The Impact of the Federal Budget on the Property Market

So much has happened over the past two years and this year, we have seen major changes in different industries. As for the real estate industry, it’s been a year of big changes. Due to factors including the conflict in Europe and the rising inflation – most especially the federal election, looks like things will continue to be uncertain for so many Australians.

It’s no surprise that there are factors that affect the property market and sellers need to understand the ways it could change the market so conversations pertaining to this very matter is necessary.

As mentioned, one of the factors that could affect the property market has a lot to do with the federal election. With it being nearly upon us, big changes can be expected. The federal budget has been revealed last 29 March 2022, here are some key takeaways that could help sellers and investors understand its impact on the market.

This year’s Federal Budget has announced a few housing schemes. Cost-of-living pressures are making headlines this year, thus, changes in homeownership have been given importance. According to experts, the schemes announced are necessary to possibly fix any issues that surround the affordability of homes, which is one of the major reasons why there are a lot of people facing homelessness.

We have previously talked about the Australian government initiative called the First Home Loan Deposit Scheme, which was created in order to support those who want to build their first home sooner than later. Over the next 3 years, records show that this initiative has doubled, and out of the 50,000 announced places, 10,000 are targeted at regional areas. What does this say? There might be some competition brewing and this time, it’s coming to hot regional markets.

How does the announced budget affect the sellers?

Because these places announced have opened up, sellers might be able to see potential buyers coming into the market which is always a plus. The budget will give more support to regional markets rather than capital cities, thus making regional areas more attractive to buyers because of their lower price points.

Nowadays, so many buyers are choosing to move to regional cities because of the affordability factor. For this reason alone, sellers from these areas will most likely enjoy more buyers. However, many experts still believe that this would not change the situation of the regional markets. Demand is not as hot as before and it’s beginning to slow down because Australians are coming returning to work in major cities where most huge companies are.

Major city markets have always had to deal with issues regarding housing affordability as well as potential interest rate hikes and looks like these issues would still outweigh the budget. Experts are saying that while the budget was meant to target issues regarding cost-of-living pressures, the measures won’t have an impact on the property market.

What do sellers need to consider now?

The First Home Loan Deposit Scheme has been extended and while it is good news for property buyers on low incomes for the first time and due to the rising inflation, interest rates will likely start rising over the year or so. Markets might see some increase in case rate from its current record low percentage by August 2023. Rates that end up reaching 2 percent might make some difference to mortgage repayments.

Price growth is expected to flatten throughout this year and banks may see some fall last year it’s probably a smart move that potential sellers to take advantage of the situation now that the market is still afloat and that borrowing may be easier. Sooner or later, there might be some hesitations due to new factors so now is a pretty good time for that. Speak to a local agent now to understand the market before getting into it.