Federal budget 2024: What’s in store for real estate?

To that end, housing was a major focus, with Chalmers stressing that the government was unlocking funds to enable more homes to be built, while also delivering measures to help with housing pressures right now.

Off the back of a 15 per cent increase to Commonwealth Rent Assistance included in the 2023-24 budget, Chalmers announced the maximum rate would grow by a further 10 per cent for those receiving the benefit. With a price tag of $1.9 billion, he noted that it was the “first back‑to‑back increase to Commonwealth Rent Assistance in more than 30 years”.

The provision of further rental assistance, alongside energy bill relief, are estimated to “directly reduce headline inflation by ½ of a percentage point in 2024-25” - while not adding to broader inflationary pressures.

According to the Treasury, “this could see headline inflation return to the RBA’s target band by the end of 2024, slightly earlier than expected at MYEFO (the mid-year economic and fiscal outlook).”

Many of the housing initiatives – from infrastructure spending to skills training for the construction sector – were framed in light of the government’s goal of building 1.2 million homes over the next five years. It’s a promise that housing bodies are committed to working towards, while acknowledging that current projections see the nation falling short.

But Chalmers stressed that the government was committed to the plan.

“Our goal is ambitious – but achievable, if we all work together and if we all do our bit”.

Here are the housing-related measures intended to support that goal and other housing pressures contained in the 2024 financial statement:

Homes for Australia

As unveiled by Prime Minister Anthony Albanese last Friday, this year’s budget includes $11.3 billion to address the acute housing shortages facing Australians.

This package, called the Homes for Australia plan, includes $9.3 billion that has already been pledged over five years under the National Agreement on Social Housing and Homelessness, which will be dedicated towards repairing social housing and providing crisis support.

A further $6.2 billion in new investments was added to the plan in the latest budget, bringing the total amount of funding invested in housing since 2022 to $32 billion.

The Homes for Australia plan includes $1 billion for crisis and transitional accommodation for women and children escaping domestic violence, and for youth, pledged as part of the previously-announced National Housing Infrastructure Facility.

A further $1 billion has been committed to states and territories to build roads, sewers, water and community infrastructure to support new residential development.

The budget will also deliver $1.9 billion in concessional loans to help community housing providers construct 40,000 social and affordable homes.

Meanwhile, the $2 billion Social Housing Accelerant Payment will fund 4,000 new or refurbished social houses.

Rent assistance

Commonwealth Rent Assistance has been increased by 10 per cent, representing a total investment of $1.9 billion for the federal government.

“Rising rents are another big part of the inflation challenge, and we’re supporting renters who need our help,” said Chalmers.

Since 2022, Commonwealth Rent Assistance has risen by 40 per cent to mirror the steep upward trajectory of prices in the private rental market.

Chalmers noted that the rental assistance boost will provide “much-needed help for young people and renters of all ages doing it tough” amid a swathe of supply and affordability challenges.

Increasing the pipeline of construction workers

The government has earmarked $90.6 million within this year’s budget to boost the construction workforce.

This contribution aims to remove the cost barriers to education and training for construction careers with $88.8 million put towards 20,000 additional Fee-free TAFE training places to increase the pipelines of workers in construction and housing.

It also includes $62.4 million to flow to the states and territories that will provide an additional 15,000 Fee-free TAFE and VET places over two years from 1 January 2025.

Another $26.4 million was pledged to create approximately 5,000 places in pre-apprenticeship programs over the same period.

Within the latest financial statement, the government additionally committed to raising payments for apprentices in priority occupations from $3,000 to $5,000, and hiring incentives for priority occupation employers from $4,000 to $5,000 for 12 months starting from 1 July 2024.

According to the government, “this will provide certainty to apprentices while the Strategic Review of the Apprenticeship Incentive System is underway.”

Within the budget papers, the government stated that eligible Group Training Organisations would be reimbursed for reducing fees to small-to-medium enterprises seeking apprentices in priority sectors such as construction, clean energy and manufacturing.

In delivering their “biggest investment in social and affordable housing in a decade”, the government announced that this investment would help to overcome the liquidity challenges construction firms are facing as a result of the current cyclical downturn in residential building approvals.

Simplifying process for migrant workers

A further $1.8 million is devoted to simplifying skill assessments for around 1,900 potential migrants from countries with comparable qualifications who want to work in Australia’s construction and housing sector, and to prioritise the processing of around 2,600 skills assessments through Trades Recognition Australia in high-need occupations.

Supporting gender equality in priority sectors

The budget additionally revealed a $55.6 million investment into launching the Building Women’s Careers program which seeks to support gender equality and women’s participation across traditionally male-dominated industries, such as construction.

Enlisting real estate agents into anti-money laundering efforts

One of the line items that may impact real estate professionals the most comes under the guise of crime-fighting.

As announced earlier this month, the budget earmarks $166.4 million to implement reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime. This includes moving forward with so-called “tranche 2” reforms that will see real estate included among the professional sectors that are obligated to report suspicious financial transactions.

As it stands, Australia is just one of five jurisdictions out of more than 200 that do not regulate tranche-two entities, which include lawyers, accountants, trust and company service providers, real estate agents and dealers in precious metals and stones. A failure to reform these industries could result in the nation being ‘grey-listed’ by the Financial Action Task Force.

The budget funds will primarily support the Australian Transaction Reports and Analysis Centre (AUSTRAC) to implement the new regime, including providing education and guidance to newly-regulated entities like real estate businesses to understand their obligations.

A ‘stronger, more streamlined’ approach to foreign investment

The latest financial statement has allocated $15.7 million “to deliver a stronger, more streamlined and more transparent” approach to foreign investment.”

According to the government, the reforms will “help attract the foreign capital flows Australia needs while protecting the national interest in an increasingly complex economic and geostrategic environment.”

While greater scrutiny will be applied to high-risk investments, low-risk investments are set to be processed faster, “to help bring in the capital Australia needs.”

This aspiration will be supported by a new target of processing 50 per cent of foreign investment applications within the 30-day statutory timeframe from 1 January next year.

Small business concessions

Treasurer Chalmers re-iterated the government’s support of “up to four million small businesses to invest and grow”, with the extension of the $20,000 instant asset write-off “to improve cash flow and reduce compliance costs.”

Small businesses with an aggregated annual turnover that is less than $10 million are set to continue to be able to immediately deduct eligible depreciating assets costing less than $20,000, when first used or installed ready for use by 30 June 2025.

Applied on a per asset basis, small businesses can instantly write-off multiple assets.

Mental health and financial counselling supports

A $10.8 million investment over two years will see the continued delivery of “critical” mental health and financial counselling support for small business owners.

The NewAccess for Small Business program will benefit from the continued funding, which provides tailored, free and confidential mental health support.

Funding will also continue for the Small Business Debt Helpline - a free, national, confidential financial counselling service.

Implementation of changes to the Franchising Code of Conduct

Over the next two years, the government will implement its response to the Review of the Franchising Code of Conduct, which will include remaking and enhancing the code, at a cost of $3 million.

A total $2.6 million over four years will be allocated to the expansion of small business’ access to low-cost legal advice as well as alternative dispute resolution services.

Power bill relief

The budget also revealed new power bill relief, both for businesses and residential occupiers, would be on its way.

Aiming to directly ease cost-of-living pressures for households and eligible small businesses, additional energy bill relief would be coming, at a cost to the government of $3.5 billion.

From 1 July 2024, the Government said it will deliver rebates of $300 to every household and $325 to around one million small businesses across the country.

According to Chalmers’ budget papers, extending energy bill relief to all households would “directly reduce headline inflation by around ½ a percentage point in 2024–25 and is not expected to add to broader inflationary pressures.”