How the 2022 Federal Budget will Affect your Property Plans
Hundreds of Aussie homeowners (or prospective homeowners) are keen to know how the new budget will affect them and with the basic cost of living on the rise, the question of housing affordability is becoming increasingly significant in many people’s minds.
This year’s budget is focused on relieving the pressures of everyday living for Australians, as the economy continues to emerge from the pandemic. Cash handouts, tax cuts and halving the fuel excise were just a few of the announcements made on Budget night.
“So What will the new budget do for real estate?” we hear you ask…
As we know, COVID19 didn’t have the predicted effect on real estate; instead of stalling the market, it seemed to increase it. Prices skyrocketed, demand outstripped supply and many people were able to tap into government incentives to get a foot in the door.
At Love & Co, we’ve got a firm handle on what’s going on in Melbourne’s real estate that’s why we’re taking the time to look into what the new federal budget could mean for buyers, sellers and investors in Victoria.
A Note from the Top
Hayden Groves, the president of REIA (Real Estate Institute of Australia) describes the latest budget as “a reassuring budget for homeownership and all consumers or aspiring consumers within the property market”.
Big Dollars for Housing Schemes
With housing affordability one of the biggest concerns among voters, the government is certainly planning to spend big on its Home Guarantee Scheme.
This includes expanding the scope of the FHG (Family Home Guarantee), NHG (New Home Guarantee), and the FHLDS (First Home Loan Deposit Scheme), as well as introducing the new Regional Home Guarantee, which is aimed at buyers outside of the first-home buyers’ category.
The announcement of an extra 50,000 places in the FHLDS, is a major boost to the real estate sector, and certainly excellent news for single parents and first-home buyers. For many eligible Australians, the dream to own their own property just got a whole lot closer!
Of course, with property value caps in place, prices high and inventory levels low, many are questioning how many people will be able to find homes that tick all the boxes.
Helping Everyday Australians to Save
The new Federal Budget focuses heavily on helping everyday Australians with the cost of living, which will have a direct flow-on effect on the real estate world.
As part of a package intended to relieve financial pressure on households, the government will introduce an immediate 6-month cut to fuel excise, bringing fuel prices in many areas back under the $2/litre mark.
The budget also includes a once-off cost-of-living tax cut of $420 for eligible middle-to-low-income earners, a notable saving for people saving for a deposit on a home.
Will Housing Prices Continue to Rise?
The steady rise in property prices that we’ve seen over the last two years is forecast to cool somewhat, yet not dramatically right away. According to Tim Lawless of CoreLogic, Melbourne’s housing values were unchanged over the last month.
The demand for housing in regional Victoria is still high, with some residents from the cities taking the opportunity to make a ‘sea change’ or ‘tree change’ following extended lockdowns in the CBD. Family homes remain popular, with larger gardens, more bedrooms and privacy high on buyers’ bucket lists.
Want to know more about the new budget and how it will affect you? Reach out to the team at Love & Co today. We’re here to advise, support and help you through every step of your buying or selling journey.