The October 2022 Federal Budget included some news and updates which may influence property prices.
The October budget presented by Treasurer Jim Chalmers reflected a number of election promises and included initiatives to support families, education, environment and job creation.
While there were no immediate tax breaks or promises of interest rate relief for borrowers, there were some changes and initiatives which could influence the property market.
Here are the details, plus what the latest budget could mean for you as a homeowner.
One million new homes
Perhaps the biggest budget announcement was the building of one million well-located new homes as part of a National Housing Accord which will align the efforts of all levels of government, institutional investors and the construction sector to help tackle the nation’s housing problem.
The new homes have been promised over a five-year period, starting from mid 2024. The Federal Government will provide $350 million over five years to deliver 10,000 affordable dwellings, and state and territory governments will contribute their share as well.
Supporters of this initiative say it will help to solve the lack of supply, which is a big part of the reason why house prices won’t stop rising. After all, you can give first home owners all financial incentives you like but if the homes aren’t there to purchase in the first place, it is difficult for them to get a foot in the door.
The initiative does not resolve short and medium term housing availability issues. If you’re planning to sell over the next couple of years, this is actually a good thing as it indicates prices will hold strong.
Handouts, incentives and homeowner grants
The October Federal budget left handouts and grants unchanged.
For first home buyers and other eligible individuals, grants and incentives include:
Older Australians who want to sell can access the following incentives:
What the budget means for property in Australia
For the short term, it’s unlikely premium homes will see any impact to prices because of the latest budget. This is because initiatives are aimed at the lower end of the market and entry-level buyers.
Even the promise of a million new homes over five years will be slow to make a difference; as Core Logic explained in a recent article, one million new homes were also built between 2017 and 2022 so it’s actually something of a ‘business as usual’ initiative.
This recent budget may give younger homebuyers more flexibility and opportunities to enter the market, which is great news. For those who already own homes or are thinking of selling, it’s a matter of ‘no news is good news’. There were no notable changes to capital gains tax, land tax or negative gearing. This means if you’re planning to sell, you don’t have to adjust your expectations or budget estimates. If you have a quality home in a sought-after area, you should have no trouble creating competition amongst buyers (with the help of your agent of course).
I hope you enjoy the read,
Matt Lancashire