The Albanese Government’s 2022-23 Budget has announced the National Housing Accord, which contains new initiatives that are designed to tackle housing affordability and supply issues in Australia.
The government’s aim is to align all levels of government, and the construction sector to help tackle the nation’s housing problem.
What is the National Housing Accord?
The goal of the National Housing Accord is to build one million new homes in Australia over five years from 2024.
Although this number is similar to the amount of new houses that where built in the five years before the corona virus slow down, the scheme aims to get the property construction industry back on track and implement new ways to improve on this number.
State and territory governments have agreed to build on the additional commitment with up to 10,000 new homes as well, delivering up to 20,000 new affordable dwellings in total.
What is the Housing Australia Future Fund?
The Australian Government is establishing the $10 billion Housing Australia Future Fund. The Funds aim is to build 30,000 new social housing dwellings over the next five years. The houses will be for women and children impacted by family and domestic violence, older women at risk of homelessness, and frontline workers.
What is the Help to buy scheme?
The Help to Buy shared equity scheme, is designed to assist homebuyers to purchase a new or existing home with an equity contribution from the Australian Government.
The Help to Buy Scheme is a government incentive which allows first home buyers (or second home buyers without a current property) to purchase with only a 2% deposit. The Government will then fund and own 30%-40% of the property.
While you would not be required to pay rent on the portion of the home held by the Government, it is expected that the Government’s equity contribution will be paid down over time, or paid back if you sell.
The eligibility criteria for the Help to Buy Scheme is as follows:
- Income of less than $90,000 p.a. for a single applicant, or $120k for couples / joint applicants
- Must be purchasing a property to live in & must not currently own a property in Australia or overseas
- Must be over 18 years of age
- Must be an Australian Citizen
- Must have saved a minimum of 2% deposit
- And be able to pay for all associated upfront costs, such as stamp duty, and bank and legal fees
What is the Regional First Home Buyer Guarantee?
The Regional First Home Buyer Guarantee is an Australian Government scheme that is designed to help regional customers buy a home in designated regional areas.
Starting 1 October 2022, 10,000 places are available each financial year to support regional first homebuyers purchase a new or existing home.
You can use the Regional First Home Buyer Guarantee to build a new home or buy an existing home with a deposit of as little as 5%.
To be eligible for the Regional First Home Buyer Guarantee, you must:
- be 18 years and over
- be an Australian citizen (permanent residents are not eligible)
- have lived in a regional area or adjacent regional area to where you are purchasing in for the preceding 12-month period to the date they execute the home loan agreement.
- apply either as a single or couple / joint applicant
- have earned $125,000 or less for singles or $200,000 or less for couples in the last financial year
- not have owned a home previously
What are the budget changes to downsizer contributions?
More older Australians will be encouraged to downsize their homes, freeing up housing stock for younger families.
The Australian Government is extending the exemption of home sale proceeds from pension asset testing from 12 months to 24 months. This will give pensioners more time to purchase, build or renovate a new home before their pension is affected. In addition, the Australian Government is expanding access to downsizer superannuation contributions to make a one-off contribution of up to $300,000 for people aged 55 and over.
Will the 2023 Federal Budget make property cheaper in Australia?
For people looking to buy property in older and well established suburbs this budget is not likely to have a significant impact on those property prices in the short term. But for people looking to buy in newer and outer city suburbs, these schemes are likely to create lower prices and more opportunities for people to enter the housing market for the first time.