The Real Estate Institute of Australia publicly commented on being dissapointed with the outcome of the Federal Budget saying that the Government had not considered long-term solutions to address the issue of housing affordability in the Federal Budget.
As previously advised in Real News, REIA put forward a pre-budget submission which proposed two recommendations for consideration by the Government; both were aimed at long-term solutions for housing affordability in Australia. The first was to index the grant to median house price movements annually and the second was to allow first home buyers access to voluntary superannuation contributions.
REIA does note and support the changes to the First Home Saver Accounts that will allow money from the accounts to be paid to an
approved mortgage at the end of the minimum qualifying period.
The REIA’s main reason for its two reccomendations were that The indexing of the FHOG would bring the scheme in line with current median house prices while the superannuation proposal would be an adjunct to the First Home Savers Account but would allow flexibility for the saver to decide whether all or part of the voluntary superannuation payments was needed to augment the home purchase.
It is important to note that the median house price has increased by more than $250,000 in less than 10 years and the grant has not maintained relativity.
When the FHOG was introduced in July 2000, the Australian quarterly weighted average median house price was $220,443. The Australian weighted average median house price in the most recent quarter for which data is available, December 2009, was $514,599.
It is important for the Government to realise that the FHOG Boost was a great initiative but we need to look at longer term measures to give first home buyers the opportunity to realise the dream of owning their own home.
The REIA has developed an overview of areas of the Federal Budget that are of interest to the real estate profession. The information summarises that following documents:
- BUDGET STRATEGY AND OUTLOOK (BUDGET PAPER NO.1)
- BUDGET MEASURES (BUDGET PAPER NO.2)
- AUSTRALIA’S FEDERAL RELATIONS (BUDGET PAPER NO.3)
To download the extract, click here.
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