2021 Budget: whats in store for real estate?
Here’s a first look at how the real estate sector is set to benefit from Josh Frydenberg and Scott Morrison’s post-pandemic spending statement.
Ahead of the document release, Mr Frydenberg had held a doorstop interview outside Parliament House, where he declared “the Australian economy is recovering well”.
“Over the last 12 months, the Australian economy has outperformed all major advanced economies around the world,” he noted.
“But the job is not done. There is still more to do. Australia is still in the midst of a global pandemic.”
Introducing the budget to the House of Representatives, inside Parliament House, he said “in the face of a once-in-a-century pandemic, the Australian spirit has shone through''.
“We have come so far since the height of the pandemic,” he went on, highlighting previously held fears of 15 percent unemployment and a 20 percent contraction to the national economy.
The reality was very different. Unemployment now sits at 5.6 percent, while the economy contracted by just 2.5 percent.
“Tonight, I outline the Morrison government’s plan to secure Australia’s economic recovery and build for the future,” the Treasurer said
Acknowledging the budget as challenging to prepare, the Treasurer said the budget “is about the Australian people, about guaranteeing their essential services, about creating more jobs and keeping Australians safe from COVID-19”.
With housing now worth more than $8 trillion — or four times the size of Australia’s GDP — it’s no surprise that there are several measures in place to ensure the continued security of Australian property.
On the topic of housing and small business, the Treasurer said “under the Coalition, homeownership will always be supported”.
REB has previously reported on a number of headline homeownership initiatives that would be included in the budget. Those are:
The establishment of a Family Home Guarantee
- To allow single-parent families to purchase a home with a deposit of as little as 2 percent.
Expansion of the New Home Guarantee
- An additional 10,000 places in this 5 percent deposit scheme will be created, to bolster the success from the program’s first year.
An increase to the First Home Super Save Scheme
- This will see the maximum amount of voluntary contributions which can be released under the scheme lifted to $50,000 from the previous $30,000 cap.
More information about each of the above schemes can be found here.
The budget documents also reveal a number of other key measures designed to support Australian property and the real estate sector. These include:
Building Better Regions
Stating that “regional Australia will never be taken for granted”, Mr. Frydenberg revealed $250 million will be allocated to regional community infrastructure projects under the Building Better Regions fund, which Mr. Frydenberg said will create more jobs.
Mr Frydenberg has revealed that Australians over the age of 60 will be able to contribute up to $300,000 into their superannuation if they downsize their home. It’s expected this will free up more housing stock for younger families.
This scheme was previously only available to Australians over the age of 65.
The Treasurer confirmed the government is spending $10 billion over 10 years on a number of infrastructure projects, including:
- $2 billion initial investment for a new Melbourne Intermodal Terminal for the transfer of freight.
- $2.03 billion for Great Western Highway Upgrade (Katoomba to Lithgow) construction of east and west sections in NSW.
- $400 million for Inland Freight Route (Mungindi to Charters Towers) upgrades in Queensland.
- $161.6 million for the Truro Bypass in South Australia.
- $160 million for Agricultural Supply Chain Improvements – “Package 1” in Western Australia.
- $150 million for National Network Highway upgrades (Phase 2) in the Northern Territory.
- $80 million for Bass Highway safety and freight efficiency upgrades in Tasmania.
- $26.5 million for William Hovell Drive duplication in the ACT.
More highlights from the 2021–22 federal budget can be found here.
Keep an eye out for further analyses, commentaries, and insights from REB regarding the 2021–22 federal budget over the coming days.
11th May Grace Ormsby