Mortgage and housing sectors react positively to Budget

AMP Capital chief economist Shane Oliver said that this Budget was unlikely to have much impact on the Reserve Bank’s monetary policy deliberations.

“While this Budget could provide a boost to confidence, ongoing fiscal tightening will act as a mild drain on growth in the years ahead,” he said.

“Our view remains that we have probably seen the low for the cash rate but that the risks are skewed to more cuts and a rate hike is a long way off.”

Mortgage Choice chief executive John Flavell said it was too early to tell what impact the Budget will have on buyer and seller activity – although he didn’t sound concerned.

“Auction attendance and clearance rates will come into sharp focus over the coming months to demonstrate stronger indications of consumer confidence,” he said.

“However, with interest rates set to remain at historically low levels throughout 2015, the housing sector remains positive for both current mortgage holders and those looking to enter the property market.”

The federal government revealed in the Budget that foreign investors in residential real estate will have to start paying application fees from December 1.

CBRE head of research Stephen McNabb said the global property group didn’t expect far-reaching consequences for foreign investment as the changes are relatively small and don’t compare unfavourably to measures in other countries.

“In residential markets, most application fees will sit at $5,000 and in our opinion are unlikely to have a detrimental impact on both the level of demand from foreign buyers and foreign developer activity in Australia,” he said.

“In commercial markets, we see a similarly muted impact with the $25,000 cost representing less than three basis points for a $100 million investment.”