While expansion of home buyer programs is a good start, more needs to be done, peak body says
In the run-up to the federal election, the Real Estate Institute of Australia is calling on governments to make “big picture” structural changes to increase housing supply and address ongoing affordability issues.
Property listings have continued to plummet despite strong buyer demand and record prices, REIA president Hayden Groves said.
According to SQM Research, there were 218,398 listings across Australia last month, compared to 256,568 in March 2021. Listings for January and February were also down from 2021 numbers.
Groves said homeownership had benefits that extended well beyond the initial buyer – home purchases could help secure wealth for subsequent generations.
“Property has remained a standout investment for homeowners, with values increasing at the highest rate in two decades with a rise of 25.1% in 2021, with the weighted median house price now above $1 million for Australia’s eight capital cities,” he said.
While spiking values were good for homeowners, however, Groves said they were “concerning” for first-home buyers.
He said that the recent expansion of the Home Guarantee Scheme was a good start in helping first-home buyers on to the property ladder.
“Prime Minister Scott Morrison’s announcement that the Home Guarantee Scheme was to be extended with the price caps increases is a great help in easing affordability,” Groves said. “Increasing the price caps for homes available under the scheme means more people have more options when purchasing a home, and the new caps help accommodate larger families under the Family Home Guarantee.”
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Still, REIA said that first-home buyer numbers are plummeting, with new loan commitments to first-home buyer owner-occupiers sinking 8.3% in February.
“This was 36.7% lower compared to a year ago, and continued the decline seen since the recent peak in first-home buyer lending in January 2021,” Groves said.
He said renters were in a similar situation, with vacancy rates under 1% in many areas and the proportion of income required to meet rent payments on the rise.
All of this makes housing affordability and availability key issues in the looming election.
“While it’s a very different market to the pre-election softening in the lead-up to the 2019 federal election, where uncertainty around negative gearing led to a major drop in investor confidence, rising stamp duty taxes continue to be prohibitive for owner-occupiers,” Groves said.