Federal Budget formalises three mooted housing measures

There was one surprise for the housing sector in tonight's federal budget, and three foreshadowed housing measures were made official. The federal treasurer Josh Frydenberg advised the parliament in his budget speech that new house starts were now at the highest level in 20 years. "New loans to first home buyers reached their highest level in nearly 12 years. "HomeBuilder has been a huge success and our $2 billion investment in affordable housing is bringing on more supply," he said. "Our housing measures go even further," he added. "Helping another 10,000 first home buyers build a new home with a 5 per cent deposit. "Supporting 10,000 single parents to purchase a home with a 2 per cent deposit. "Increasing the amount that can be released under the First Home Super Saver Scheme from $30,000 to $50,000. "Under the Coalition, home ownership will always be supported," he noted. The budget effectively continued the First Home Low Deposit Scheme for new homes and off the plan acquistions, and tweaked the First Home Super Saver Scheme, and introduced a new scheme for single parents. The 10,000 Family Home Guarantees will be made available for single parents over the next four financial years. The Family Home Guarantee will be available regardless of whether that single parent is a first home buyer or previous owner-occupier. Applicants have an annual taxable income of no more than $125,000. A fact sheet with further information on eligibility criteria will be available on the NHFIC’s website next week. The surprise announcement was the government will lower the minimum age for the downsizer super contribution from 65 to 60. “This will allow Australians nearing retirement to make a one-off post-tax contribution of up to $300,000 per person (or $600,000 per couple) when they sell their family home,” the budget documents advised. “This improves the flexibility for Australians to contribute to their superannuation savings, and may encourage people to downsize sooner and increase the supply of family homes.” The budgetary measure will be argued as positive for first home buyers and next home buyers by freeing up established housing stock for younger property buyers. There was a warning after the budget announcement from the Property Council on the long-term economic consequences of idling population growth. "Budget assumptions anticipate that Australia’s population growth will be limited to only 0.2 per cent over in the next financial year. Net overseas migration is forecast at -77,000 in 2021/22, with a return to normal levels of migration not expected until 2024/25," the PCA noted. “The Budget has revealed that our restricted border is the biggest constraint on our economy. “Our lack of growth is going to catch up with us with economic and employment growth expectations slowing over the forward estimates. “Population growth is not an optional extra for Australia’s economy," the PCA said. The budget also made $15 billion in additional infrastructure commitments including for: a) the North‑South Corridor in South Australia b) the Great Western Highway and Newcastle airport in New South Wales c) the new Melbourne Intermodal Terminal in Victoria d) the Bruce Highway in Queensland e) METRONET in Western Australia f) highway upgrades in the Northern Territory g) Light Rail Stage 2A in the Australian Capital Territory and h) Midland Highway upgrades in Tasmania.