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Seven months overdue, the long-awaited federal budget has been delivered, setting out a much-anticipated plan for economic recovery post-COVID-19. So, what might this mean for property?
“This budget is all about jobs,” proclaimed federal Treasurer Josh Frydenberg in the House of Representatives as he unveiled details of the 2020 federal budget.
“Tonight, we embark as a nation on the next stage of the journey.”
“There is no economic recovery without a jobs recovery. There is no budget recovery without a jobs recovery,” he said.
But such stimulus doesn’t come without a cost. The government is forecasting net debt will peak at $966 billion – or 44 per cent of gross domestic product – by 2024.
Calling this debt “a heavy burden”, Mr Frydenberg said it is a necessary one “to responsibly deal with the greatest challenge of our time”.
So, what does the budget have in store for Australia’s property markets?
A number of road, rail and transport upgrades will help boost local economies and job prospects across a number of Australian regions.
The 2020 budget has allocated funds for a number of major projects, including:
Improvement of first home buyer opportunities
A statement from Mr Frydenberg outlined that the additional places would be available from today, 6 October 2020, to support the purchase of a new home or a newly built home.
The First Home Loan Deposit Scheme (FHLDS) allows eligible applicants to purchase a home (within certain price restrictions based on location) with a deposit of just 5 per cent, without paying lender’s mortgage insurance.
Originally, 10,000 places were made available in the FHLDS for the 2020-21 financial year, with all 5,000 non-major lender quota places filled within the first three months of the financial year.
The opening up of new places in the scheme does have a tighter set of requirements than the initial scheme, restricted to the building of a new home or purchase of a newly built home, which was not a requirement of the original scheme.
Mr Frydenberg said the additional guarantees will be available until 30 June 2021 “and will drive more construction and support jobs as part of our economic recovery plan”.
The FHLDS can be used in conjunction with the First Home Super Saver Scheme and HomeBuilder grants, as well as relevant state and territory grants and concessions.
Boost to affordable housing
The federal government has also indicated that it would be extending its guarantee for the National Housing Finance and Investment Corporation by a further $1 billion, which will go towards the construction of more affordable housing.
More to come.
Budget is defined as the estimation of expenses made over a specified time for the purchase of goods or services.