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The 2022-23 budget is just days away from being unveiled, and home owners, home hunters and real estate industry insiders alike are hoping to see new spending measures to address the country’s housing affordability crisis.
Mathew Tiller, LJ Hooker’s head of research and business intelligence, has released his wishlist ahead of the budget announcement on 29 March, outlining three initiatives he believes would alleviate some of the pressure currently being exerted on property buyers.
- A focus on downsizers
Suburban houses are in high demand for young growing families and also in short supply. Mr Tiller would like to see measures that have already been introduced by the federal government to encourage downsizing or “right-sizing” among older Australians extended.
“In the 2017/18 federal budget the government made downsizing more financially beneficial. They allowed people aged 65 and over who sold their family home to make a one-off $300,000 ($600,000 for couples) contribution to their superannuation,” he explained, noting that the 2021-22 budget increased the eligibility for this scheme from the age of 65 down to 60 years of age.
“The upcoming 2022/23 federal budget should be further extended and expanded by increasing the contribution amount and again reducing the age threshold.
“In addition, the budget should further assist older Australians who want to downsize and relocate to do so by making it easier and cheaper,” Mr Tiller opined.
- Measures to address structural supply constraints
With Australia’s population growth stagnating due to years of COVID-closed borders, housing supply has been given a brief chance to catch up to demand.
The construction of new dwellings, while currently keeping pace with household formation in Australia, is expected to fall behind the expected need by 2024-2025 as international migration gets back up to full speed.
Mr Tiller sees this moment as an opportunity for the government to set a stable course for future supply and demand.
“There is a brief window in which the government can enact policy to address long term structural supply constraints to ensure that the dwelling supply deficit doesn’t get out of hand. This requires investment and a coordinated response from all levels of government to ensure constraints are removed and new housing supply can quickly respond to population changes and economic conditions,” he said.
He also stressed the need for the government’s housing plans to incorporate an increased level of investment in social and affordable housing to address affordability issues both in cities and popular regional areas.
- Investment in regional infrastructure
Finally, Mr Tiller addressed the trend that’s changed the face of Australian real estate over the past two years: the great regionalisation.
With Australians taking advantage of flexible working options to seek lifestyles outside of major metropolitan centres, many regional areas have been the beneficiaries of a large population influx. While the tide of movers may ebb soon, it appears that a level of decentralisation is here to stay, and the regions need to be equipped to cope with a larger number of residents.
“This population shift has, generally, been positive for local economies and communities. However, it has also put a strain on the essential services and infrastructure that supports the local population,” Mr Tiller noted.
“The federal budget needs to ensure adequate investment is earmarked for road, rail, health, internet, and education infrastructure, to ensure that this population trend is a benefit to local communities”.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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