This article is from the Australian Property Journal archive
THE federal government has placed its bid in the race for housing votes in the 2022-23 Budget, doubling the places under its Home Guarantee Scheme to 50,000 spots each year, though critics are calling for more to be done in addressing the affordability crisis.
Initially established in the 2020-21 Budget, the Home Guarantee Scheme – previously referred to as the First Home Loan Deposit Scheme – will be expanded to 50,000 places for three years, before again dropping to 35,000 per year.
As previously announced, these first three years will see 35,000 spots will be allocated to first home buyers, 5,000 under the Family Home Guarantee and 10,000 under the new Regional Home Guarantee.
This reflects a government investment of $8.6 million in the four years from 2022-23, $138.7 million in the 7 years starting 2026-27 and $20.5 million per year ongoing from 2033-34.
At the same time, the government will increase the NHFIC’s guaranteed liability cap to $5.5 billion, an increase of $2.0 billion, to support increased loans.
So far the scheme has already enabled more than 30,000 households to enter the property market with a 2% or 5%, with 60,000 Australians utilising the scheme.
The budget also introduces the new Regional Home Guarantee, which will also be open to non-first home buyers and permanent residents to purchase or construct a new home in regional areas.
This follows the opposition’s recent announcement of its own scheme for first home buyers in regional Australia, revealing plans to help 10,000 regional families into their first home each year, as increasingly homeownership emerges as a crucial deciding factor in upcoming election.
Housing affordability is becoming more out of reach with house prices increasing by 25.1% in December 2021, with research revealing Australians need to save for at least eight years for a deposit, while and over 40% of voters in most Sydney, Brisbane and Melbourne electorates are experiencing rent and mortgage stress.
Stresses look likely to mount, as with the NHFIC recently forecasting a drop in housing supply of 35% at the same time that Australia’s population growth restarts, resulting in a 163,400 home deficit by 2032.
Meanwhile the First Home Super Saver Scheme (FHSSS), which enables Australians to access their superannuation to build savings for a first home, will from 1 July 2022 see the maximum released voluntary contributions increased from $30,000 to $50,000.
The expansion of the scheme is aimed at getting first home buyers into the market quicker, with the FHSSS potentially increasing savings by 30%, when compared to a standard deposit account.
Additionally, the budget outlines $2.0 billion of funding to support state affordable housing services, with $1.6 billion allocated to the National Housing and Homelessness Agreement (NHHA) and the remaining $313.7 million to National Partnership payments, such as HomeBuilder.
The federal government’s contribution to homelessness funding through the NHHA will be matched by the states. With $501.8 million allocated to NSW, $420 million to VIC, $341.8 to QLD, $178.1 million to WA, $115 million to SA, $35.7 million to Tasmania, $28 million to ACT and $21.1 million to NT over the 2022-23 period.
Responses to the budget are looking mixed, with chief executive of Urban Taskforce Australia Tom Forrest decrying the absence of measures addressing housing supply.
“The Treasurer appears to have shelved the report published by the Federal Parliamentary Inquiry into Housing Affordability and Supply and in so doing, he has abandoned housing affordability,” said Forrest.
Forrest did however support the measures introduced in the budget, though again called for better consideration of the federal committee report that called for abandoning stamp duty in favour of a land tax, and while lifting tax impositions on the build-to-rent sector.
“While the [report] laid the groundwork for tonight’s Federal Budget, The Treasurer has left it on the shelf – hopefully to be dusted off and addressed another day. But with the election around the corner, an entire generation of millennials will be struggling to see how this budget offers them hope in their quest to buy a home,” added Forrest.
Powerhousing Australia also welcomed the investments outlined, particularly the increase to the NHFIC cap, while also asking for measures that go further to address affordability.
“We are pleased that the Federal Government has listened to PowerHousing Australia’s calls to increase the cap to tackle additional demand arising from massive price increases in rents, dwelling prices and flood related pressure on dwelling availability,” said Nicholas Proud, CEO of Powerhousing Australia.
“What will be a pivotal election issue will be the sheer lack of affordable rentals and this is the key area of focus in the 2022 Federal Budget to assist this group of people today.”
The Australian Institute of Architects expressed its dismay at a lack of ambitious measures for social housing and climate change.
Australian Institute of Architects National President Tony Giannone said the budget was a status quo proposal that failed to address the most critical challenges facing Australia.
“We are saddened at the lacklustre approach to both these issues. We acknowledge the $2bn in available funding to the National Housing and Finance Investment Corporation as a good step to increase affordability for the many thousands of people locked out of our housing market.
“But this is not enough to address the need of our most vulnerable. We called for $4bn in direct investment in community housing, codesigned with First Nations peoples, to deliver the social housing that is needed to address chronic undersupply of housing.”
Further, while Treasurer Josh Frydenberg again committed to a 2050 net zero trajectory the measures outlined in the Budget did not lay out how that would be achieved.
“Industry leaders in the property sector are demonstrating what is possible, but for large-scale, national changes to our built environment, we need government support. This was a disappointing omission.”
The Institute also pointed to the proposed utilisation of gas as a measure to reduce emissions.
“We are disappointed with this measure as it does not support the move away from fossil fuels and the transition to an electric future,” Giannone said.
While HIA had only praise for the Frydenberg’s budget, highlighting the new Australian Apprenticeship Incentive System which aims to address the skilled labour supply shortage plaguing the construction industry.
“This budget comes at a time when the housing industry is facing some of the greatest challenges on record. Supporting home builders to meet the housing needs of all Australians will deliver on the nation’s home ownership aspirations,” concluded Graham Wolfe, managing director of HIA.
