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Albanese and the Labor Party won the 2022 Federal Election by campaigning on a ticket of addressing the rising cost of living, which included a housing policy that proposed the federal government sharing up to 40 per cent of a property’s purchase price with first homebuyers.
Despite this, the policy is capped at a maximum of 10,000 places – a figure that experts say is not high enough to have a material impact on the market.
“Home ownership is likely to be in focus, but the ALP’s proposed Shared Equity Scheme is set to be capped at 10,000 places per annum, so unless that is changed or there are widespread first homeowner grants rolled out across the country that alone won’t be a market mover,” said BuyersBuyers founder Pete Wargent.
“Housing market demand is more likely to be driven by employment and wage growth. Employment and job vacancies are both at record highs, so there’s a genuine prospect that the unemployment rate can fall towards 3 per cent over the year ahead”.
“The challenge will be whether that can be sustained as interest rates rise, but overall the labour market fundamentals are presently in a very strong shape.”
Tim Lawless, Research Director at property data firm CoreLogic, says while the ALP’s “help to buy” scheme will give some first timers a leg up into the market, it only addresses the symptom of housing affordability.
“Being able to share up to 40 per cent of the purchase price with the government, along with only a small deposit and opportunity to save on lenders mortgage insurance, helps to overcome several of the hurdles of home ownership,” he said.
“Keeping in mind buyers will still have to fund their transactional costs, including stamp duties, legal costs and bank fees.”
Wargent said a Labor government will still have to deal with the fundamental supply and demand variables of the Australian property market.
“There is a looming challenge around housing supply. Nationally, rental vacancy rates have plummeted to around 1 per cent as employment has surged to a record high,” he said.
“Rental vacancy rates in many parts of the country are at levels associated with a rental crisis. Indeed, asking rents for houses have jumped 10 to 20 per cent over the past year, and more in some regional locations.
“It’s not yet clear how the new government will plan to tackle this from a policy perspective. A vacancy tax may be effective but could be considered a radical move for a newly formed government.”
Chief Economist at AMP Capital Shane Oliver said while the government’s proposed policies will help, the benefit on the market as a whole will only be “marginal”.
“The construction of 30,000 social homes combined with the National Housing Supply and Affordability Council if appropriately focused on boosting supply have the potential to help improve housing affordability,” he said.
“The main impact on home prices will likely from come rising interest rates (which would have occurred whoever won the election) which we see driving prices down by 10-15 per cent over the next 18 months and may prove to be a headwind for prices thereafter.”
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