Will renters and would-be buyers get a leg up in the 2023 budget?

Warning against the implementation of knee-jerk policy reactions, such as rental freezes and rent controls, Mr Groves stressed: “Let’s focus on the things we can do now to help renters with the current crisis.”

“One of the obvious things the federal government must do this budget [announcement] is lift Commonwealth Rent Assistance, which over the past 20 years has simply not kept pace with the cost of living,” he stated.

“The second thing we must do is build more rental stock,” the president continued, noting that this will be achievable in part through the Housing Accord and the Housing Australia Future Fund.

Supply was also high on LJ Hooker’s budget wishlist. You can read more about it here.

Pointing to the Greens’ recent push for rent freezes and “fiddling with rental prices”. Mr Groves argued that while well-intentioned, such policies “will do nothing for rental supply now or into the future.”

From his perspective, “the introduction of a rental freeze would have far-reaching consequences with renters as the biggest loser”.

“It has a sexy short-term effect for politicians but as the market adjusts the consequences turn out to be dire.

“We know from international experience that rent freezes or controls will immediately reduce rental supply, discourage institutional and private investment in housing and reduce investor income needed to improve existing rental stock for essential things like heating, cooling and energy-efficient improvements,” he argued.

Mr Groves is not the only one calling for improvements to tenanted properties, with a senior lecturer at RMIT University calling for the retrofitting of homes to improve their energy efficiency and liveability.

Dr Nicola Willand, a senior lecturer in the RMIT school of property, construction and project management, said that while the introduction of electricity bill relief payments recently was welcome, more sustained relief is needed “to increase the uptake of solar photovoltaic panels among less wealthy households”.

At present, the uptake of retrofitting “is occurring unequally, with Australia’s low-wealth home owners and renters falling behind.”

She conceded: “Renters are more likely to struggle with energy bills than owner-occupiers. However, in 2019–2020, only 6 per cent of renters had access to free electricity from solar photovoltaic panels compared to 30 per cent of owner-occupiers.

“Renters tend to live in less energy-efficient homes than owner-occupiers. Renters may also be missing out on draught proofing and lighting upgrade subsidies,” she flagged.

On the home ownership front, the chairman of Raine & Horne has called for more supports be put in place to help younger generations of Australians “take their first step in the property market.”

Angus Raine was applauding the recent expansion of the First Home Guarantee and the Regional First Home Buyer Guarantee to allow co-buyers, such as siblings and friends, to get onto the property market with a deposit of just 5 per cent, when he suggested more still needed to be done to support aspirational would-be buyers.

He raised that “one of the key elements of Labor’s 2022 election platform was a shared equity scheme called Help to Buy, designed to assist up to 10,000 low to middle earners own their own home.”

“Yet here we are, fast approaching mid-2023, in the midst of a serious housing crisis, and we are no closer to a shared equity scheme being available,” Mr Raine flagged.

Help to Buy was initially floated in May 2022, by the then Labor Opposition. As it was outlined, the scheme would provide eligible home buyers with an equity contribution of up to 40 per cent of the purchase price of a new home and up to 30 per cent of the purchase price for an existing home.  
 
Mr Raine noted that under the plan, a home buyer would need to have a deposit of 2 per cent and qualify for a standard home loan with a participating lender to finance the remainder of the purchase.   

While the chairman noted that the government had doubled Foreign Investment Review Board application fees “with the express purpose of funding Help to Buy”, he conceded that “desperate home buyers still have no indication of when the scheme will commence.”

“We can only hope that the upcoming federal budget provides some sort of clarity on the availability of the Scheme, allowing Australians to make firm plans to get started in the housing market,” Mr Raine outlined.

If the government does allocate funding to bring Help to Buy to life tonight, he argued that a comprehensive communication strategy would become “essential” to ensure consumers are informed correctly, warning that “in a crowded news environment, many schemes fall flat simply because people aren’t aware of what’s available”.