The Real Estate Institute of Australia (REIA) has called on the Federal Government to do more to help first home buyers, unlock housing supply and create jobs in the industry.
In the REIA Pre-Budget Submission 2022, President Hayden Groves expressed concern about the sharp drop off in first home buyer activity over the past 12 months as house prices continued to rise.
“We have seen a dramatic reduction of loans to first home buyers with a staggering fall of 21.5 per cent over 2021, reinforcing the need for governments to address both housing supply and affordability for first-time buyers,” Mr Groves said.
“We are calling on the government to expand the First Home Loan Deposit Scheme (FHLDS) to allow more first home buyers to access the deposit guarantee and to expand the First Home Super Saver Scheme (FHSSS).”
With speculation interest rates are set to rise, Mr Groves said he wanted the Federal Government to make interest payments tax deductible for first home buyers.
“We have also renewed our calls for Budget 2022 to make interest rates tax deductible for first home buyers, even for a prescribed period of the loan, as is the case for property investors,” he said.
“It’s one thing to achieve a deposit, and another to service a loan in an environment as interest rates rise – something we have not seen in Australia for over 10 years – so we need to put in place fair and sensible recommendations to assist Australians coming into the marketplace.”
With house prices continuing to rise and unaffordability becoming a growing concern, Mr Groves said the government needed a better plan for housing supply.
“Politicians cannot talk about affordability without talking about supply,” he said.
“Affordability in Australia is at its worst point since 2008 where 45.8 per cent of family income was required to meet mortgage repayments.
“At the same time, stock levels or property available for sale are in some areas up to 40 per cent reduced from pre-pandemic levels.
“The weighted average median house price for the eight capital cities increased to $961,059 over the year to September 2021 while the proportion of income required to meet loan repayments increased to 36.2 per cent nationally.”
“Coinciding with this is a lack of rental supply which has seen vacancy rates hit critically low levels of under 1 per cent. Rents are increasing and those needing to rent properties are struggling to secure a lease.
“We need a plan to unlock supply for both buyers and renters that looks at everything to land release planning through to incentivising more rental stock coming online and a national plan to phase out stamp duty.
“Stamp duty has made selling and buying a home prohibitive which has contributed to a long-term downward trend for listings.”
Mr Groves said the property industry was struggling with the ongoing skills shortage and he wanted Federal Government to help.
“Real estate has been hugely impacted in terms workforce retention from the COVID-19 pandemic with around 4500 vacancies needing to be filled Australia wide,” he said.
“Forty per cent of our property management businesses are now facing staff shortages due to lack of skilled candidates.
“We are seeing agencies have great success recruiting candidates from sectors like tourism, aviation and retail and want to give Australian workers support and confidence to successful transition to a career in real estate from other roles.
“In Budget 2022, we’d love to see money from reskilling programs dedicated to a Property Manager Mentorship program to help Australians join the real estate sector.
“Real estate is an important part of Australia’s economy, and we want more Aussies in real estate jobs.”
