In this week’s 2 minute property investment news video I discuss how the new Federal Budget will affect the housing industry.
The Federal Government’s budget has been criticised by the Real Estate Institute of Australia for not doing enough to help homeowners. The REIA says first homebuyers and the construction sector have been ignored in the Federal Budget. President Peter Bushby says nothing was done to address affordability for first homebuyers, or help them get into the market with a first homeowner grant.
The Housing Industry Association wasn’t too enthusiastic either – it says – more needs to be done to help the housing industry and also housing supply. However, negative gearing wasn’t scrapped and I’m sure a lot of investors are very happy about that. In the budget however, the Federal Government announced a $112 million dollar trial program to support aged pensioners who are keen to downsize their homes.
Under the plan, seniors who’ve lived in their own home for at least 25 years and would like to sell will receive special tax concessions – meaning money from the sale of their house wont be counted under the pension income, provided it’s held in an account for 10 years.
Meanwhile, opposition leader Tony Abbott in his budget reply announced increasing superannuation from nine to 12 per cent will be delayed by two years, potentially meaning investors will end up with less in their self-managed super fund account to purchase an investment property.
But despite the budget… there are signs buyers are being drawn back to the market. The Real Estate Institute of Australia says the latest housing figures show that buyers are coming back to the market… thanks to interest rate cuts and a positive outlook for housing.
The number of owner-occupied finance commitments rose by 0.7 per cent for March – following increases of 0.2 per cent in January and 0.5 per cent in February. In fact, it’s the 10th consecutive monthly increase for housing commitments .. so good news for investors in the market.