Mortgage holders will bear the burden from Federal budget, says REIQ

Contributed By: Jane Garcia on

The REIQ is concerned short-term incentives in the Federal Budget will keep interest rates up for longer, passing the burden to mortgage holders and small businesses.

REIQ COO Dean Milton said while energy rebates may apply a short-term downward pressure on inflation, the median-to-long term impact could be inflationary.

“Instead of the energy bill rebate cash splash to all Australians, our view is that the Federal Government could have shown more restraint and means tested eligibility to ensure it goes to those that need it most,” Mr Milton said.

“We would have liked to have seen a budget which took the pressure off inflation to provide some relief for mortgage holders and small businesses – who could now be carrying the heavy load of high interest rates for longer.”

Mr Milton said the budget provided important short-term, stop-gap support for renters, but that the building blocks for future housing supply were still a long way from getting homes off the ground – and from achieving the 1.2 million new home target.

“The budget contains welcome cost-of-living assistance with increased rental subsidies for the more vulnerable members of our society, helping to take pressure off strained household budgets and keep roofs over heads,” he said.

“However, the supply side initiatives which included commitments to states and territories to deliver long-term infrastructure to support new residential development, are a step in the right direction, but still a marathon away from equating to homes.”

With the Queensland vacancy rate sitting at just 0.9%, he said the budget did not introduce any immediate measures help resolve the shortage of rental properties or support first home buyers find a pathway to home ownership.

“If you were an Australian looking for some glimmers of hope to be able to buy your first home, there are none to be found in this budget,” Mr Milton said.

“With a surplus, this could have been a real opportunity for the Federal Government to start the conversation to reform the tax base for the States away from stamp duty and land tax, which in turn would improve the chances of people being able to buy a home.

“It would have been good to see first home buyer initiatives relating to assisting with the deposit gap and expanding the shared equity scheme beyond the current 10,000 places a year nationally.”

ENDS

Media enquiries:

Claire Ryan, Media and Stakeholder Relations Manager, The Real Estate Institute of Queensland

M: 0417 623 723 E: media@reiq.com.au

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