REIA’s property priorities:
will they align with the next Federal Budget?
We’re all feeling the pinch of hiked interest rates and the rising cost of living right now, but according to Hayden Groves – President of the Real Estate Institute of Australia (REIA), there’s a lot that the government can be doing to help Australians right now.
With Australian housing and rental supply at crisis point, Mr Groves has pointed to the Budget 2023-2024 for answers, stating that the Australian government should use this as an opportunity to create measures that assist Aussie property owners, renters and home buying hopefuls with staying afloat during tough times.
Five action points
The REIA Budget Priorities 2023 – 2024 has highlighted five focus areas that it believes should be implemented immediately to assist those struggling with the current housing situation. These are identified as follows:
- Commission an occupancy audit of all government owned housing
- Pin the rate of Commonwealth Rental Assistance to market rents
- Make interest rates tax deductible for first home buyers
- Commission a rapid response study to identify faster ways to build houses
- Work with Local Governments to identify latent capacity in housing stock
These action points, if implemented, would certainly help to relieve costs for homeowners, renters and those looking to enter the property market.
The REIA also makes two additional recommendations that would assist with improving the current housing crisis in Australia: unlock existing housing supply, and build more houses. It seems like a no-brainer when you think about it, but it remains to be seen whether the Federal government will take these suggestions on board in their 2023-2024 Budget.
Rising interest, falling values
Though we’ve seen falling house prices in recent months, Mr Groves says this has not eased the situation with regards to the Australian housing situation; this is partially because interest rates continued to rise, pushing mortgage repayments up higher than ever before.
Back in the September quarter of 2022, the total value of residential dwellings in Australia was $9,674.4 billion; this was actually a decrease of $358.9 billion in the quarter – the largest quarterly drop in the value of residential dwellings in Australia since the series commenced (in September 2011).
Then, in December 2022, the value of total new housing loan commitments continued to fall by 4.3%, despite sitting at record highs earlier in 2022. Add to that the fact that new owner-occupier loan commitments dropped 4.2% to $15.6 billion, and new investor loan commitments also decreased 4.4% to $7.9 billion.
Suffice to say, it’s been a difficult time to both buy and sell property in the last couple years.
Beyond the five action points agreed upon by REIA, Mr Groves highlights that there are schemes currently being offered by the Australian Government that are designed to assist buyers and owners with their property costs.
Housing Australia Future Fund, the National Plan for Housing and Homelessness, and the National Affordability and Supply Council are welcome initiatives to support “safer and more affordable housing” in Australia, and are said to be reinstated in the upcoming Budget, says Mr Groves. Hopefully this will lighten the pressure brought upon by inflation, giving Aussie homeowners a better economic outlook for the near future!
If the government were to take on board the REIA’s Budget Priorities for 2024, real solutions may be delivered to assist Aussie buyers and renters while alleviating the housing crisis we’re currently experiencing due to supply and demand.
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