The Real Estate Institute of Australia (REIA) has filed its pre-budget 2022 submission to the federal government, joining recommendations for an expanded First Home Loan Deposit Scheme (FHLDS) and First Home Super Saver Scheme (FHSSS) as a means to assist first home buyers, unlock supply and create jobs in the property industry.
Speaking of the submission, REIA president Hayden Groves said that there was a “need for governments to address both housing supply and affordability for first-home buyers”.
Mr Groves cited recent CoreLogic data that reported new loans to owner-occupier first home buyers (FHBs) fell year-on-year by 21.5 per cent in 2021, as well as Australian Bureau of Statistics data that stated, between November December, the national average loan increased by $6,000 to $602,000.
“We have also renewed our calls for Budget 2022 to make interest rates tax deductible for first-home buyers, even for a prescribed period of the loan, as is the case for property investors,” Mr Groves said.
“It’s one thing to achieve a deposit, and another to service a loan in an environment as interest rates rise – something we have not seen in Australia for over 10 years – so we need to put in place fair and sensible recommendations to assist Australians coming into the marketplace.”
Mr Groves added that a national plan for housing supply and affordability is also needed, highlighting 2021 REIA data that suggested affordability is at its worst since 2008 and that, over the September quarter, the proportion of income required to meet loan repayments rose to 36.2 per cent.
Data published by Domain late last month stated that the median price for a house in an Australian capital city is now over $1 million.
Mr Groves later said: “We need a plan to unlock supply for both buyers and renters that looks at everything to land release planning through to incentivising more rental stock coming online and a national plan to phase out stamp duty.
“Stamp duty has made selling and buying a home prohibitive which has contributed to a long-term downward trend for listings.”
The REIA president concluded that these recommendations could also address the impact COVID-19 has had on the real estate industry, claiming that there are “around 4,500 vacancies needing to be filled Australia wide” and that 40 per cent of property management businesses are “now facing staff shortages due to a lack of skilled candidates”.
“We are seeing agencies have great success recruiting candidates from sectors like tourism, aviation and retail and want to give Australian workers support and confidence to [successfully] transition to a career in real estate from other roles,” Mr Groves said.
“Real estate is an important part of Australia, and we want more Aussies in real estate jobs.”
REIA’s submission comes as the Housing Industry Association (HIA) too filed its own submission, recommending an extension of the FHLDS as the scheme has “proven to be highly successful”.
In addition to recommending that the government commit to making the FHLDS a permanent program, the HIA also suggested that the 10,000 per annum cap on places in the scheme be removed – or substantially increase the number of places over the budget horizon – and that the transaction timelines accommodated within the New Home Guarantee should apply to any FHB purchasing a new home with a place in the FHLDS.