The Real Estate Institute of Australia (REIA) is calling on the federal government to introduce a range of measures to help Australians purchase homes and acquire investment property.
The federal budget for 2021-22 will be handed down on 11 May this year, with bodies already issuing their wish lists for the year ahead.
According to the REIA, the post-pandemic focus “must remain on fuelling the economic engine and restoring not just a COVID-safe but a COVID-stable operating environment for all Australians”.
It added that “property has strong economic credentials”, with the real estate agency sector alone contributing $182 billion to gross domestic product and 133,360 jobs.
As such, it has identified 12 priorities to assist Australia’s property customers (tenants, first home buyers, owner-occupiers and investors) and help agencies succeed in a “COVID-normal Australia”.
Among the measures are several that would assist first home buyers get onto market.
Providing tax-deductible interest rates for first home buyers (FHBs)
The REIA estimates this would provide a benefit of around $4,000 per annum to Australia’s first home buyers (which NHFIC places at around 15 per cent of the housing spectrum).
It highlighted that at least six other OECD nations have a similar incentive, and this would also mean that market entrants not be considered to be at a disadvantage to investors. “This could have an appropriate cap or be time limited,” the group said.
Enabling voluntary super contributions and earnings to be accessed by all first home buyers
Highlighting the 2020 Retirement Income Review’s finding that owning your own home is a critical plank of retirement security, the REIA said that FHBs should be able to access their voluntary super contributions to help contribute to their home deposits.
“Canada, the Netherlands and New Zealand all have programs allowing the use of retirement savings to purchase a home,” it said, adding that there is “potential for the First Home Super Saver Scheme to be expanded significantly”.
Expand the First Home Loan Deposit Scheme (FHLDS) to be a long-term program in the forward estimates
“The FHLDS has been a very successful program supporting new entrants to the housing market. REIA strongly believes that additional places could be created for FHLDS on a long-term basis as the 10,000 per annum releases is an arbitrary number,” it said.
“Additional places should be for established residences as only 10 per cent of first home buyers choose new dwellings.
“This is reflected in NHFIC’s own data for the initial 10,000 places where only 10 per cent chose new dwellings.”
It therefore called on government to provide an “evidenced-based business case and cost-benefit analysis on the benefits of expanding FHLDS places versus supporting lender’s mortgage insurance (LMI) products”.
NHFIC should develop a feasibility study to include transitional lending as part of its mandate
The REIA also suggested that government should consider whether the scope of NHFIC should include “transitional lending to further address first home buyers deposit gaps as has been successful with the Keystart model”.
Other measures put forward by the group include those targeting investors and real estate agents.
REIA president Adrian Kelly said now that the virus has been ‘caught and managed’ in Australia, it was time to start examining key issues fundamental to Australia’s 10-year horizon.
“Housing prices and affordability have been absolute flashpoint issues since the onset of the pandemic. NHFIC reports around 17 key areas of stimulus by state and federal governments to boost home ownership and assist Australians out of rentals.
“As the housing market remains extremely competitive, it is time to increase our efforts,” he said.
“We have seen so much investment into first home buyers, HomeBuilder and social housing with the build-to-rent pipeline up 70 per cent in the past year that we really need to get industry and government of all levels at the table to tackle housing from a bigger picture perspective,” Mr Kelly continued.
“Regionalisation, something Australian home buyers were capitalising on pre-COVID, is still extremely active, and with that we will need more land released, better social infrastructure, and a plan to build more houses to keep up with demand.
“Our cities will need assistance as they re-adjust from lockdowns, and continued support of work-from-home arrangements across the board. As COVID-19 support measures end, having a proper plan will only benefit Australians no matter what their situation is,” Mr Kelly concluded.
[Related: Housing supply to exceed demand in short term: NHFIC]