The announcement of the latest federal budget revealed several moves from the government to support property, including assistance for single parents, first home buyers, new home builders, retirees and downsizers, renovators and beneficiaries of public housing.

The REIQ has welcomed these commitments as Queensland continues to rise as a high-performing property market, with prices rising at the fastest monthly rate in over 30 years and interstate migration adding unprecedented pressure on housing stock.

Further, the federal budget will provide much-needed assistance as the nation continues to work towards recovery from “an extraordinary period of challenge and change”, according to REIQ CEO Antonia Mercorella.

However, while the government is ultimately going in the right direction, the CEO believes that more needs to be done as demand continues to outpace supply.

“With property sales in Queensland outpacing new listings, buyers continue to be out in force and ready to purchase property. However, sellers are still yet to match that burgeoning demand,” she said.

“We’ve done remarkably well to maintain relatively stable property market conditions across Queensland throughout this pandemic, but these conditions won’t last if we don’t have more sellers back in the market.”

Ms Mercorella outlined the budgetary amendments that the REIQ is pushing for:

Support downsizing

One way to reignite activity in the market is through downsizing, Ms Mercorella said.

However, figures from the state Treasury showed that there are 50,000 underutilised properties in Queensland every year, mainly due to people ageing in place and high transactional costs.

In fact, the 2016 census has revealed that around 65 per cent of home owners aged 65 to 74 in 2001 were still living in the same home in 2016. Within the 75 and over age bracket, more than half remained in their original residence after 15 years.

“More often than not, retirees are reluctant to sell the family home due to the distorting effects of stamp duty alongside other costs associated with buying and selling,” Ms Mercorella said.

The CEO, therefore, urged the government to improve on their measures for downsizer contributions into superannuation to actually effect meaningful change.

“Policymakers at all levels must work cohesively to seek practical solutions and ensure that regulations are well designed, well targeted and fit for purpose,” she continued.

“By doing so, this would make downsizing a much easier financial decision for older Queenslanders, significantly increasing stock listings and generating much-needed economic activity in the immediacy.”

Extend assistance outside construction

Ms Mercorella also approved of the government’s extension of the federal government’s First Home Super Saver (FHSS) Scheme, as well as the extra 10,000 places added to the First Home Loan Deposit Scheme (FHLDS) to reduce pressure on housing affordability.

However, the CEO lamented the limited scope of the FHLDS beneficiaries.

While eligible first buyers can buy or build a home with just a 5 per cent deposit through the scheme, eligibility remains restricted to new construction.

“By doing so, it fails to recognise the entry barriers for many first home buyers, particularly for young families whom new construction isn’t an affordable or practical option over established housing options,” Ms Mercorella said.

According to data from the Australian Bureau of Statistics (ABS), the cost of new construction has increased by more than 220 per cent in the past two decades (1995 to 2018) while the cost of established housing has only risen by over 113 per cent during the same period,  with annual price inflation ranging from 4.5 per cent in the early 1990s through to 2.5 per cent over the last decade.

With mean gross household income increasing by only 64.7 per cent, Ms Mercorella said that many first home buyers, particularly across regional Queensland, could be facing potential housing affordability issues without other incentives in place.

Increase Family Home Guarantee beneficiaries

Building on the benefits of the FHLDS, the Family Home Guarantee will also support the property market as it allows single parents with dependents who earn up to $125,000 per year to be able to purchase a home with just a 2 per cent deposit, Ms Mercorella highlighted.

However, the assisted access to established housing will be limited to 10,000 places over four years.

“In June 2020, there were 7.2 million families nationally, and of these, 1,024.400 (14.2 per cent) were one-parent families, with 663,400 having dependent children. [The scheme is] guaranteed to have little effect based on 2,500 yearly caps (0.37 [of a percentage point]) — ultimately catering for only 1.5 per cent of the market,” the CEO explained.

“When divided up between the states and territories, it becomes much clearer that these kinds of budgetary measures must go further to have any meaningful impact.”

In its own response to the federal budget release, Labor has hit back with a $10 billion “Housing Australia Future Fund”. 

According to Opposition Leader Anthony Albanese, the annual investment return will build social and affordable housing and create thousands of jobs.