Budget ignores first home buyers; aids pensioners

Yesterday’s federal Budget announcement has ignored the property and building sectors, according to several industry stakeholders.

According to the president of the Real Estate Institute of Australia (REIA) Peter Bushby, young first home buyers have been left in the dark.

“There’s nothing in this Budget for first home buyers. Numbers of first home buyers have plummeted since the First Home Buyer Boost was abolished,” Mr Bushby said.

“In May of 2009, 31.4 per cent of all purchasers were first home buyers. The figure from March this year is 14.2 per cent, well below the long-term average of 20.2 per cent.”

Michael Davoren, managing director and owner of RE/MAX Australia, said employment rates are letting down the industry.

“Employment is one of the biggest drivers in the property market; this Budget is unlikely in the medium term to bring about a massive increase in employment.”

Housing Industry of Australia (HIA) chief economist Harley Dale agreed that the Budget was disappointing.

“[This] federal Budget has largely ignored Australia’s residential building industry and the opportunity to implement further measures to increase housing supply,” Mr Dale said.

“While the Budget retains the existing [National Rental Affordability Scheme] program and includes a modest measure to assist seniors in downsizing their homes, housing has otherwise been ignored,” he said.

“The boost to infrastructure investment is welcome, however the measures fail to address necessary infrastructure funding to support new residential development and boost new housing supply.”

However, the REIA is pleased to see the government trialling a program to support age pensioners who want to downsize their homes.

“Under the trial program, eligible pensioners who have lived in their own home for at least 25 years and want to downsize will need to put a minimum of 80 per cent of the excess sale proceeds from the sale of their former home into a special account,” said Mr Bushby.

“Those funds will not be counted under the pension income and assets test for up to 10 years or until a withdrawal is made from the account.

“The initiative should lead to better utilisation of existing housing stock. However, it is most unfortunate that stamp duty as an impediment to downsizing has again been ignored,” he added.

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