Ten experts have their say on the budget's implications for property
Ten experts have their say on the budget's implications for property
Reaction from property sector leaders to the 2022-23 Federal budget has ranged from effusive praise to harsh criticism.
Australian Property Investor Magazine has sought and sourced input from ten of the most respected commentators from across the spectrum of the industry to get their thoughts on a budget that will go a long way towards shaping an imminent Federal election, as well as the hopes and dreams of millions of Australian homeowners, investors, renters, aspiring first-home buyers and an industry that employs millions.
Master Builders Australia, CEO, Denita Wawn:
“The Budget will provide some relief for builders and tradies hard hit by the increasing cash and cost crunch including measures to help SMEs to manage it. Temporary relief at the fuel bowser is a big win for the building industry. Builders and tradies who spend billions on fuel each year are reporting that they are being slammed by a 25-30 per cent spike in fuel costs in the March quarter.
The continuation of apprentice and wage subsides albeit at a lower rate from 1July is also a positive move.
The additional $17 billion in infrastructure investment over the forward estimates to boost the 10-year pipeline of projects to $120 billion is good news for civil construction sector and will support stronger economic growth. Just as importantly, the Government’s new procurement rules will give smaller construction contractors and subcontractors a realistic opportunity to tender for work on these projects.”
Real Estate Institute of Australia, President, Hayden Groves:
“Budget 2022 should help constrain runaway inflation and provide the right signal for interest rates and assist challenges to housing affordability.
With 50,000 new places coming online through the First Home Loan Deposit Scheme this is a most welcome measure. We also welcome the additional allocation of $2 billion to the National Finance Investment Corporation’s mandate to help enable much needed supply of social and affordable housing.
More needs to be done to improve productivity and real wages rather than just compensation for price increases and taxation reform.
The future of housing supply needs to be tackled. One of the major areas governments can address housing affordability is to take a leadership role to unlock supply through National Cabinet. This is obviously something that needs to be tackled in future budget cycles with all three tiers of Governments as until this is addressed, the right supply mix within our existing housing stock and new homes affordability is unlikely to improve in the near term.
We welcome the additional allocation of $2 billion to the National Finance Investment Corporation’s mandate to help enable much needed supply of social and affordable housing.”
WLTH (digital lending and payments platform), CEO, Brodie Haupt
“While the First Home Super Saver Scheme is great in theory, it’s caused all kinds of chaos in the new build market.
With land shortages and cost of building skyrocketing with issues relating to supply, and more recently around timber coming out of the Baltic, I think this mechanism will cause the opposite effect of what was intended and only add more pressure on the housing market pricing. This will likely see the demand for homes increase and until the Reserve Bank of Australia (RBA) lifts the lid on interest rate rises, this will only create future increases in property prices in the short-term.”
Commonwealth Bank of Australia, Chief Economist, Stephen Halmarick:
“With the budget deficit now estimated at 3.5 per cent of GDP in 2021/22 and 3.4 per cent in 2022/23, the extra stimulus the Budget will apply to the economy is relatively muted.
However, given rising inflation and strong employment and wages growth, we maintain our view that the Reserve Bank of Australia will raise interest rates in the near-term, with an initial increase to 0.25 per cent expected in June this year, rising to a peak of 1.25 per cent in early 2023.”
Australian Institute of Architects, National President, Tony Giannone:
“Before the Budget, the Institute called for multibillion-dollar funding to address our social housing crisis and the climate emergency.
We are saddened at the lacklustre approach to both these issues. We acknowledge the $2 billion 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.
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. As custodians of Australia’s built environment, we know there are ways we can improve efficiency and lower emissions in our homes, offices and buildings. 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.”
Urban Development Institute of Australia, National President, Max Shifman:
“The UDIA applauds the Treasurer’s 2022-2023 Federal Budget, which backs the housing and construction industry to prime the economic recovery and start tackling the affordability crisis.
The Federal Government Budget delivers on some important areas which will drive the economic recovery, bringing back migration and stripping away some of the barriers to delivering housing supply.
(There are) some positive first steps towards closing the housing affordability gap for Australians. The heavy lifting and leadership is what we now need to see, working with the State and Territory governments to fix housing supply and deliver coordinated city shaping infrastructure and urban development to meet the needs of Australians.”
Jeremy Goldschmidt, CEO, RentBetter
“Extending the First Home Buyers Scheme will certainly help generate demand from first home buyers, especially those who may hesitate on purchase decisions as interest rates rise. However, while this is a great initiative to get young people into the market, the Government needs to be realistic about the growth in the property sector. Median house prices in Sydney and Melbourne are roughly $1.6 million and $1.1 million respectively. Ideally, the cap should be raised closer to these figures to meet the market, which has skyrocketed in the past 12 months.
This may seem like a great way to add supply in the market, however, over the long term it could change the shape of ownership in the Australian residential property market and the ability for a new generation of 'retail mum and dad investors' to participate in an asset class that has created so much wealth in this country.
It is disappointing to see that build-to-rent was left out, with investors wanting an end to the 30 per cent withholding tax on foreign investors. We need more institutional investment in the property sector and need to provide more opportunities for build-to-rent operators.”
Real Estate Institute of Queensland, CEO, Antonia Mercorella
“This Federal Budget gets a tick of approval from us for its support for single parent families and first home buyers and its objective to encourage people to move the regions. However, while expanding the Home Guarantee Scheme is a good start and definitely a step in the right direction, it must be acknowledged that 50,000 places is not nearly enough to meet national demand.
This Budget misses an opportunity to encourage older Australians to sell the family home that is now too large and move into a better-suited sized home. There are thousands of under-utilised properties in Queensland and throughout Australia due to people living in their homes years longer than is suitable for their stage in life.”
Knight Frank Australia Chief Economist, Ben Burston:
“With overseas migration and population growth now returning, the dwindling supply of rental properties and rising rents are a key concern right across the country and so the decision to raise the liability cap of the National Housing Finance and Investment Corporation is a welcome step that will help to facilitate the expansion of affordable and social housing supply.
At the same time, the Budget is a missed opportunity to review the taxation treatment of the nascent Build-to-Rent sector to ensure that policy settings do not impede the flow of institutional capital ready to be deployed to help alleviate supply pressures in coming years.”
Professionals Australia, CEO, Jill McCabe:
“The budget failed to acknowledge a decade of historically low wage growth and the fact that previously predicted wage increases have not materialised with strong doubt that they will eventuate in the future.
While we welcome funding to prevent violence against women and supports women’s health care, this investment was very modest and a much stronger focus was required on social infrastructure such as education, health and housing and a fairer and more inclusive Australia.
With inflation expected to continue to rise, this budget does not provide lasting relief to families dealing with the spiralling cost of living. It doesn’t reduce the cost of groceries, power, rent, education, health and, of course, housing.”