No relief for home owners in 2019 Federal Budget

 

JOSH Frydenberg knows housing affordability is an issue for Australians.

In his Budget speech, the Treasurer said: "Affordable housing is a priority for the government."

But none of the hundreds of pages in his first Budget, promising a strong economy and "benefits" for Australians, reflected that.

Sorry, first home buyers - for the second year in a row, this Budget is not for you.

While entering the property market remains almost out of reach for a generation of Aussies, the 2019-20 Budget appears to ignore the barriers to home ownership facing young Australians.

Deep in the Budget papers, a few promises of funding for affordable housing refer to community and social housing, but there is nothing to help first home buyers save for a deposit or break into the property market.

The government isn’t doing anything specific to make the great Australian dream any more realistic.
The government isn’t doing anything specific to make the great Australian dream any more realistic.

It's the second year in the row the government has overlooked Aussies looking to make the biggest financial investment of their lives.

Handing down his 2018-19 Budget last year, then treasurer Scott Morrison was unapologetic about the omission. When asked what was in the Budget for first home buyers, he told news.com.au they could still benefit from the previous year's announcement.

The main measure for would-be home buyers in the 2017-18 document was the superannuation savings scheme, which allows Aussies to store their savings in their super funds at a reduced tax rate for a house deposit.

Since then, there's been no attempt to provide further relief for struggling property seekers.

The market has made a shift in favour of buyers, meaning things are slightly less dire for those looking to enter the market.

However, where the fall in housing prices is acknowledged in the Budget - which recognises capital city housing prices had fallen by 8.6 per cent from their most recent peak in September 2017 - the market shift is not framed as a good thing.

Where house prices are mentioned in the Budget, it's around warning their impact could have on the state of the economy. The nosediving property market is framed as a domestic risk with dwelling investment - following declines in housing prices - expected to detract from real GDP growth.

According to CoreLogic, dwelling values fell in almost every capital city and region across the country last month.

Melbourne house values fell 1.1 per cent in March, making prices 12.4 per cent lower over the year. Sydney values went down a further 0.9 per cent.

It's predicted house prices would continue to fall and could take a $60,000 tumble by 2020.

Mr Frydenberg said the fall in dwelling investment was a concern for the economy, and warned it was the "worst possible time" to switch to Labor.

Opposition Leader Bill Shorten is proposing changes to negative gearing on newly purchased properties, which he says will benefit first home buyers and level the playing field by stripping investors' tax incentives to acquire more properties.

The drop in house prices, and its effect on the economy, has Treasurer Josh Frydenberg worried. Picture: Rohan Thomson/AAP
The drop in house prices, and its effect on the economy, has Treasurer Josh Frydenberg worried. Picture: Rohan Thomson/AAP

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