Home buyers were potentially among the winners in last month’s the Federal Budget.

Keen to address housing affordability through increasing supply as well as encouraging institutional investment, the government announced a range of measures which included removing tax barriers to residential development projects.

Plus, it confirmed a number of schemes that pre-dated the budget are continuing or have been expanded.

The National Housing Accord

This ambitious agreement between government, institutional investors and the construction sector aims to help tackle the nation’s housing problem by building one million new well-located homes over five years from 2024.

The Budget delivers $350 million in additional Federal funding to deliver 10,000 affordable homes over five years from 2024, on top of existing election commitments. The aim of this funding is to incentivize superannuation funds and other institutional investors to make investments in social and affordable housing by covering the gap between market rents and subsidised rents.

State and territory governments have agreed to build up to 10,000 new homes as well, delivering up to 20,000 new affordable dwellings in total.

The National Housing Accord also covers a range of immediate actions and areas for further work to support a sustainable, long-term pipeline of additional housing supply and help take pressure off affordability including:

• States and territories to expedite zoning, planning and land release for social and affordable housing
• The Commonwealth to provide financing options through the Housing Australia Future Fund to facilitate institutional investment in social and affordable housing
• Working with local governments to deliver planning reforms and free up landholdings
• Institutional investors to leverage investment that delivers for their members’ interests and for the national interest
• Construction sector peak bodies to support high energy efficiency rating construction, the training of more apprentices under an extended Australian Skills Guarantee and work to make housing more responsive to demand.

Visit the National Housing Accord website for more information about this initiative.

In addition, the Treasurer’s Investor Roundtable, a newly established forum, will explore further areas of work to promote investment in housing next month. This Roundtable will bring together leaders from the investment community including from some of Australia’s largest superannuation funds, the major banks and global asset managers.

Helping senior homeowners

As well as increasing the income threshold for the seniors’ health card and the amount pensioners can earn before their pension is reduced, the Federal Government will provide $74m to encourage pensioners to downsize homes. This includes extending the assets test exemption for principal home sale proceeds from 12 months to 24 months.

Existing plans to boost home ownership and affordable housing

The federal budget also confirmed existing policies to boost affordable housing and overall supply, including:

• A ‘Help to Buy’ scheme, allowing up to 40,000 eligible Australians to own a home through the government taking an equity stake in the property;
• The Regional First Home Buyer Guarantee, supporting 10,000 low-deposit home loans for Australians living in the regions for at least 12 months;
• A $10 billion housing Australia Future Fund, to boost social and community housing;
• The Defence Home Ownership Assistance Scheme, with $46.2 million added to the scheme to help defence force members buy their own home.

Read CoreLogic’s detailed analysis of the 2022-23 Federal Budget, the Housing Accord and implications for the residential sector here.

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