Industry Bodies Welcome Home Ownership Initiatives in 2021 Budget

A real estate advertising board is seen in Canberra, Australia, April 4, 2017. AAP Image/Lukas Coch

The Australian housing and mortgage sectors are commending the federal governments new and expanded measures announced in the Federal Budget on Tuesday to help more Australians become homeowners and, in turn, drive economic recovery.

Property Council of Australia (PCA) chief executive Ken Morrison said in a statement that the PCA commended the federal government for the strong management of Australia’s “remarkable recovery” and welcomed the newly introduced measures.

“The Government has overseen a remarkable economic rebound,“ Morrison said. “These new initiatives build off a year of support and stimulus measures which have enabled the property industry to lead Australia’s recovery from the global pandemic.”

Morrison noted that the new and extended homeowner support measures would also help first home buyers  assemble a deposit for a home loan and “bring the aspiration of homeownership within reach of a broader range of Australians.”

The main housing incentives, which were announced before the budget’s release on Tuesday, included further homeownership support and the extension of the HomeBuilder construction deadline, with the Family Home Guarantee providing 10,000 guarantees for single parents to purchase or build a home with a two percent deposit.

The New Home Guarantee scheme will also be expanded with a further 10,000 places.

“Under the Coalition, homeownership will always be supported,” Treasurer Josh Frydenberg said in the budget speech.

Treasurer Josh Frydenberg and Finance Minister Simon Birmingham with the 2021 budget papers at Parliament House on May 11, 2021, in Canberra, Australia. Dominic Lorrimer - Pool/Getty Images

The Housing Industry Association (HIA) also welcomed the new measure stating that the budget would “make a difference in the lives of thousands of Australians” by creating more opportunities for young people to enter the housing industry.

“Research in 2019 found that 92 percent of renters aspire to own their own home, yet just 49 per cent of renters felt they would achieve home ownership,” HIA Managing Director Graham Wolfe said (pdf). “Both the First Home Loan Deposit Scheme and the New Home Guarantee have proven their value in assisting Australians to buy their first home sooner.”

Meanwhile, the Real Estate Institute of Australia (REIA) said that while many of its priorities were addressed in the 2021 Federal Budget, it had also hoped that interest rates for first home buyers would be tax-deductible and that the deregulation agender would be clearer (pdf).

“REIA welcomes the Budget 2021, which is aimed at helping women and first home buyers and continues to provide taxation benefits for the small business sector,” REIA president Adrian Kelly said. “We will continue to advocate for first home buyers to have the ability to claim interest payments as a tax deduction which will be crucial in the years to come when interest rates start to raise.”

Prime Minister Scott Morrison and Treasurer Josh Frydenberg conducting breakfast television after Treasurer Frydenberg delivered the 2021-22 Budget in the House of Representatives at Parliament House last night in Canberra, Australia, May 12, 2021. AAP Image/Mick Tsikas

The Mortgage and Finance Association of Australia (MFAA) said they welcomed the initiatives and looked forward to working with the National Housing Finance and Investment Corporation (NHFIC) to “help ensure the roll-out reaches the people who really need it.”

“For decades, the challenge for first home buyers has been the accumulation of the sizeable, required deposit,” MFAA CEO Mike Felton said. “The New Home Guarantee addresses this in a practical way.”

“These initiatives will continue to complement the work brokers do to help Australians access credit in a way that is convenient and which maintains strong competition in the Australian mortgage market,” Felton said.

However, despite the overwhelming positivity from the property sector, Mission Australia said that the federal budget did nothing to target homelessness or increase affordable housing for Australians.

“While we acknowledge the Government’s investment in measures to help support people into home ownership, including single parents through the Family Home Guarantee, these do not go far enough to address the structural problems with housing and homelessness in this country,” Mission Australia CEO James Toomey said.