If you noticed the conspicuous absence of housing affordability in the budget news from both parties, you’re not alone. Many commentators are wondering why didn’t the government, weeks before an election tackle one of the key issues people care about.
Fall in house prices
The government seems content to see affordability improve “organically” with falling prices. However, as domain.com.au points out that while prices in Sydney and Melbourne fell by up to 10%, the prices in these two cities “are still about 40 to 50 per cent higher than in 2012.”
So prices are falling from a high peak – and overall the affordability equation, especially for first home buyers remains unchanged.
As news.com.au states “Sorry, first home buyers — for the second year in a row, this Budget is not for you.” While it’s true last year’s budget had some initiatives including the superannuation savings scheme – overall it was surprising to hear no new federal initiatives aimed at first home buyers.
Affordable housing initiatives
It wasn’t all bad news with a healthy $1.7billion committed to ” funding will go towards supporting state affordable housing services.” – with most of this earmarked for the National Housing and Homelessness Agreement aimed at “outcomes for Australians who are homeless or at risk of homelessness, and need to work together to achieve those outcomes.”
Opportunity for state-level action
The state governments around the country might be more willing and able to help in areas where their federal colleagues can’t or won’t. For example stamp duty payments, allocation of the first home buyers grant, land release, development charges and town planning are all areas they could influence.
It’s unclear if the election will trigger or change policy in this area. Labor’s challenge will be sticking to their election promises of changes to negative gearing and tax incentives related to buying investment properties as well as proving their effectiveness.
Overall with a healthy economy, both parties are focussing on other issues hoping that economic and market conditions continue to change favourably – making this bitter pill a little easier to swallow over time.