The 2018-19 federal budget had no measures that specifically addressed housing supply and affordability, according to the Real Estate Institute of Australia (REIA).
The 2017 federal budget included a range of measures to address housing affordability with both supply and demand measures.
Listed below are some of the budget’s highlights:
Unlocking greater supply
The federal government aims to boost the supply of housing and encourage a more responsive housing market by:
- Providing $1bn to fund critical infrastructure, such as water infrastructure, to help speed up the supply of housing
- Working with the states to deliver planning and zoning reform to expedite development
- Releasing suitable Commonwealth land, beginning with Defence land at Maribyrnong in Melbourne, for housing development
- Investing more than $70bn from 2013-2014 to 2020-2021 on transport infrastructure across Australia
- Specifying housing supply targets via new agreements with the states and territories
The federal government is creating incentives to improve housing outcomes, including:
- Helping first-home buyers save a deposit via voluntary contributions into superannuation
- Reducing barriers for retirees attempting to downsize to free up larger homes for young families
- Improving the targeting of housing tax concessions
- Strengthening the capital gains tax rules to ensure that foreign investors are paying their fair share of capital gains tax
- Reforming foreign investment rules to discourage investors from leaving their property unoccupied
- Supporting economic growth and the jobs market to boost real wages
Improving regulator tools to address risks to the housing sector
The federal government is working to ensure that the Australian Prudential Regulation Authority (APRA) is able to respond with greater flexibility to financial and housing market developments that pose risks to financial stability.
This includes giving APRA new powers over the provision of credit by lenders outside the traditional banking sector. The government also recognises that housing pressures and risks may not be uniform across the country. As a result, the government will give APRA the ability to use geographically-based restrictions on the provision of credit where APRA considers it appropriate.
Whereas, there was nothing in this year’s budget that directly addressed this,” said Malcolm Gunning, president of REIA. “It was, however, pleasing to see that the government recognises the important role that the current taxation arrangements for negative gearing and capital gains tax play in increasing supply, keeping rents affordable and easing the burden on social housing by leaving these unchanged.”
Gunning added that the budget’s approach recognises the state of the property market and the impact that the Australian Prudential Regulation Authority’s (APRA) measures had in cooling the market, particularly in Sydney and Melbourne. Hence, Treasurer Scott Morrison, saw no need to make further adjustments.
“A boost to infrastructure spending, modest improvements in housing income for lower income earners, continued tax write-offs for small to medium business and growth in employment can be expected to be mildly expansionary, particularly for regional economies,” Gunning said.
“The good news for home buyers is that the budget is not expected to put pressure on interest rates as inflation is expected to remain within the RBA’s target zone. This expected interest rate stability comes at a time when housing prices in some of our major cities are showing signs of easing, leading to improved affordability for first-home buyers.”
According to Paul Drum, head of policy at CPA Australia, this year’s budget has been framed against a backdrop of a strengthening economy, with the forecasted additional revenue being used in part to fund personal tax cuts as well as an increased investment in infrastructure and the ageing population.
“The budget includes a raft of income tax, GST and superannuation changes that will impact individuals, businesses and super funds and therefore the provision of client-based business and investment advisory services,” Drum said.
“The government’s seven-year personal income tax plan promises much over a new glide path similar to the ten-year Enterprise Tax Plan. But, like the company tax cuts, the question is whether this plan will garner the support it needs to get through the parliament.”
Linda 姬琳达珍 and Carlos Debello (LREA)
琳达姬琳达珍Debello LREA – LJ Gilland Real Estate Pty Ltd
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