2023 Federal Budget: Mixed Reactions from Property Industry
The recently announced federal budget has garnered a mixed response from the Australian real estate industry. Although increased migration levels and focus on housing affordability were welcomed, concerns remain over housing supply, and builders are considered among the budget’s losers, as reported by Henry Thai in “Federal Budget 2023: Property industry responds”[1].
The budget proposed a range of measures, including increasing the National Housing Finance and Investment Corporation’s (NHFIC) affordable and social housing debt by $2 billion, providing 1,200 affordable and social houses per state and territory through the Housing Affordability Future Fund (HAFF), and halving the Managed Investment Trust (MIT) Withholding Tax to encourage build-to-rent (BTR) initiatives[1]. Net overseas migration figures were revised, increasing the 2022-2023 projection from 235,000 to 400,000 and the 2023-2024 projection to 315,000[1].
Max Shifman, Urban Development Institute of Australia (UDIA) National President, said, “It’s hugely positive to see the May Budget take further steps to bolster housing attainability, ownership, affordable and social housing, as well as removing some of the inhibitors to Build to Rent”[1]. However, the UDIA National acknowledges there is more work to be done to boost housing supply, particularly given the higher projected migration levels[1].
Additionally, Treasurer Jim Chalmers announced expanded eligibility for several home buying schemes in the federal budget, including the First Home Guarantee, Regional First Home Buyer Guarantee, Family Home Guarantee, and The Home Guarantee Scheme[2]. The changes, which come into effect on July 1, are intended to make it easier for first home buyers and those who have not owned a home for a significant period to purchase a property[2]. Renters will also benefit from a 15% increase in the maximum rates of Commonwealth Rent Assistance[2].
The Australian Institute of Architects (AIA) and the Property Council of Australia (PCA) welcomed many of the budget’s housing initiatives but called for more investment in public housing and better planning across the country[1].
In response to the budget, Shannon Battisson, AIA National President, stated, “These initiatives will help to unlock Australia’s housing challenge. We will continue to support greater investment from the Australian and state governments into public housing”[1]. Similarly, PCA’s Executive Director, Gavriel Zorbas, emphasized the importance of delivering more housing: “The population growth outlined in this budget highlights the need for faster and better housing delivery and planning across our cities”[1].
Overall, while the 2023 Federal Budget’s housing measures have been met with some praise, there remain concerns about the housing supply in Australia and the need for more government investment and strategic planning.
References:
[1] Thai, H. (2023). Federal Budget 2023: Property industry responds. https://thepropertytribune.com.au/business-industry/federal-budget-2023-property-industry-responds/
[2] MacSmith, J. (2023). Federal Budget 2023: More Australians to get more help to buy a home. https://www.news.com.au/finance/real-estate/buying/federal-budget-2023-more-australians-to-get-more-help-to-buy-a-home/news-story/afdfb6e2a36f59498ed77b182c425abe
Responses