Funds allocated for housing in last night’s Federal Budget have drawn a mixed bag of responses from the sector – some positive, some negative, and some on the fence.
As an overview, the Commonwealth Government has committed to double its Home Guarantee Scheme (HGS), unlock 50,000 new dwellings through the First Home Loan Deposit Scheme (FHLDS), and continue with their HomeBuilder program. The National Housing Finance and Investment Corporation (NHFIC) is set to receive a $2 billion top-up, which would support 10,000 more affordable homes.
REIA ‘welcome’ housing affordability measures
The Real Estate Institute of Australia (REIA) has described the 2022 Federal Budget as “for the times”.
REIA president, Hayden Groves, commented on the interest rate measures aimed at assisting housing affordability challenges and constraining runaway inflation.
“With 50,000 new places coming online through the FHLDS, this is a most welcome measure. 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 simulating the economy,” Mr Groves said.
“Setting up Australians into home ownership is a critical measure at this stage of Australia’s political and economic cycle and it is applauded by the REIA. We also welcome the additional allocation of $2 billion to the NHFIC’s mandate to help enable much needed supply of social and affordable housing.”
To tackle future housing supply, the real estate sector must continue to underpin Australia’s prosperity, Mr Groves said.
“The 27 per cent of Australians living in private rentals remain frustrated by our 4,500-property manager shortage as do Australia’s real estate agencies,” he said.
“Whilst we were disappointed to see the final intake of the very successful Boosting Apprenticeships [program] continued only until the end of June 2022, we hope the additional $2.8 billion for the five-year Australian Apprenticeships Incentives Program will be extended to all those who need it in the post-COVID-19 world.”
Mr Groves said that overall, Budget 2022 is “reassuring” for home ownership and all consumers within the property market.
“Pre-election periods can mean Australians can be reluctant to list their home for sale or rent. 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 bi-partisan support, Australians should move forward with plans to sell and capitalise on the current strong market conditions.
“A great Budget for home ownership but more needs to be done to set Australia up for future success.”
Australian Institute of Architects express ‘dismay’ at lack of social housing measures
The Australian Institute of Architects (AIA) has acknowledged the Federal Government’s $2 billion proposal to fund affordable housing but said it’s an unambitious measure.
AIA national president, Tony Giannone, called the Budget “a status quo proposal” that fails to address Australia’s most critical challenges.
“Before the Budget, the AIA called for multibillion-dollar funding to address our social housing crisis and the climate emergency. We are saddened to see the lacklustre approach to both these issues,” Mr Giannone said.
“We acknowledge the $2 billion in available funding to the NHFIC as a good step to increase affordability for the many thousands of people locked out of our housing market. But this is not enough to address the needs of our most vulnerable.
“We called for $4 billion in direct investment into community housing, codesigned with First Nations peoples, to deliver the social housing that is needed to address chronic undersupply of housing.”
Mr Giannone said he welcomed the $1.3 billion package for violence against women, particularly emergency housing, bus said the $7.7 million from the existing First Nations support fund being repurposed to the Indigenous Home Ownership Program was insufficient.
Property Council of Australia both wary of and welcomes Budget
The Property Council of Australia (PCA) has expressed a warning against the looming housing supply crisis and population growth but has welcomed the Budget’s “strong economic recovery”.
PCA chief executive Ken Morrison said this Budget’s economic recovery is a “truly remarkable national achievement”.
He said the Budget revealed the extent of Australia’s housing supply crisis, and dwelling investment levels are predicted to drop significantly from a five per cent growth this year into -0.5 per cent by 2023/2024.
“While the HomeBuilder Scheme saved jobs and delivered great benefits to households, the record pipeline of work it created will come to an end just as our population begins to recover, which will intensify the supply crunch we know is coming,” Mr Morrison said.
“Both HomeBuilder and the expanded Home Guarantee Scheme are welcome demand-side measures and cannot address the supply-side issues which increase the cost of new homes.
“The Government’s own forecasts from the NHFIC predict that housing supply is set to drop by 35 per cent right at the time population growth would resume, leading to a national deficit of 163,400 homes by 2032.”
Recent PCA research revealed 70 per cent of Australians believe the home ownership dream is out of reach for the majority of people in the country. Out of aspiring homeowners, 90 per cent said it’ll be one of the most important issues they’ll consider when deciding their federal election vote.
“Additionally, it was very pleasing to see in this budget that NHFIC will secure an additional $2 billion to help boost investment in affordable housing,” Mr Morrison said.
Everybody’s Home say some renters have been ‘abandoned’
Homelessness organisation, Everybody’s Home, said the Federal Budget will “worsen the housing crisis for low to middle income” renters.
According to Everybody’s Home, in the past year rents have increased 9.7 per cent and house prices by 19.6 per cent, while real wages fell at the same time.
National spokesperson for Everybody’s Home, Kate Colvin, called the Budget a “profound disappointment”.
“For the last two years, workers in industries such as aged care, childcare, and retail have been lauded as heroes of the pandemic. But the Budget has done nothing to help them out of the rental pincer,” Ms Colvin said.
“People on low and modest incomes need real housing solutions, instead they are getting rhetoric and Band-aids.”
She said Everybody’s Home’s Pre-Budget Position Paper outlined the benefits of constructing 25,000 social houses and noted the steep decline in federal social and Indigenous housing funds.
Additionally, social housing made up six per cent of all housing in 1994, yet today it’s just four per cent.
“The Federal Government cannot continue to shirk its responsibility. Social and affordable housing has been an area of shared responsibility since the first social housing was created in the 1940s,” Ms Colvin said.
“While some of the states are attempting to make up the shortfall, the truth is that they simply don’t have the financial firepower to fill the gap left by the Commonwealth. National Rental Affordability Scheme (NRAS) subsidies have expired because the Federal Government axed the program, further aggravating the housing affordability crisis.
“More than 22,000 affordable rentals are exiting the scheme over the next three years. Instead of providing necessary support to families struggling in the housing market, this Government is pulling the rug from under their feet.”
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