It's safe to say that last week's Federal Budget didn't have many people jumping for joy.

As we've discussed in our sister website, Moving Loop, the government's plan to increase both electricity and gas bills by up to 50% in the next two years met with a "Not happy, Jan - at all," result from the general public.

Both the general public and industry experts across the country weren't particularly impressed by the Budget's real estate plans.

At best, there appears to be a cautionary "We'll see" approach among both groups to the Labor government's ideas.

Let's take a look at the budget 2022-23 and the property market. 

National Housing Accord

This "aspirational target" will see all levels of government, as well as private investors and the construction industry, work together to build one million homes.

The "well-located" homes would be built over five years, starting in 2024 - and significantly, the Accord will include a $350 million Federal commitment to deliver 10,000 affordable dwellings for Australians in need.

Mr Chalmers acknowledged that the residential construction industry was currently facing capacity constraints and would most likely continue to do so in the near future, which would further exacerbate supply and affordability pressures.

But he said state and territory governments would work to expedite zoning, planning, and land releases - including freeing up well-located state land - in a committed plan to improve social and affordable housing in well-located areas.

Housing Australia Future Fund 

Talking affordable housing, the Budget also includes a further 10,000 new social and affordable dwellings to its initial 30,000-home Future Fund plan.

First announced in July 2022 as a pre-election commitment, the Future Fund is part of a major ALP housing reform package.

However, the Budget's extra 10,000 Fund homes add a further $350 million to the initial $10 billion plan.

As with the Accord, it will begin in 2024 and stretch across five years and 4,000 of the new homes will be specifically allocated to women and children impacted by domestic violence, as well as senior women at risk of homelessness.

"The states and territories will build on this commitment by providing in-kind or financial contributions that will enable the delivery of up to 20,000 additional homes in total," the above Budget report stated.

Current, updated housing plans

The Budget has expanded several first-home buyers (FHBs) and similar grants already on the table. 

These include:

• Regional First Home Buyer Guarantee - will give an extra 10,000 eligible FHBs the opportunity to buy a property with only a small deposit, with the government acting as guarantor for up to 15% of their new home's purchase price and eliminating the need to pay Lenders Mortgage Insurance (LMI).
• Defence Home Ownership Assistance Scheme - an additional $46.2 million of government funding will expand this scheme, which
  supports veterans and Australian Defence Force members to purchase a home through monthly subsidies on mortgage
  interest payments.
• Help to Buy - this shared equity scheme will see the federal government fork out $362.4 million over four years to enable 40,000 eligible home buyers to purchase a home with a smaller deposit and mortgage.
• Senior downsizer help, including super - the exemption of home sale proceeds from pension asset testing will be extended by 12 months. The age group of seniors able to make "downsizer" superannuation contributions has also been expanded to 55 to 59 years.
  It is hoped these changes will also encourage more seniors to downsize - and make room for growing families and couples. 

What the Federal Government has to say about the budget 2022-23 and the property market:

Treasurer Jim Chalmers noted that the overall Budget aimed to build a "stronger, more resilient, more modern economy”.

Mr Chalmers also acknowledged that he was very keen to provide responsible, and not reckless, help for Australians suffering from the recent cost-of-living expenses - and this without adding to further inflation.

This is certainly a difficult aim in the face of a FY2023 deficit forecast to be $36.9 billion, which while it is down $41.1 billion on FY2022, still shows little sign of a much-needed turnaround to a surplus in the next five years.

As well, Australian Bureau of Statistics data announced just a day after the Budget that the Consumer Price Index (CPI) has now risen to a much higher than expected 7.3% in the year to the September 2022 quarter.

ABS statistics also revealed the most significant price rises were in housing, which is now up 10.3%.

The government again acknowledged the many issues surrounding property at the moment including the severe lack of rental real estate and rising rents.

"Safe and affordable housing is central to improving productivity and enhancing the wellbeing of Australians (but) currently, too many Australians are unable to access such housing," a Budget report aimed directly at property stated. 

"Our housing challenge needs to be addressed by all levels of government and market participants to ensure Australians have access to safe, stable and affordable housing, close to schools and transport."

What the REIA has to say about the budget 2022-23 and the property market:

Budget benefits:

"The National Accord was a step in the right direction ... and one million new affordable homes are a supply ambition to be applauded," says president Hayden Groves.

"Done right, the Accord could give Australia’s housing stock the generational injection it so badly needs, in the same way that policy programs in the 1970s did.

"The challenge has now been thrown down to get these homes built and Australians housed in a very short period."

Budget downfalls:

"The 2022-23 Federal Budget (will) have no immediate impact on housing and rental affordability.

"Whilst this Budget was appropriate for the current circumstances, both internationally and domestically, the 2023 Budget needs to address how we put some jam on our bread and butter through increased real earnings.

"Far more could be done to address affordability and the devil will be in the detail, and much more detail will be needed."

What CoreLogic has to say about the budget 2022-23 and the property market:

Budget benefits:

"A striking figure in an otherwise modest budget was a target for one million new homes to be built by 2030," says head of residential research, Eliza Owen.

"One million new homes is an ambitious target when considering economic context and will keep construction activity elevated.

"The existing policies are likely to have mixed effectiveness in boosting housing supply ... but ultimately, it is a step in the right direction for easing price pressures in housing longer term."

Budget downfalls:

"There is not much this budget offers to alleviate high rental housing costs (and) we are likely to see a more demand-driven shift in the rental market.

"One of the main critiques of the (Accord) target is that it's not ambitious, given recent completions match this anyway.

"Historic ABS completions on a rolling five-year period shows the decade to 2015 saw average five-year completions at 772,000.

"As interest rates rise, home prices fall and supply-side constraints persist, the delivery of a million homes is not guaranteed and may be more ambitious than what was achieved in the past five years.

"One of the more worrying unknowns in the Accord is just how much of these million homes will be dedicated to affordable housing.

"The Accord encourages ‘institutional investment’ in housing ... and institutional ownership of land and property could be an awkward fit for Australia."

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