Federal Government’s budget released last month included a raft of measures aimed at assisting the economy’s recovery from the COVID-19 pandemic including for the residential sector, infrastructure spending and the construction industry.
Boosting the residential market by increasing home ownership
The First Home Super Saver Scheme was extended. This means Australians can contribute up to $50,000 from their super fund to be used for a deposit, an increase of $30,000 from the previous amount.
The ‘Family Home Guarantee’ was a new initiative, introduced to support single parents with dependants (predominantly women) to enter or re-enter the housing market sooner, with a deposit of as little as 2%. The Family Home Guarantee will commence on 1 July 2021.
Finally, financial concessions have been allocated to an additional 10,000 home loans through the First Home Loan Deposit Scheme (New Homes). This scheme entitles eligible first home buyers to build a new home or purchase a newly built home with a deposit of as little as 5% and will run through to 30 June 2022.
These schemes may also assist with the growth of the apartment market and could spark a return of first home buyers to “off-the-plan” apartment purchases.
As part of the Government’s record $110 billion 10-year infrastructure pipeline, an additional $15.2 billion over 10 years is being committed to road, rail and community infrastructure projects across Australia. These new commitments will support over 30,000 direct and indirect jobs across the lives of the projects.
Whilst the property market is currently booming especially in the major cities, the increase expenditure in infrastructure projects should facilitate longer term growth in the residential sector as well as translating these positive numbers to regional areas.
During the COVID-19 pandemic, the HomeBuilder program was introduced to specifically protect jobs and catalyse economic activity in the construction industry. It was a requirement under this scheme that the construction of a new home or the undertaking of substantial renovations to an existing home occurred within 6 months from the date of the building contract. The Budget has extended this construction period to 18 months for all existing applicants. All applicants who signed contracts during the HomeBuilder eligibility period between 4 June 2020 and 31 March 2021 will have this extension applied to them.
The Housing and construction industry contributes 750,000 direct and indirect jobs to the economy, so the HomeBuilder program is seen as a way to fill the gap caused by border restrictions and a temporary slowdown in population growth.
Budget reports have also indicated that regional housing demand is growing faster than demand in metropolitan areas, with HomeBuilder and the New Home Guarantee scheme both cited as part of the move away from the cities.
If you would like further information please contact:
Ron Zucker 0410 590 111
Vincent Tripodina 0408 228 10
Chelsea Woodward 0404 065 899
Anna Polhill 0431 174 352