The Treasurer delivered the federal budget on 25 October 2022. The focus of the 2022-23 budget was on the following:
- A five-point plan for responsible and targeted cost-of-living relief
- Investing in the Australian economy’s capacity and the Australian people’s capabilities to build a more resilient, more robust modern economy.
- Budget repair to pay for what’s important.
The five-point plan for cost-of-living includes:
- $4.7 billion over four years to deliver cheaper child care for 1.26 million families
- $531.6 million over four years to expand paid parental leave to 26 weeks by 2026.
- Provide more affordable housing through a new national Housing Accord.
- Support wage increases for the lowest-paid workers and get wages moving upward again.
- Provide access to cheaper medicines by reducing patient co-payments for treatments on the Pharmaceutical Benefits Scheme from $42.50 to $30 per script.
This cost-of-living relief could help home buyers improve their borrowing power. As Home Loan Experts CEO Alan Hemmings notes, ”Tax cuts and child-care cost relief could assist some borrowers, from an affordability perspective.”
What’s In The Budget For Homebuyers?
1 Million New Homes
Under a new national Housing Accord, the federal government will work with states, territories, local governments, investors and the construction industry, with a target of delivering 1 million homes within five years, from mid-2024.
More Affordable Housing
Also under the accord, the government will provide $350 million over five years to deliver 10,000 affordable dwellings with an energy efficiency rating of 7 stars.
The accord also builds on the government’s $10 billion investment to establish the Housing Australia Future Fund. The returns from the fund will be used to build 30,000 new units of social and affordable housing over the next five years.
The 30,000 new homes will be allocated to families affected by domestic violence, older women at risk of homelessness, and frontline workers.
Home Loan Experts Analysis
Hemmings said the Housing Accord, at a basic level, would certainly help with employment, as building 1,000,000 homes will help the building industry.
He further explained, “It should also go some way towards helping some of the supply issues, but we will need to see the mechanics of the scheme. The federal government was quite open in acknowledging that they will also need state and local governments to be on board.
“The scheme may also offer some assistance for renters,” Hemmings observed, “So they can move into and buy their own homes, particularly in a tight rental market.”
Defence Home Ownership Assistance Scheme
The government has committed $46.2 million to expand the Defence Home Ownership Assistance Scheme. The scheme supports veterans and Australian Defence Force members to buy homes through monthly mortgage interest payments subsidies.
The Defence scheme will join previously announced assistance for homebuyers, including the Help to Buy Scheme and the three components of the Home Guarantee Scheme: the Regional First Home Buyer Guarantee, the First Home Guarantee and the Family Home Guarantee.
The government also announced that it will attempt to bolster housing supply by offering more incentives for older Australians to downsize to free up stock for younger families. This will be done by exempting home sale proceeds from pension asset testing and expanding access to downsizer superannuation contributions.
Our mortgage brokers can help you apply for any schemes under the Home Guarantee Scheme, including the Regional First Home Buyer Guarantee. Call us on 1300 889 743 or enquire online today.