Budget Real Estate Sweeteners
Both the 2022-3 federal budget and opposition response were broadly supportive of the Australian property market, according to Pete Wargent, co-founder of Australia’s first national marketplace for buyers’ agents, BuyersBuyers.
Mr Wargent said: “The Coalition Government has proposed a significant expansion of the previously available home loan first deposit scheme. In the new form, the government’s Guaranteed Housing Scheme will make up to 50,000 places available per year, divided into three categories, including 10,000 places allocated specifically to regional first-time buyers”.
“The adoption of such a package is likely to be robust. While there will be affordability issues for homebuyers at first, we expect ‘mom and dad’s bank’ to step in and help fill any borrowing gaps over the course of the year. future.
“Unlike 2019, the opposition is not proposing sweeping tax changes this time around with respect to real estate, so the macro environment will be more important than the election outcome for the market outlook. housing,” Wargent said.
Regional boost in Australia
BuyersBuyers co-founder and CEO Doron Peleg said regional Australia would get a welcome boost from the proposed budget measures.
Mr Peleg said: “As well as measures to support regional first-time buyers on both sides of politics, a number of road, rail, energy and other infrastructure proposals will also benefit Australia’s regional cities.”
“Particularly with the return of international students and immigration beginning to rise again, detailed budget documents project a return to net overseas migration of 235,000 by 2025.”
“With natural population growth, this would equate to a very strong growth in total population of around 400,000 per year, which is likely to put pressure on housing supply.”
“Inflation will be the main concern over the coming year, although the budget assumes supply pressures will have eased or largely resolved by 2023,” Peleg said. .
Spotlight on lending standards
BuyersBuyers’ Pete Wargent said lending standards could come back into focus in the second half of 2022.
Mr Wargent said: “There have been discussions about whether high debt-to-income lending could be further restricted. But there is another challenge looming, and that is the chronic shortage of rental properties available to rent in many Australian cities and property markets.
“Weekly rental announcement figures point to further tightening this week, and the rental vacancy rate is falling to the lowest levels in around two decades. In some areas, vacancies are as close to zero as we could ever see.”
“Lending standards for investors have been very strict over the past half-decade, but banks and regulators may need to consider making it easier for potential homeowners to access credit later in the year. .”
“Newcomers to Australia are usually first-time tenants. If homeowners can’t borrow, where will everyone be living when the borders reopen? said Mr. Wargent.
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