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The passing of the federal government’s income tax package means that Australians will have extra income to put towards a deposit for a new home, according to Housing Industry Association (HIA) managing director Graham Wolfe.
Mr Wolfe said the extra income received by millions of Australians is money that they can “put to good use” when it comes to purchasing a new home.
“Home buyers in Sydney are already saving over $5,000 a year in lower mortgage repayments due to the correction in housing prices,” he said.
“Annual mortgage repayments are also around $2,000 lower due to two cuts to interest rates. This tax cut will add further to household income and provide a boost to the new home market.”
According to Mr Wolfe, whether the money goes towards a mortgage or a deposit on a house, it provides Australians with “a real incentive” to start looking at getting their first homes.
“The stimulus that the cuts will provide to the economy will assist in slowing the downturn in the building industry, a contributor to our national economy and to employment Australia-wide,” he added.
This is further backed by first funds made available through the Affordable Housing Bond Aggregator, managed by the National Housing Finance Investment Corporation.
These low-cost funds are expected to “turn the tide” on housing affordability, PowerHousing Australia CEO Nicholas Proud said previously.
“This ensures that Australia continues to supply and manage enough homes for population demand and to put a lid on price rises, and will underpin residential industry jobs, state and federal budgets as new housing supply contracts in 2019,” he said.
The outlook is progress from recent statistics revealed by the Real Estate Institute of Australia (REIA) and Adelaide Bank.
In its March quarter 2019 edition of the Adelaide Bank/REIA Housing Affordability Report, it identified that housing affordability improved marginally across the country during the March quarter of 2019, with the exception of the Northern Territory, but also that the country’s overall rental affordability has fallen at the same time.
The report also stated that New South Wales had the largest improvement in housing affordability, with a 1.3 per cent decrease in home loan repayments.
“The number of those entering the home loan market also declined over the year. Interestingly, while loan size decreased for changeover buyers, it increased marginally for first home buyers,” REIA president Adrian Kelly said previously.
In March, REB reported statistics for the Adelaide Bank/REIA Housing Affordability Report for the December 2018 quarter.
It showed a slight decline in housing affordability nationally, with the proportion of income required to meet loan repayments increasing to 31.2 per cent, up by 0.1 of a percentage point, but a year-on-year improvement of 0.4 of a percentage point when compared to the December quarter of 2017.
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