Yesterday’s budget failed to address any of the housing affordability issues facing Australia.
In announcing the Budget last night, Treasurer Wayne Swan announced a number of policies and strategies on development of skills, training and skilled immigration, as well as improvements to allow more private investment in large public infrastructure.
While these are positive and necessary measures, HIA’s senior economist Andrew Harvey said it was disappointing to see no provisions being made for the inadequate housing infrastructure.
“Unfortunately, the Budget does not offer any dedicated policies to relieve Australia’s chronic housing shortage, which at around 200,000 dwellings and growing, continues to place pressure on the household budgets of home buyers and renters,” he said.
Without assistance from the Federal Government new home building activity is likely to drop to GFC-like levels, yet the Budget fails to address the excessive cost of new housing which in some instances sees more than 40 per cent of the purchase price of a new house attributable to government taxes, fees and charges.
“Until the high taxation of new housing is reduced, and supply side obstacles removed, Australian families will remain locked out of home ownership and will continue to face high rental costs. There is only one way to make serious inroads into the housing affordability crisis – and that is by substantially increasing housing supply.”
Real Estate Institute of Australia president David Airey agreed not only has the budget failed First Homer Buyers it has done very little to assist people who are unable to even find rental accommodation.
First Home Buyers are already becoming “endangered species’. In October 2009 they represented 30% of the housing market purchases, today this figure has dropped to 15%.
“This is a market segment that desperately needs assistance to fund home purchase. REIA recommended in its Pre-Budget submission that the Government conduct a review of the First Home Owner Grant and consider providing first home buyers access to superannuation for the purchase of a home,” Mr Airey said.
This Budget will also do little to hold back expected increases in interest rates, this will further affect home loan affordability.
“It is disappointing that the Government has not realised the value of implementing long-term solutions to address housing affordability. We need to look at practical measures to give first home buyers the opportunity to realise the dream of owning their own home.”