Budget ignored ongoing property weakness, but no major
cuts to housing sector, assistance for seniors who want to downsize
THE property sector has once again missed out on Budget
love with little direct relief for home buyers, sellers and investors.
The Budget’s housing centerpiece is a $112 million trial
program to assist the elderly to downsize their homes without affecting
pensions, via a means test exemption of up to $200,000 for ten years. It is
designed to remove the disincentive for seniors to relocate to more
age-appropriate housing, however, the program’s requirements that homeowners
must have owned their family property for at least 25 years excludes many from
receiving the benefit.
The days of federal Budget baubles such as the $21,000
First Home Owners Grant are a thing of
the past.
Meanwhile, construction industry groups expecting
dedicated housing policy measures and supplyside reforms will be disappointed .
Among key initiatives they expected more incentives for
potential buyers, housing infrastructure funding reform, support for building
product manufacturers; support for trade training and job retention are
missing.
Any government will be very careful about reintroducing
the First Home Owners Scheme again or boosting it unless these is a big
economic shock and a risk of the housing market collapsing by 30 to 40 per
cent.
Grants had artificially inflated house prices against a
backdrop of rate cuts designed to bring the dollar into check and stimulate new
home starts.
Lack of any policy change will come as welcome relief to
local investors who were concerned they may be targeted by the Budget axe.
Key concerns for investors have been ongoing suggestions
that negative gearing benefits could be scrapped and and capital gains tax
increased.
Real estate groups have also lobbied for first-home
buyers to access their superannuation to purchase a property but this remained unchanged
in the Budget. Despite the lack of direct federal support for housing there are
some indirect benefits.
The budget included provisions for the government’s
National Rental Affordability Scheme (NRAS), which supports investment in
affordable rental housing, favoring projects supporting independent living for
elderly and disabled Australians.
Superannuation reforms were announced, including the
gradual increase of employer contributions from 9 to 12 per cent. The change to
superannuation requirements may to see an increasing number of Australian’s utilize their nest egg to invest in property.
By Balvinder Ruby
Managing Director REEX Real Estate.
www.reex.com.au