The federal budget passed down on Tuesday had very little to say concerning the housing market, an absence that did not pass unnoticed throughout the broking industry.
FBAA managing director Peter White expressed disappointment that the budget didn’t provide for struggling homebuyers, especially given the declining home values evidenced throughout much of the country and the “persistent global uncertainty.”
“The government and all major political parties must examine what they can do to stimulate the housing market, not suppress it – and that includes any change to negative gearing and capital gains tax,” said White.
His comments came just after the Housing Industry Association’s (HIA) most recent data which revealed that approvals for detached houses again declined in February.
“Approvals fell by 3.7% for the month to be 11.1% lower than the same three month period last year,” said HIA’s chief economist Tim Reardon.
“The market cooled in the second half of 2018 on the back of the credit squeeze as dwelling prices corrected, adversely impacting market confidence.”
However, Reardon went on to say, “These results are an encouraging sign that this downturn will remain modest relative to historical comparisons.”
Other players in the industry have expressed cautious optimism concerning how the budget could indirectly assist the struggling housing market.
Tim Lawless of CoreLogic pointed out that state and local governments are “arguably” more able to address housing affordability through measures such as “stamp duty payments, allocation of the first home buyers grant, land release, development charges and town planning."
Additionally, the significant spending on infrastructure – up 25% from last year – could stimulate specific regions and help compensate for the downturn in residential construction.
According to Lawless, the funding is an “investment” towards improving Australia’s cities and will likely benefit the housing market through easing congestion and making the affordable regions of major cities more accessible.
CEO of Mortgage Choice, Susan Mitchell, agreed that while the budget lacked any measures to directly aid the property market, improving infrastructure could have a “positive long-term impact” on affordability.
“With the current softening in property prices this investment may have a positive double whammy effect for working families who can achieve a better work life balance and increase their chances at achieving the Australian dream of owning a house on a quarter acre block,” said Mitchell.