• Federal Budget must have a plan for homes and jobs

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    Dawn at Lake Burliy Griffin in Canberra.

    The Real Estate Institute of Australia (REIA) is calling on the Federal Government in election year to tackle the key issue of homes and jobs in its 2022 Federal Budget.

    REIA President Hayden Groves said REIA’s 2022 pre-budget submission contains three simple recommendations to grow Australia’s homes and jobs markets: help first home buyers, unlock supply and create jobs in property.

    First home buyers

    REIA are calling on the Federal Government to expand the First Home Loan Deposit Scheme (FHLDS) to allow more first home buyers to access the deposit guarantee and to expand the First Home Super Save Scheme (FHSSS).

    “We have seen a dramatic reduction of loans to first home buyers with a staggering fall of 21.5 per cent over 2021, reinforcing the need for governments to address both housing supply and affordability for first-time buyers,” Mr Groves said.

    On a national basis, Australian Bureau of Statistics data shows the average loan size grew by $6,000

    “We have also renewed our calls for Budget 2022 to make interest rates tax deductible for first home buyers, even for a prescribed period of the loan, as is the case for property investors,” Mr Groves said.

    As speculation about interest rates continues in the media, REIA have also renewed calls for the 2022 Federal Budget to make interest rates tax deductible for first home buyers, even for a prescribed period of the loan, as is the case for property invesetors.

    “It’s one thing to achieve a deposit, and another to service a loan in an environment as interest rates rise – something we have not seen in Australia for over 10 years – so we need to put in place fair and sensible recommendations to assist Australians coming into the marketplace,” Mr Groves said.

    Unlock supply to help affordability

    “Current market conditions mean that a national plan for housing supply and affordability is badly needed. Politicians cannot talk about affordability without talking about supply.

    “Affordability in Australia is at its worst point since 2008 where 45.8 per cent of family income was required to meet mortgage repayments.

    “At the same time, stock levels or property available for sale in some areas are up to 40 per cent reduced from pre-pandemic levels.”

    The weighted average median house price for the eight capital cities increased to $961,059 during the year to September 2021, while the proportion of income required to meet loan repayments increased to 36.2 per cent nationally.

    “Coinciding with this is a lack of rental supply which has seen vacancy rates hit critically low levels of under one per cent. Rents are increasing and those needing to rent properties are struggling to secure a lease,” Mr Groves said.

    “We need a plan to unlock supply for both buyers and renters that looks at everything from land release planning through to incentivising more rental stock coming online and a national plan to phase out stamp duty.

    “Stamp duty has made selling and buying a home prohibitive which has contributed to a long-term downward trend for listings.”

    Create more jobs in property management

    REIA is also calling for the Federal Government to help unlock jobs in one of Australia’s most talked about industries – real estate.

    “Real estate has been one hugely impacted in terms workforce retention from the COVID-19 pandemic with around 4,500 vacancies needing to be filled Australia wide,” Mr Groves said.

    “Forty per cent of our property management businesses are now facing staff shortages due to lack of skilled candidates.

    “We are seeing agencies have great success recruiting candidates from sectors like tourism, aviation and retail and want to give Australian workers support and confidence to successful transition to a career in real estate from other roles.

    “In Budget 2022, we’d love to see money from reskilling programs dedicated to a Property Manager Mentorship program to help Australians join the real estate sector.

    “Real estate is an important part of Australia’s economy, and we want more Aussies in real estate jobs,” Mr Groves said.

    More information

    For more information, read REIA’s 2022 pre-budget submission