The Real Estate Institute of Queensland (REIQ) and LJ Hooker have welcomed the Government’s housing initiatives but are calling for greater action to create substantial change in the market.
REIQ CEO Antonia Mercorella said the budget is a good start but there are still significant housing challenges facing Australians.
“Homeownership remains out of reach for many,” Ms Mercorella said.
“Resolving housing supply constraint issues and promoting other housing supply alternatives, such as prefabricated homes, are the cornerstones for more affordable housing.”
She said Queensland is falling significantly short of necessary dwelling approvals, with approximately 35,800 dwelling approvals recorded in the 12 months to January 2025, well below the National Housing Accord target of 49,000-50,000 dwellings annually.
The government has allocated $54 million to boost advanced manufacturing of prefabricated and modular homes, which could help alleviate housing shortages, particularly in regional areas.
These homes can be constructed more rapidly than traditional builds, though the industry requires greater scale to become financially viable.
“Prefabricated housing can be built much faster than a home constructed using traditional methods and is especially well-suited to regional and remote Queensland,” Ms Mercorella said.
“However, for it to stack up financially, the prefabricated housing industry needs to realise economies of scale through greater production volumes.”
The expansion of the Help to Buy scheme with increased income and price caps offers some hope for first-time homebuyers.
However, with only 10,000 places available nationally per year, including just 2,000 for Queensland, the program’s reach remains limited.
Political delays have also hampered progress, with the Help to Buy scheme now not operational until the second half of 2025, despite being introduced in late 2023.
“The REIQ also calls for greater bipartisanship regarding housing policies in the future so measures like this are not held up by politics,” Ms Mercorella said.
The REIQ has criticised the government’s upcoming two-year ban on foreign investors purchasing established properties, suggesting it will have minimal impact on easing housing market pressure.
Foreign buyers represent only a small segment of the market, with just 0.32 per cent of Queensland dwelling transactions in 2022-23 involving foreign purchases of established homes.
The budget does include positive measures for social housing, with the first two rounds of the $10 billion Housing Australia Future Fund set to deliver approximately 18,000 social and affordable homes.
Additionally, $1 billion has been allocated for crisis and transitional accommodation, along with $6.2 million over three years to support homelessness organisations.
Industry research also highlights the significant impact of government charges on housing affordability.
According to the Centre for International Economics, 41 per cent of the cost of a typical house and land package in 2023-24 consisted of taxes, regulatory costs, and infrastructure contributions, amounting to $348,000 on average.
The REIQ has called for greater collaboration between federal, state, and local governments to address these costs.
“The REIQ recommends the Federal Government consider how reforms to federal financial relations could support the National Housing Targets,” Ms Mercorella said.
“We encourage the Federal Government to work with state and local governments to reduce excessive costs such as taxes, and regulatory fees, among other costs, and devote more resources to tackle administrative barriers that impede the construction of new housing.”
Meanwhile, LJ Hooker Head of Research and Business Intelligence, Mathew Tiller, agrees the Federal Budget falls short of meaningfully addressing supply or affordability pressures in the short term.
“First-home buyers received a boost with an expanded Help to Buy scheme and there’s funding for modular housing and faster planning approvals,” he said. “Still, new housing supply remains well behind where it needs to be.”
While economic forecasts remain broadly positive, and interest rates are expected to fall, Mr Tiller notes that this may not translate into immediate relief for home seekers.
“Economic forecasts remain positive, and with interest rates expected to fall, home prices should continue to rise, although likely at a slower pace than in recent years,” he said.
“Long-term investments in infrastructure and construction training will help supply over time but the impact won’t be immediate.”
