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Rookies in Real Estate: Albanese Budget Misses First-Time Buyers

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The Albanese government's latest housing budget injects billions into housing, aiming to energize the construction of new homes.

However, an important demographic has been left disappointed: first-time home buyers who feel sidelined amidst these changes.

On Tuesday, Treasurer Jim Chalmers emphasized that the government's plan would "supercharge the construction of new homes nationwide," an approach expected to alleviate the tight housing market. Unfortunately, no direct financial aid was announced for first-time buyers struggling against escalating housing costs.

Max Chandler-Mather, the housing spokesman for the Greens, expressed his frustration, highlighting the government’s preferential treatment toward property investors through substantial tax breaks. He labeled the budget a setback for the many Australians renting and trying to enter the housing market.

“Millions of renters and hopeful first-home buyers are in a dire situation, abandoning any hope of homeownership. Meanwhile, Labor has not extended them any relief,” Chandler-Mather communicated to NCA NewsWire. “In stark contrast, around $175 billion in tax benefits will be distributed to property investors over the next four years.”

Recommendations to improve the situation include reigning in the advantages given to property investors and implementing measures to control rent costs, thereby creating a more equitable scenario for potential homebuyers.

One viewpoint explaining Dr. Chalmers' approach comes from Professor Lionel Frost of Monash University. Past incentives for first-time homebuyers, such as grants, have historically increased housing demand, inadvertently inflating property prices further.

“The principal challenge lies in managing rising interest rates, closely tied to reducing inflation,” Frost stated. “It seems the government's strategy is to tackle living expenses directly while steering clear of measures that might trigger higher interest rates and inflation.”

The existing Help to Buy scheme, which aims to help 10,000 Australians annually by cutting up to 40% off mortgage costs, remains mired in Senate discussions. The Greens or the Coalition's endorsement is essential for the scheme’s execution.

Additionally, the budget allocates $6.2 billion to the "Homes for Australia Plan," aiming to produce 1.2 million new homes over five years. A billion dollars is earmarked for infrastructural development to support this surge in housing.

Dr. Chalmers is optimistic about these investments, expecting them to remove infrastructure bottlenecks and subsequently make housing more accessible. “Enhanced infrastructure will facilitate the construction of homes, offering better deals for potential buyers, builders, and renters,” he commented.

Moreover, $1.9 billion will boost Commonwealth Rent Assistance, coupled with another $1.9 billion dedicated to community housing providers to build 40,000 affordable homes.

Beyond financial investments, there’s a human element: the training of 20,000 new tradespeople through fee-free TAFE and pre-apprenticeship programs, aimed at enhancing the housing and construction industry workforce. Housing Minister Julie Collins believes this strategy will expedite house building.

The budget further outlines the inaugural $500 million cut from the $10 billion Housing Australia Future Fund, slated for the 2024-25 period. On the other side, the Greens critique the government for prioritizing a $9.3 billion budget surplus over extensive support for renters and mortgage payers. According to Greens leader Adam Bandt, such funds would be better spent instituting a rent freeze amid an ongoing rental crisis.

Experts caution that while the Greens advocate for rent freezes, such measures could produce unintended negative consequences in the housing market.

The original article titled "First home buyers left behind in Albanese government’s budget" was published by Ellen Ransley on NCA NewsWire.

Published:Saturday, 18th May 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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Equity Release:
A way for homeowners to release cash from the value of their home, either as a lump sum or in installments, while still living in the property.

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