With the Treasurer readying to unveil a Federal Budget that’s expected to be heavily focused on the cost of living, the Real Estate Institute of Australia (REIA) has outlined a wishlist of items it hopes to see included.
REIA President Hayden Groves said when it came to real estate items in the Budget, he hoped housing supply initiatives would get a mention in a bid to address the current rental crisis gripping the nation.
Conceding the housing supply issue is one with no singular solution and no magic bullet, Mr Groves said the government would need to tread a careful path to address the problem.
One solution that’s been touted in recent times is build-to-rent incentives, but Mr Groves cautioned any tax settings should consider mum and dad investors.
“Treasury is quite fond of build-to-rent and bringing in large corporations and superannuation funds, and potentially looking at tax settings that act as an incentive,” Mr Groves explained.
“While we think it’s quite useful to introduce these approaches to encourage additional rental supply, we want to make sure there are no favourable tax settings for corporations that aren’t available to mum and dad investors.”
Noting mum and dad investors comprised around 27 per cent of rental property owners, Mr Groves said it was important this cohort was treated equally.
Meanwhile, he reflected build-to-rent was not a magic bullet solution to what is a complex housing supply problem.
“Often build-to-rent only targets the high end, building expensive developments in inner city locations,” he said.
“There also needs to be initiatives that encourage housing supply for the average Aussie battler.”
In terms of other initiatives the Federal Government could take to address the rental crisis, Mr Groves said there was potential for funding to undertake an audit of the nation’s ‘zombie’ housing supply.
Mr Groves explained across the country both local and state governments had government-owned housing which was often left vacant or under-utilised.
“The Federal Government could insist state and local governments audit these assets, looking at zombie housing in particular.
“Whether it’s a task force or funding, this could benefit from funding.”
In terms of other real estate initiatives, Mr Groves said any incentive that could help encourage Australians into their own home would be welcome.
Explaining the Home Guarantee Scheme was a great example of a government policy which addressed this issue, Mr Groves said he had been pleased to see the recently-elected Labor Government continue this initiative.
“It’s a really good policy and has seen zero mortgage delinquency,” he said.
“It’s helped young Australians get into their first homes.
“We’ve been pleased to see the Albanese Government continue to pursue this and any expansion would be welcome, as would any budget additions that help encourage Australians into a property.”
Due to be handed down tomorrow night by Treasurer Jim Chalmers, the upcoming Federal Budget is tipped to be aimed squarely at addressing Australia’s current cost of living crisis.
“We understand even though these pressures come at us from around the world, they are felt most acutely around the kitchen table,” Dr Chalmers told Channel 9 on Sunday.
“So, what we’ll do in the Budget is provide responsible cost of living relief with an economic dividend.”
Among the measures already unveiled is a rise to some pensions and job seeker payments, which are tipped to get their biggest increase in 30 years to keep up with inflation.
In total, spending on social security is expected to rise more than $32.8 billion in the next four years, including increases to Family Assistance.
Couples with a combined income of up to $350,000 will also now be eligible for paid parental leave, which will gradually increase from 18 weeks to 26 and women will no longer be obligated to take leave first.
Dr Chalmers stated the budget would be “solid, sensible and suited to the times”.
“It will more than just batten down the hatches, it will back in families, it will build a better future and I hope it will bring Australians together around some of these big economic challenges that we all confront together.
“I think people understand if you spray cash around indiscriminately in an un-targeted way, you can make the inflation problem worse and can make interest rates go up more than they would otherwise go up,” he said.
“We are very conscious of that.”
The Federal Budget will be handed down at 7.30pm AEDT on 25 October.