Treasurer Josh Frydenberg’s 2022/23 budget should help constrain runaway inflation, provide the right signal for interest rates, and assist with the challenges of housing affordability.
50,000 new places have been allocated to the First Home Loan Deposit Scheme, which doubles the previous number of opportunities available to first home buyers. This could generate up to $30 billion in sales activity, stimulating the economy and assisting first home buyers to enter the market sooner.
The First Home Loan Deposit Scheme provides a guarantee that first home buyers can purchase a home with a deposit of as little as 5% of the value of the property. More single parents will also be able to become homeowners with a deposit as low as 2%.
The budget also allocates $2 billion to the National Finance Investment Corporation for the supply of social and affordable housing.
Amongst other measures, there will be:
- an immediate cut to the fuel excise, saving Australians on average 22c per litre at the bowser
- a new one‑off $420 cost of living tax offset for more than 10 million low‑and‑middle income earners
- a new one‑off $250 Cost of Living Payment, delivered within weeks to 6 million Australians, including pensioners, carers, veterans, job seekers, eligible self‑funded retirees and concession card holders
Mr Frydenberg also unveiled new incentives for small business, which include:
- A $120 tax deduction for every $100 spent on training employees
- A $120 tax deduction for every $100 dollars small businesses spend on digital technologies, such as cloud computing, e-invoicing, cyber security and web design
- Up to $15,000 in wage subsidies for employers who take on apprentices
Since its inception, more than half of the First Home Loan Deposit Scheme’s guarantees have gone to single buyers, with incomes between $60,000 and $80,000, whereas couples accessing the scheme have had incomes between $90,000 and $125,000.
- More than 58% of buyers have been under 30 years old, one fifth have been essential workers, and more than half are women
- Teachers have been the largest group accessing the scheme
- 62% of buyers purchased in cities and 37% bought in regional areas
- More than half the homes bought in capital cities were within 15 to 30 kilometres of the city
- Couples typically bought further from CBD than singles
- 70% of buyers bought a free-standing house, 25% an apartment and 5% a townhouse
- The median price of houses bought was $385,000 but the apartments median was $475,000 (most of those were in capital cities)
The Labor party recently announced that its housing policy would support first-home buyers in regional areas, if elected. To access support, first home buyers will need to have lived in their region for more than one year. Similar to the Coalition’s policy, Labor’s scheme would allow people to purchase with just a 5% deposit, with the government guaranteeing the other 15%, so there would be no need to pay for mortgage insurance.