“We have a plan to create jobs, rebuild our economy and secure Australia’s future,” said PM Scott Morrison, hours ahead of announcing the Federal Budget.
Mathew Tiller, head of research at LJ Hooker, went through each of the major budgetary concerns with an eye for what it could mean for the real estate sector.
“The central focus of the 2020/21 Federal Budget is to steer the Australian economy through the current and future challenges stemming from the COVID pandemic,” Mr Tiller explained.
“Welcomed income tax cuts will provide households with more money in their back pocket to spend on everyday expenses, and it will also support retailers as it will encourage households to spend more.
“With businesses under pressure from forced shutdowns and restrictions, the government will focus as much as possible on job creation, including new apprenticeships, providing wage subsidies and funding major infrastructure projects.
“This in turn will help support rental markets and help reduce the volume of homeowners being forced to sell. And, of course, the expansion of the First Home Buyer Deposit scheme will positively impact those wanting to enter the market.”
Income tax
Real estate implications: “This measure will help support mortgage holders, assist those who are saving for a deposit and help those looking to upgrade or purchase another property by increasing their borrowing capacity.”
Job creation
Real estate implications: “This measure will assist rental markets and help reduce the likelihood of major forced sales (mortgagee in possession sales).”
Infrastructure
Real estate implications: “In terms of specific property related initiatives, HomeBuilder was a major piece of the governments’ COVID response package. While there is no indication that this will be expanded, it has definitely supported and encouraged the buying of house and land packages in new land releases.
“One property measure which will be expanded is the First Home Buyer Deposit scheme.
“Currently, this scheme is available to 10,000 first home buyers and it is expected to increase by a further 10,000 places. This will also increase the limit on the purchase price of that property from $750,000 to $950,000.”
