Budget notes importance of housing market to economy: REIA

The accompanying material to the Federal Budget highlighted the importance of the country’s property market, an addition welcomed by the industry.

The 2019/20 Budget provides a fiscal stimulus by increasing infrastructure spending and delivering higher disposable incomes to 10 million low to middle income earners, according to the Real Estate Institute of Australia (REIA).

“Whilst there were no major surprises in the Budget, the measures will lift the brake of economic activity," REIA President Adrian Kelly said. 

“The Budget papers forecast private investment to fall by 7% in 2020/21 and a further 4% in 2021/22.

“The Papers highlighted the importance of the housing sector to economic wellbeing pointing out that a 10% drop in housing prices reduces real GDP by about 0.5%.

“Given the recent falls in house prices and the possibility of further falls, which will be exacerbated if the Opposition’s housing taxation proposals are implemented, it is timely to see the importance of the housing sector to Australia’s economy illustrated.

“With the Government’s commitment to not altering taxation arrangements for future property investors this means that the increased disposable incomes of low to middle income earners can be spent on goods and services and keep the economy ticking over rather than higher rents and worrying about decreasing equity.”